CFTC Proposes Swap Definition for Event Contracts, Pairs It With Interim Exclusion
On October 9, 2026, the Commodity Futures Trading Commission published Release No. 9310-26 titled "CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning the Inclusion of Certain Event Contracts in the Definition of Swap" CFTC. The release opens a public comment process on a proposal to bring certain event contracts within the swap definition. The scope is narrow. The mechanism is definitional.
The proposal would expressly further define the term "swap" to include event contracts. The Commission states that event contracts are typically structured as swaps CFTC. Under the proposal, "Prediction market" means a designated contract market or swap execution facility that offers for trading event contracts in the form of swaps. That formulation ties the venue definition directly to the product definition. Only a designated contract market or swap execution facility offering event contracts in swap form falls inside it.
On the same date, the Commission published a second release, No. 9309-26, titled "CFTC Issues Interim Final Rule Excluding Certain Activity from the Definition of Swap" CFTC. The pairing is deliberate in structure. One action proposes inclusion. The other issues an interim exclusion. Each operates on the perimeter of the swap definition, but through different procedural vehicles, notice and comment rulemaking on one side and interim final rulemaking on the other.
The October actions follow earlier steps in the same docket. In March, the CFTC published an Advanced Notice of Proposed Rulemaking relating to prediction markets. On June 10, 2026, Reuters reported that the CFTC had released draft regulations governing the prediction markets industry Reuters. A June 24 analysis from the Congressional Research Service described the 2026 proposed rule as amending Rule 40.11 to codify the CFTC's contract-specific approach to determining whether event contracts are covered CRS.
That contract-specific approach matters for listing. Under the description in the CRS analysis, coverage would turn on review of particular event contracts rather than blanket treatment of the category. The same analysis noted that the CFTC proposed a rule that would have defined "gaming" to include event contracts based on political elections. Rule 40.11 has historically functioned as the gate for prohibited listing categories. Codifying a contract-specific test inside it would formalize how staff and the Commission assess individual filings.
The Commission's educational materials describe prediction markets as offering products designed to help the public forecast, plan for, hedge, and harness perceptions of future events. Event contracts, in that description, can be used to hedge economic risk or speculate on price movements and event outcomes. The dual use is familiar to derivatives practitioners. One participant seeks exposure transfer. Another seeks directional exposure. The instrument is the same.
The broader context here is perimeter control, not product approval. By proposing to define certain event contracts as swaps when traded on a designated contract market or swap execution facility, the Commission would anchor federal jurisdiction over those contracts under the swap framework. Swaps traded on registered venues carry reporting, clearing where applicable, business conduct, and market integrity obligations that do not attach in the same way off-venue. For counsel and compliance, the question will be which contracts meet the definitional prong and which fall within the interim exclusion.
Looking at what this means for market structure, the two-track approach creates an inclusion test and an exclusion boundary to read together. Practitioners will need to map a specific contract against both. Does the payoff reference an event within the proposed inclusion language. Does the underlying activity fall within the interim exclusion. Is the trading venue a designated contract market or swap execution facility offering the contract in swap form. Comments will shape the final text. The definitional language, the scope of any exclusion, and the interaction with Rule 40.11 review are the points where drafting choices will determine listing viability and supervisory reach.
