Prediction Markets in Canada: CIRO and CSA Reinforce the Ground Rules
The Canadian Securities Administrators (“CSA”) and the Canadian Investment Regulatory Organization (“CIRO”) have jointly released a statement reminding industry participants of the existing securities regulatory framework governing prediction markets and event contracts. The April 2, 2026 publication, Prediction Markets: CSA and CIRO remind industry and investors of the current rules (the “Joint Statement”), follows CIRO’s bulletin, Application of CIRO Requirements to Event Contracts (the “CIRO Bulletin”), and reflects growing Canadian regulatory attention to these fast-emerging products.
Prediction markets facilitate trading in event contracts, which are agreements whose payouts depend on the outcome of future events. Where such contracts meet the definition of a security or derivative, normal securities and derivatives rules apply. These include registration or recognition obligations under securities law and prohibitions such as those in Multilateral Instrument 91‑102 – Prohibition of Binary Options, which bars contracts with a maturity of under 30 days when offered to individuals.
The CIRO Bulletin confirmed that event contracts approved for distribution by CIRO‑regulated firms must meet specific conditions:
Products must link only to economic, environmental, or financial indicators.
Each contract must have at least a 30‑day term to maturity.
Prohibitions apply to contracts referencing political outcomes or unlawful activities.
Leverage or margin trading is not permitted.
Currently, two CIRO members, Wealthsimple Investments Inc. and Interactive Brokers Canada Inc., have received CIRO authorization to facilitate Canadian client access to event contracts executed on foreign regulated markets. As outlined in the CIRO Bulletin, these approvals were granted subject to terms and conditions that CIRO noted were developed “in consultation with Canadian Securities Administrators (CSA) members”.
The Joint Statement underscores ongoing regulatory coordination: the CSA and CIRO advised that they will continue to assess market developments involving prediction markets and event contracts and intend to issue further guidance on how securities or derivatives legislation applies to them. Further, the CSA and CIRO will also consider whether other regulatory action is required, including changes to the terms and conditions in the CIRO Bulletin.
Crucially, the Joint Statement also advises that potential industry entrants should contact both their local CSA member and CIRO before offering event contracts to Canadians. At this point, it is impossible to know how, if at all, terms and conditions for member firms may change in the future.
Maintaining open communication with regulators remains advisable for firms entering this space given the pace of regulatory scrutiny in this emerging area.