Most of what has been written about prediction markets in 2026 concerns whether they may operate and which government answers that question. A quieter document settles something else: how much of what happens inside these markets anyone outside them will ever see. It carries no injunction and no penalty, and it may be the most consequential thing published about this category in July 2026.
A rule about data arrived in its own docket with thirty days on the clock
On 1 July 2026 the Commodity Futures Trading Commission published Data Reporting Requirements for Certain Event Contracts, RIN 3038-AF73, at 91 FR 40102. It is a notice of proposed rulemaking that would amend parts 15, 16 and 17 of the Commission's regulations. Comments were due on 31 July 2026, a thirty day window.
Its summary states what it would do: require certain reporting markets, futures commission merchants, clearing members and foreign brokers to report fully collateralized event contracts under the futures and options regime in parts 15 through 18, instead of the swap reporting rules in parts 38, 39, 43 and 45. That matters because, as the Commission explains in the same document, event contracts are generally swaps under sections 1a(47)(A)(i) and (ii) of the Commodity Exchange Act, which ordinarily sends their data to swap data repositories.
Thirty days is short by the standards of this year's rulemaking. The Commission's advance notice of proposed rulemaking on prediction markets, published on 16 March 2026, ran for forty five days and sat in a different docket. We wrote about what came back out of that comment record in August 2026. Anyone watching the docket they filed into in April had a month to notice this one.
As of 20 September 2026, the Federal Register's index for RIN 3038-AF73 lists exactly one document: the proposal. No final rule has been published, and proposed section 16.03 does not exist in the Code of Federal Regulations.
Twenty five contracts is the default and the proposal asks for one hundred and twenty five thousand
Large trader reporting works off thresholds. Under Commission regulation 15.03, most contracts fall to a default reporting level of 25 contracts, and an account at or above that level becomes a special account whose positions and owners get reported to the Commission. A second threshold in regulation 15.04, set at 50 contracts of daily volume, triggers ownership and control reporting on trading activity rather than on holdings.
The proposal would create a category, Covered Event Contracts (1 USD), and set both thresholds for it at 125,000 contracts, or the notional equivalent where the contract size is not one dollar. A 100 USD contract would carry a level of 1,250. The Commission's stated reason is proportion: these contracts commonly pay a maximum of one dollar, so a 50 contract volume threshold would demand a Form 102B for every account that traded fifty dollars in a day. The Commission writes that collecting ownership and control information at that size is unlikely to improve surveillance and would risk "overwhelming the Commission with less useful data".
That reasoning is sound, and we do not think a regulator should be collecting the identity of everyone who spends fifty dollars. What deserves attention is the second half of the same decision, which the Commission also wrote down.
The Commission published the number its own threshold would miss
The Commission normally calibrates reporting levels so that reported positions cover roughly 70 to 90 percent of a contract's open interest. In this proposal it says that goal is impractical for event contracts, because a level that captured that share of open interest would sweep in ordinary retail traders.
The cost benefit section then quantifies the gap. In a table covering four designated contract markets on 8 February 2026, the number of participants above either the position or the volume threshold falls from 1,184,165 at a level of 25 contracts, to 1,362 at 50,000, to 402 at the proposed 125,000, to 197 at 250,000. The Commission states that the proposed level could produce a 97 to 99 percent reduction in the number of potentially reportable special accounts.
It also publishes the coverage that remains. On that same February date, the 125,000 position threshold would cover approximately 14 percent of the long side and 72 percent of the short side of the fifty largest covered event contract markets at the largest exchange, ranked by open interest. At a 50,000 level the figures would be 22 and 81 percent. And for thinner markets the proposal is explicit: the Commission "would expect to receive no large trader reporting". The full text of all of this is in the government printing office copy of the proposal.
None of that is concealed and none of it is scandalous. A regulator is allowed to decide that a surveillance tool built for grain traders is the wrong instrument for one dollar contracts held by a million retail accounts. The consequence is worth saying plainly: under this proposal, for most listed event contracts, nobody outside the exchange would hold a position level record of who is on either side.
What leaves the routine view does not leave the market
The positions do not become smaller and the concentration does not become less real. A participant can sit below 125,000 contracts in each of forty markets and still be the reason a price moves. What changes is where the only complete record of that lives.
This part belongs to us rather than to the Commission. Directive 02 of our manifest commits signatories to stating conflicts, settlement sources and costs "in plain language on the surface where the trade happens". A regime that routes almost all position data into the exchange's own files does not breach that commitment. It does make the commitment the only thing standing between the public and a blank space.
The exchange would have to hold a name, an employer and a ten percent interest
The proposal is not a net loosening, and reading it as one would be wrong. Proposed section 16.03(g) would require a designated contract market listing these contracts to obtain, for all customers, data identifying each trader by name, physical address, email address, phone number, occupation and employer, plus the names of anyone who guarantees the account or holds a financial interest of 10 percent or more in the trader or the account. The exchange would have to keep it for the life of the contract and for at least five years after it terminates.
That is new. Regulation 16.02 obliges an exchange to hand over data identifying each trader only "if the [DCM] maintains such data", and the Commission explains that it declined to require collection in 2009 because exchanges did not routinely gather it and everything was funnelled through clearing members who did. Event contract exchanges are often not intermediated at all, so that assumption no longer holds. The Commission states the purpose directly: trader identifying information is necessary to detect insider trading and to prevent wash trading, and to run surveillance across venues, noting that at least three exchanges have self certified contracts settling on United States gross domestic product growth as reported by the Bureau of Economic Analysis.
So the same document narrows what the regulator routinely receives and widens what the exchange must hold. The obligation does not vanish. It moves one building over.
