The Commodity Futures Trading Commission today published a Notice of Proposed Rulemaking seeking public comment on amendments to Part 37, Part 38, and Part 39 of the CFTC’s regulations, as well as Commission regulations 1.52 and 1.55.
The Commission has continued to observe growth in the number of affiliations between CFTC-regulated entities — including derivatives clearing organizations, designated contract markets, swap execution facilities, futures commission merchants, and other market participants — such as market makers. In light of these developments, the Commission proposes new rules and amendments to its existing regulations to address issues that may arise in connection with such firms, including with respect to perceived and potential conflicts of interest.
“By setting forth principles-based regulations for vertically integrated market structures, the CFTC is taking a significant step in our continued efforts to support responsible innovation in U.S. derivatives markets,” said Chairman Michael S. Selig. “This proposal would institute purpose-fit rules of the road that bolster market integrity without stifling novel market structures or imposing excessive compliance costs on registrants.”
Comments will be accepted for 60 days following publication in the Federal Register.
Source: CFTC
The CFTC today announced it is seeking public comment for potential rulemaking on vertical integration—something that has become a big deal among prediction markets.
Most notably, the setup sees affiliated trading arms bet against an exchange's own customers.
— Dan Bernstein (@dan_bernstein_) July 30, 2026
The @CFTC just proposed new rules for the relationship between prediction markets and market makers.
A few key pieces after a quick read:
1) Restrictions on the affiliate market maker’s access to the DCM’s non-public info (order flow, positions, upcoming rule changes)
— Jacob Robinson (@JacobRobinsonJD) July 30, 2026
“2) Prohibitions on the affiliate market maker receiving preferential treatment (fee structures, matching priority, access)
3) Separation of personnel, technology and office space between the exchange and the affiliate
Proposed Regulation 38.852(b) is also notable: you can own a market maker on your exchange, but you can’t own a prop trading firm on your exchange.”
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