The Commodity Futures Trading Commission (CFTC) recently withdrew a proposed rulemaking and an advisory for certain markets.
“Today’s actions reflect the CFTC’s commitment to lawful innovation in our markets,” CFTC Chairman Michael Selig said. “The 2024 event contracts proposal reflected the prior administration’s frolic into merit regulation with an outright prohibition on political contracts ahead of the 2024 presidential election. The commission is withdrawing that proposal and will advance a new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act that promotes responsible innovation in our derivatives markets in line with Congressional intent.”
In June 2024, the CFTC published a notice of proposed rulemaking titled “Event Contracts” that specified the types of event contracts that fall within the scope of Commodity Exchange Act section 5c(c)(5)(C) and are contrary to the public interest. The proposal was withdrawn because the CFTC does not intend to issue a final rule.
In September, the CFTC issued a staff advisory on certain contract markets regarding preparations for a potential market disruption during a lapse in government appropriations.
“While intended to highlight litigation considerations, the advisory inadvertently created confusion and uncertainty for our market participants” Selig said. “I look forward to working with staff on an event contracts rulemaking.”