On 13 May 2026, the United States Commodity Futures Trading Commission (“US CFTC”) Division of Market Oversight (“DMO”) and Division of Clearing and Risk (“DCR”) issued CFTC Letter No. 26-14. The no-action letter addresses swap data reporting and recordkeeping for fully collateralized event contracts. It applies to designated contract markets (“DCMs”) and derivatives clearing organizations (“DCOs”). The position covers binary payout contracts and variable payout contracts based on event occurrence or non-occurrence. The letter consolidates eighteen previously issued no-action letters dating back to 2017. Beneficiaries include Kalshi, Polymarket US, Crypto.com Derivatives North America, Bitnomial, Gemini, FMX, ForecastEx, CME, and Railbird, among others. The no-action position remains effective until the US CFTC adopts a final rule on event contract reporting.
Background and Regulatory Context
The US CFTC in the letter states that “since 2016, the Division of Market Oversight (“DMO”) and the Division of Clearing and Risk (“DCR,” and, together with DMO, the “Divisions”) have received numerous requests from designated contract markets (“DCMs”) and derivatives clearing organizations (“DCOs”) seeking no-action positions with respect to swap reporting requirements applicable to fully collateralized binary payout contracts and similar variable payout contracts based on the occurrence or non-occurrence of the events that are the subjects of the contracts.”
The Divisions explain that swap reporting requirements originate from Title VII of the Dodd-Frank Act. The US CFTC consistently throughout the letter notes that “[t]he Dodd-Frank Act was intended to reduce risk, increase transparency and promote market integrity within the financial system by, among other things, creating robust recordkeeping and real-time reporting regimes.”
The letter further clarifies that “whether data related to a particular contract is required to be reported under the SDR reporting regime depends on whether that particular contract is a ‘swap.'”
Scope of the No-Action Relief
The US CFTC in the letter expresses that the Divisions “will not recommend that the Commission initiate an enforcement action against a DCM, a DCO, or their participants for failure to comply with Commission regulations 38.8(b), 38.10, 38.951 (only to the extent that regulation 38.951 requires compliance with Part 45 of the Commission’s regulations), 39.20(b)(2), as well as the applicable provisions of Parts 43 and 45 of the Commission’s regulations.”
The relief applies exclusively to “Covered Contracts.” The US CFTC defines such contracts in the letter as those:
“a. based on the outcome of an underlying occurrence, extent of an occurrence, or contingency; b. listed for trade on a designated contract market; and c. trade as fully collateralized positions, as defined by Commission regulation 39.2.”
Concerns Addressed by the US CFTC for Consolidated Position
The US CFTC consistently throughout the letter identifies three principal concerns prompting the consolidated approach.
First, the letter notes that “certain DCM and DCO rulebook changes may require the beneficiary of an Event Contract Reporting No-Action Letter to submit an additional request to modify or supplement that no-action letter.”
Second, the US CFTC observes that “addressing swap reporting for event contracts on an ad hoc basis leaves open opportunities for inconsistent no-action positions to be granted to similarly situated firms.”
Third, the letter highlights that “absent a no-action position with respect to swap reporting, DCMs listing binary options may be subject to duplicative reporting requirements under regulation 16.02, which applies to options listed on a reporting market, and Part 45, which applies generally to swap transactions.”
Conditions Attached to the No-Action Position
The US CFTC in the letter sets out conditions which beneficiaries may consider integrating into their compliance frameworks. The letter states:
- “Beneficiary Designated Contract Market (‘Beneficiary DCM’) will clear all Covered Contracts through a Beneficiary Derivatives Clearing Organization (‘Beneficiary DCO’).”
- “Beneficiary DCM will publish on its website the following information for all Covered Contracts transactions promptly after execution thereof: trade timestamp, contract, quantity, and price.”
- “Beneficiary DCM will provide the Commission with all transactional information for Covered Contracts as described in Commission regulation 16.02.”
The letter additionally requires that “Beneficiary DCM and any Beneficiary DCO will comply with all reporting and recordkeeping requirements of the CEA and CFTC regulations applicable to them in their respective capacities as a DCM and a DCO.”