Four fields on a website is the whole of the public side
The public facing piece is proposed section 16.03(f). It would require an exchange to publish, for each covered event contract, the execution timestamp, contract ticker symbol, trade quantity and price, as soon as technologically practicable after execution, and to keep that transaction data available on its website for at least one year. Timestamps would follow the format used for swap data in appendix A to part 43, which is UTC in the form YYYY-MM-DDThh:mm:ssZ.
Four fields is not nothing, and the one year retention and common timestamp format are genuine improvements on a condition attached to a letter. But it is close to what exchanges already do. The staff no action letter issued to Kalshi on 22 April 2021, CFTC Letter No. 21-11, was conditioned on publishing trade timestamp, contract, quantity and price promptly after execution. The public side is being codified, not expanded.
Most of what a reader needs to judge a market sits outside those four fields: open interest over time, concentration on each side, how much volume came from accounts that also make the market, how often a contract resolved late. We argued in August 2026, when volume set a record while open interest fell, that volume alone says almost nothing about whether a market is healthy. This proposal does not require the missing numbers, and it does not forbid anyone from publishing them.
Sixteen staff letters are carrying the part nobody argues about
Here is the situation the proposal is trying to end. Before 2010, binary payout event contracts were reported as options under the futures and options regime. HedgeStreet, the first exchange dedicated to them, traded under reporting levels the Commission set in its 2006 market and large trader reporting rule at 71 FR 37809. Dodd-Frank then built the swap reporting regime around these contracts, and the fit was poor.
What has held the gap together since is staff discretion. The Commission states in the proposal that its Division of Market Oversight and Division of Clearing and Risk have issued 16 no action letters on this question, the earliest from 2017. In May 2026 the divisions added CFTC Letter No. 26-14, which streamlines the granting of further no action positions and is written to run until the Commission adopts a final rule.
Staff no action letters are useful and they are not law. Each says so on its face. They bind no future Commission, they can be withdrawn, and the proposal says staff would be directed to pull all sixteen on the compliance date of a final rule.
A seventeenth letter landed in September and it expires when the rule lands
On 2 September 2026 the CFTC announced in release 9293-26 that the Division of Market Oversight had issued a no action letter to Electron Exchange DCM, LLC, allowing the exchange to submit large trader reporting on behalf of its direct participants as if its contracts were exclusively self cleared. The letter itself, CFTC Letter No. 26-24, signed by Acting Director DJ Hennes, explains the trigger: an amended order of designation dated 10 August 2026 permitted intermediation, which would otherwise have pushed the reporting duty onto retail participants themselves.
The conditions are specific: the exchange reports under regulation 16.00 for clearing members carrying non direct participants, reports under regulations 17.00 and 17.01 on behalf of its direct participants, and collects what it needs to do so, while those participants stay responsible for part 18. The letter then states that it expires on the compliance date of any final Commission action on the matter, that it represents the views of the Division only, and that it is "not binding on the Commission or other Commission staff".
Read against the proposal, that is the whole problem in one page. The reporting architecture for an entire product class is being assembled case by case, in letters that expire when an unfinished rule arrives.
The document sets two different implementation dates for the same two provisions
One drafting detail is worth flagging, because it survived into the published text. In section II.C the Commission proposes that the implementation date for sections 16.03(b)(1) and 16.03(c) be the later of six months after a final rule is published or 26 July 2027. In section III, headed Compliance Date, the same two provisions are given the later of sixty days after publication or 26 July 2027. Both passages are in the published text.
The July 2027 date comes from elsewhere: the Commission's 2024 large trader reporting amendments carried a compliance date of 3 June 2026, and CFTC Letter No. 26-02, announced on 27 January 2026 in release 9174-26, pushed enforcement of them back to 26 July 2027. Because that floor is likely to be the later prong either way, the difference may never decide anything. It is still a discrepancy in a document whose comment window closed on 31 July 2026, and a reminder that these texts repay being read to the end rather than summarised from a press release.
Where the comment record already asked for more
Footnote 123 of the proposal records what people asked for at the earlier stage: reporting designed to identify insider trading and fraud, scaled position thresholds, mandatory reporting by participants running AI driven strategies, and a regulator assigned per contract identifier along the lines of CUSIP, LEI or UPI. The Commission's answer is one sentence: those requests are otherwise outside the scope of the proposal.
The proposal does leave two doors open in its numbered questions. Question 8 asks whether reporting levels should vary by sub category, naming weather, government statistics and economic indicators. Question 12 asks what additional trader identifying information exchanges should collect. Both invite a more specific record, not a thinner one.
What a market can publish on 20 September 2026 without waiting for anyone
The scale is not small. The Commission notes that twelve exchanges either offer or intend to offer these contracts, that seven new designated contract markets were designated from the start of 2025, that more than twenty applications were pending as of 22 May 2026, and that at one of the largest exchanges in February 2026 an average of roughly 91,000 event contracts a day had trading volume. A category growing at that rate is deciding, this year, what its permanent public record looks like.
An exchange that wants to be measurable does not need a final rule to publish aggregate open interest per contract over time, the share of volume and of open interest held by its five largest accounts on each side, its own affiliated participation, resolution timing against the published rules, and the same time and sales history in a machine readable form kept for longer than twelve months. None of that identifies a trader, and none of it waits on the Commission. We have argued before that a category that counts arrivals and not what happens next is choosing not to know itself.
The honest position is that RIN 3038-AF73 is a reasonable rule. Its thresholds are defensible, its trader identification requirement is a real improvement, and the Commission did the unusual thing of publishing the cost of its own choice. The gap it leaves is not a failure. It is a space the rule declines to fill, and the only people who can fill it are the ones running the markets. That is the argument behind the commitment we ask operators to sign: publish the numbers that make you measurable before somebody writes a worse rule requiring worse ones.