On September 22, 2026, the Commodity Futures Trading Commission (“CFTC”), through its Division of Market Oversight (“DMO”), issued a staff advisory (the “Staff Advisory”) addressing the listing and trading of event contracts that settle based on whether an individual will say or “mention” certain words, attend or appear at an event, or otherwise interact with another person. These contracts are referred to collectively as “mention markets.” Although the Staff Advisory is informational only and does not create new obligations or supersede existing rules, it signals DMO’s view that mention markets are presumed to be readily susceptible to manipulation.
Most event contracts currently listed on designated contract markets (“DCMs”) settle on externally verifiable outcomes such as economic data releases or election results. By contrast, mention markets turn on the specific conduct of a named person. DMO identifies several features that create heightened manipulation risks, including the relative ease with which the settlement condition can be caused, prevented, or influenced for personal gain; the possession of material nonpublic information by individuals close to the outcome; and settlement based on conduct in informal or private settings lacking independent verification and substantial public scrutiny. DMO identifies four factors as particularly relevant to whether a mention market contract satisfies Core Principle 3 under the Commodity Exchange Act and may be listed on a DCM:
- Independent obligations constraining the controlling individual. Whether the person whose conduct determines settlement is subject to legal, professional, fiduciary, or organizational obligations that meaningfully deter manipulation.
- Susceptibility to external pressure. Whether the outcome can be manipulated through social engineering, inducements, or public pressure campaigns directed at the controlling individual or someone who can influence that person.
- Independent verification and substantial public scrutiny. Whether actions that determine settlement are subject to transparent, independent verification and contemporaneous public scrutiny, including an assessment of the materiality of the relevant words or actions in context.
- Robustness of prophylactic trading rules, surveillance, and controls. Whether the DCM has implemented measures such as restricted lists, position limits, heightened surveillance around event windows, and monitoring for unusual trading patterns that are reasonably designed to detect and deter manipulation and the misappropriation of nonpublic information.
The Staff Advisory does not categorically prohibit mention markets, and DMO acknowledges that, in limited circumstances, a well-designed contract coupled with robust DCM controls may rebut the presumption that mention markets are readily susceptible to manipulation. DCMs are strongly encouraged to engage with DMO staff early in the design process and to provide thorough, well-supported filings with the CFTC that detail the prophylactic measures in place. The Staff Advisory is the latest in a series of CFTC actions shaping the prediction market, as discussed in our prior post from June 2026 regarding proposed rulemaking on event contracts and prediction markets. Read the full Staff Advisory here.