SEC and CFTC jointly propose rulemaking framework for event contracts
The U.S. Securities and Exchange Commission (SEC) published a notice of proposed rulemaking on event contracts on August 21, according to Troutman Pepper Locke's weekly consumer financial services newsletter. The SEC issued the notice jointly with the Commodity Futures Commission (CFTC), which also solicited public comment. At least one industry respondent urged the commissions to reject any broad reading of swap definitions that would encompass event contracts. Better Markets flagged the request. Available details on the proposal's scope and comment deadline remain limited.
The joint SEC-CFTC rulemaking puts event-contract classification on the table for both agencies simultaneously. Platforms like Kalshi and Polymarket now face dual-track uncertainty: the CFTC could tighten derivatives definitions while the SEC tests whether event contracts qualify as securities. Any overlap would force operators to navigate two registration regimes instead of one.
The comment process gives industry a formal channel, but the agencies' parallel review signals neither wants to cede jurisdiction. For traders, the stakes are contract validity: a security designation would subject event markets to SEC disclosure and exchange rules that the CFTC derivatives framework does not require. The first draft rules, still unseen, will reveal which agency is driving the definitional boundaries.