Speaking in opening remarks at the FIA Global Cleared Markets Conference in Boca Raton on Monday, Walt Lukken (pictured) said event-based contracts have demonstrated strong demand but require guidance on their regulatory treatment.

“The reason this product has taken off is simple: it’s easy to understand, incredibly accessible, and the information ‘discovered’ by these markets has proven pinpoint accurate,” Lukken said. “These markets have truly shown the ‘wisdom of crowds.’”

Prediction markets allow participants to trade contracts linked to the outcome of real world events, from elections to economic data releases. Their growth has raised questions for regulators about how such contracts should be supervised.

Lukken said he welcomed plans by the Commodity Futures Trading Commission to clarify the regulatory boundaries for event contracts.

“I’m encouraged that CFTC Chair Selig has pledged to launch a rulemaking process to establish clarity on the regulatory boundaries of these markets,” he said. “There are many unique aspects of prediction markets that need guidance, like the strain these markets place on the self-certification process and the need to address head-on concerns around insider trading.”

While calling for clearer rules, Lukken also praised operators that have begun to strengthen oversight.

“I applaud those prediction markets that have begun to exercise strong surveillance and enforcement actions around insider trading,” he said.

Responsible innovation

The FIA chief also highlighted the industry’s ongoing debate over 24/7 trading. The FIA last week published a paper examining operational and risk management challenges associated with 24/7 markets.

“Aligning clearing with trading as the markets move to 24/7 will ensure extended trading hours won’t increase customer or market risk,” he said.

Lukken also warned that the derivatives industry must continue to anchor innovation in core principles of trust, fairness and integrity as new products emerge.

“At a time when finance is innovating at breakneck speed, it’s hard to keep pace,” Lukken said. “It is exactly at these times that trust, fairness and integrity should lead us.”

Those principles should guide the development of emerging market structures including digital assets and new clearing models, he added.

“Our playbook should start by enacting a sound regulatory framework for digital assets. This will instil trust, promote competition, and offer consumers innovative products for decades to come.” Lukken said.

The trade body recently announced six winners of its 2026 President's Award, which recognise individuals for their contributions to the global cleared derivatives industry over the past year.