SEC seeks public input on prediction market ETFs

The SEC is seeking public input on prediction market ETFs, pausing launches as it reviews risks, market impact, and investor protections. Over two dozen proposals are under review.

The U.S. Securities and Exchange Commission (SEC) has opened a public comment period to gather feedback on new types of exchange-traded funds (ETFs), particularly those tied to prediction markets and event contracts. This move, led by SEC Chair Paul Atkins, signals a shift from the agency’s traditionally cautious approach and reflects a growing openness to financial innovation. Currently, the SEC is reviewing over two dozen proposals from issuers such as Bitwise, Roundhill, and GraniteShares. Product launches are on hold as the agency assesses potential risks, market impacts, and investor protection measures. These prediction market ETFs would allow investors to gain exposure to real-world event outcomes—like elections or economic data—through standard brokerage accounts. The SEC is inviting comments from investors, fund sponsors, and the public to help shape its regulatory framework. Key focus areas include product structure, valuation, disclosure requirements, and market integrity. This review comes amid rising interest in prediction markets and aims to ensure a transparent, careful regulatory process before any approvals are granted.