finance
SEC Extends Review Period for 24 Proposed Prediction-Market ETFs
The Securities and Exchange Commission halted the automatic effectiveness of 24 prediction markets ETFs on Tuesday, just before their 75-day window expired. Roundhill Investments, Bitwise and GraniteShares had sought to offer funds tied to elections, economic data and other real-world events. The move comes as Kalshi announced a $1 billion funding round that doubled its valuation to $22 billion.
May 10, 8:22 AM·3m read1 source
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The Securities and Exchange Commission delayed the launch of 24 prediction markets ETFs on Tuesday, citing the need for additional time to study the products before they reach investors. Roundhill Investments, Bitwise and GraniteShares filed with the SEC in February to launch the funds. The 75-day window for the ETFs was due to expire last week.
Under SEC rules, ETFs are automatically effective 75 days after filing unless halted by the agency. The ETFs are tied to prediction markets covering elections, economic data and other real-world events. Prediction markets ETFs are tied to event contracts and place bets on real-world events.
The delay should not be surprising even as the SEC under the Trump administration has sought to ease market access and reduce oversight of novel products, according to ETF experts. A novel private credit ETF that State Street launched last year ran into multiple SEC hurdles post-launch. Spot bitcoin ETFs gained approval only in January 2024 after years of resistance.
Grayscale successfully challenged the SEC in federal court in 2023. Kalshi sued the federal government and won the right to launch contracts on the 2024 presidential election. Questions about insider trading in prediction markets have intensified recently.
The Commodity Futures Trading Commission has primary oversight for prediction markets. U.S. Senate in February that the SEC needs to play an active role regulating prediction markets.
"Prediction markets are exactly one thing where there's overlapping jurisdiction potentially. That is a huge issue we're focused on. ... It's mostly, at least currently, on the CFTC side," Atkins said.