The US CFTC further imposes the compliance and recordkeeping and suggests that Records must remain “open to inspection upon request by any representative of the Commission, the United States Department of Justice, or the Securities and Exchange Commission, or by any representative of a prudential regulator as authorized by the US CFTC.”
Treatment of Event Contracts as Options and Swaps
The US CFTC consistently throughout the letter acknowledges the hybrid nature of event contracts. The letter explains that “event contracts are generally understood to be a type of derivative contract, typically with a binary payoff structure, based on the outcome of an underlying occurrence or event.”
The letter further clarifies that “[e]vent contracts can be structured as swaps, futures, and/or options, depending on the structure and terms of the contract, including the underlying event.”
The US CFTC also observes that “[m]any, although not all, event contracts that have traded or are currently trading on Commission-registered exchanges are structured as binary options, which are generally understood as a type of option for which the payout is either a fixed amount or zero.”
Beneficiaries Listed in the Appendix
The appendix to the letter enumerates nineteen entities currently benefiting from the no-action position. These include Aristotle Exchange DCM and DCO, Bitnomial Exchange and Clearinghouse, Chicago Mercantile Exchange, C.X. Clearinghouse (formerly Cantor Clearinghouse), Electron Exchange DCM and DCO, FMX Futures Exchange (formerly Cantor Futures Exchange), ForecastEx, Gemini Olympus, Gemini Titan, KalshiEX, Kalshi Klear, North American Derivatives Exchange (d/b/a Crypto.com Derivatives North America), QC Clearing (d/b/a Polymarket Clearing), QCX (d/b/a Polymarket US), Railbird Exchange, and Rothera Exchange and Clearing (formerly LedgerX).
The US CFTC in the letter expresses that “[e]ntities intending to list contracts that have the characteristics of Covered Contracts may request a no-action position identical to the no-action position set out in this letter.” Upon grant, the Divisions “will publish an updated Appendix reflecting additional beneficiaries.”
Duration and Limitations of the Relief
The US CFTC consistently throughout the letter underscores the conditional nature of the relief. The letter states that “[t]he no-action position set out in this letter will be effective until a final rule is adopted by the Commission addressing this matter.”
The letter further clarifies that “[t]his letter expresses a staff position only with respect to enforcement of the Relevant Regulations. This letter does not state any legal conclusion regarding the characteristics or legality of any Covered Contract or the conduct of any person covered by the no-action position.”
The Divisions also note that “[t]his letter and the no-action position taken herein represent the views of the Divisions only, and do not necessarily represent the positions or views of the Commission or of any other Commission division or office.”
Practical Considerations for Market Participants
Crypto-native exchanges, prediction market platforms, and DCO operators may consider undertaking a focused review of their reporting workflows in light of the consolidated position. Entities currently outside the appendix can enhance regulatory certainty by submitting a request mirroring the conditions specified in the letter.
Firms can also consider strengthening their website disclosure protocols to ensure prompt publication of trade timestamp, contract identifier, quantity, and price data. Compliance teams may benefit from aligning recordkeeping systems with regulation 16.02 transactional reporting standards.
DCMs and DCOs operating across multiple jurisdictions can consider mapping the US CFTC conditions against parallel reporting obligations in other regimes. This approach assists in identifying overlapping obligations and reducing duplicative compliance burdens.
The US CFTC in the letter signals that broader rulemaking may follow. Market participants may consider monitoring forthcoming Commission proposals and engaging through the public comment process when opportunities arise.
Conclusion
CFTC Letter No. 26-14 marks a consolidation of nearly a decade of staff no-action positions on event contract reporting in the United States. The letter offers a uniform framework for DCMs and DCOs offering fully collateralized binary and variable payout contracts. The position remains a staff view and does not bind the Commission. Crypto-focused exchanges, prediction market operators, and clearinghouses can consider this development as an opportunity to recalibrate reporting and recordkeeping practices. The forthcoming Commission rulemaking on event contract reporting warrants close attention by all stakeholders in the derivatives ecosystem.
(Source: https://www.cftc.gov/PressRoom/PressReleases/9131-26, https://www.cftc.gov/csl/26-14/download)
