SEC Delays Prediction Market ETF Review for Public Comment

The U.S. Securities and Exchange Commission is delaying a series of proposed exchange-traded funds tied to prediction markets, seeking public input on how to regulate the novel products. SEC Chair Paul Atkins announced the move Wednesday, stating that novel products raise novel questions and that the agency will solicit feedback before making decisions.

The delay affects applications from several asset managers, including Bitwise Asset Management, Roundhill Investments, and GraniteShares, which filed for prediction market ETFs in February. These proposed funds, some branded as PredictionShares, are designed to track binary outcomes tied to events such as U.S. elections, economic recessions, and corporate layoffs. The filings were nearing the end of a standard 75-day review window.

Prediction markets, where participants trade contracts based on the likelihood of future events, have grown rapidly, with industry platforms now regularly clearing more than $15 billion in monthly trading volume across sports, politics, and other events. An ETF structure would allow traditional investors to gain exposure to these event contracts through standard brokerage accounts, a path compared to...