Unregistered Political Events Contract Market Approved
On October 29th, the Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight provided no-action relief to Victoria University of Wellington, New Zealand (the “University”) to operate a not-for-profit market for event contracts, and to offer event contracts to U.S. persons, without registration as a designated contract market, foreign board of trade, or swap execution facility, and without registration of its operators. The University’s proposed market for event contracts is similar to the Iowa Electronic Markets (“IEM”). Like the IEM, Victoria University of Wellington’s proposed market for event contracts consists of submarkets for binary contracts concerning political elections and economic indicators, is operated for academic research purposes only, and its operators, who are faculty at the University, receive no separate compensation. The University’s main objective for its event contracts market is to determine whether it can aggregate information and predict outcomes of certain events more accurately than through alternative means, such as public opinion polling. CFTC Press Release.