SEC Clears New Prediction Contracts as Quorum Rule Opens Door to Crypto Decisions

• SEC prediction markets are expanding through new binary contracts, while the Quorum Rule, crypto regulation, prediction markets, and crypto rulemaking remain in focus
• Cboe received SEC approval for KPI-based contracts covering nearly 23 companies, with Robinhood planning to offer them without fees through the end of 2026
• The revised SEC Quorum Rule allows one commissioner to form a quorum when all other commissioners in office are disqualified from a specific matter, potentially reducing delays in regulatory decisions

The crypto rulemaking in the US is rapidly evolving, with new elements entering into the domain each day. The SEC has recently approved a new type of trading that will allow investors to take positions in specific company performance metrics. This decision brings prediction market-style trading further into the US markets, bringing diversification into the trading methods in the existing market. At the same time, a separate change in the SEC quorum rule could make it easier for the agency to continue its regulatory work even when commissioners are unable to participate. These two developments showcase how SEC regulation is evolving, with the agency making changes to trading products and its own decision-making process.

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SEC Prediction Markets Expand To Company Performance Metrics

Cboe Global Markets received US SEC approval to list binary contracts tied to performance indicators for publicly traded companies. In simpler terms, investors will be able to trade on whether these KPIs meet specific thresholds. The initial offering covers nearly 23 companies, with Robinhood expected to take the lead as the first retail brokerage firm to offer this service.

Unlike conventional stock trading, this method of trading will depend on whether a specific business metric meets a set threshold. For example, a contract may ask whether Tesla’s vehicle deliveries will exceed a certain level or whether Nvidia’s data center revenue will cross a set threshold. Each contract will have a binary outcome. A correct prediction will pay $1, while an incorrect one expires as worthless. Robinhood is planning to offer this service free of cost through the end of 2026. These product offerings will compete directly with event-based platforms such as Kalshi and Polymarket, adding another option for traders in this domain.

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SEC Quorum Rule May Impact Crypto Rulemaking

As crypto rulemaking continues to evolve, a new change in the SEC quorum rule is currently gaining attention. The SEC revised its quorum rule effective October 2. This change means that a single commissioner can constitute a quorum for a specific matter if all other commissioners in office are disqualified from considering it.

Earlier, the agency did not allow one commissioner to form a quorum in this situation. This change is intended to help the agency conduct business when other commissioners are unavailable or disqualified from participating in specific matters.

The revised quorum rule could reduce the risk of certain SEC decisions being delayed. Moreover, these two developments show how US financial regulation is changing as regulators and lawmakers continue to debate the best approach to the crypto market.

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