CIRO expressly bans sports, entertainment event contracts for investment dealers
Canada's investment industry regulator has rewritten its event-contract conditions to outlaw contracts tied to sports and entertainment outcomes, and to stop dealers from advertising or displaying any contract they cannot offer. The changes codify a position regulators staked out in joint guidance this summer.
The Canadian Investment Regulatory Organization on October 16, 2026, updated its terms and conditions for event contracts offered, traded or facilitated by Investment Dealer Members, expressly prohibiting contracts tied to sports or entertainment events or their outcomes and barring members from displaying or promoting any contract they are not permitted to offer.
The changes, set out in Administrative Bulletin 26-0215, also refine the categories of event contracts members may offer and clarify what qualifies as an event contract, including requirements for the indicators used to determine outcomes.
CIRO said the sports and entertainment prohibition enumerates as banned a category of contracts its staff had previously deemed inappropriate to facilitate or approve.
Promotion of non-permitted contracts barred
Under a new condition, members may not advertise, display, market, promote, rank, recommend or otherwise present to clients any event contract they are not allowed to offer, trade or facilitate, whether directly or indirectly.
The prohibition extends to every client-facing platform, application, communication and tool, covering features such as scanners, watchlists, alerts and recommendation functions.
CIRO expects members to implement controls so non-permitted contracts are not presented to clients, whether directly through client-facing systems and tools or by way of links to third-party sites.
Members cannot comply by disabling trading functionality while still making the contracts visible, CIRO said: where a contract cannot be offered, traded or facilitated, it cannot be displayed through features meant to encourage product awareness, client engagement or trading activity.
CIRO and the Canadian Securities Administrators said displaying or promoting contracts that members are not permitted to offer may create confusion about which products have been authorized for Canadian clients and may weaken the public-interest rationale behind the conditions, even where the member is not making the contract available for trading.
Definition of event contract and permitted indicators
The updated terms add a definition under which event contracts include any product commonly called a prediction contract, forecast contract, event contract or prediction market contract.
The change applies the requirements based on a product’s substance and characteristics, whatever the marketplace, issuer, intermediary or service provider involved calls it.
For each permitted category, the indicator that determines the outcome must satisfy the requirements set out for that category in the appendix, and the categories cover contracts built on objectively measurable indicators rather than every contract with an economic, environmental or financial connection.
A contract tied to the published unemployment rate qualifies as an economic indicators contract, CIRO said, while a contract on whether one specific employer will terminate employees is not.
A contract on a securities index’s published value is a financial indicators contract; one tied to whether a company announces an IPO or acquisition is not.
A contract on measured rainfall qualifies as an environmental indicators contract, while one tied to a government’s announcement of an environmental policy does not.
Authorization and the earlier framework
The terms and conditions do not by themselves authorize a member to offer event contracts; before launching an event contracts business line, a member must give CIRO written notice under Investment Dealer and Partially Consolidated Rule subsection 2246(2), apply for a material change to its business activities and obtain CIRO’s authorization.
Once authorized, the member must operate the business line within the terms CIRO has imposed.
CIRO and the CSA said they will keep monitoring developments in event contracts and may issue further guidance or add restrictions where they consider it appropriate.
CIRO first set terms and conditions for event contracts on March 26, 2026, in Bulletin 26-0076, limiting members’ offerings to economic forecasts, environment forecasts and financial indicators contracts.
Those terms required contracts to run at least 30 days to maturity, barred contracts based on elections, political events or unlawful activities under Canadian law, and prohibited clients from using leverage, including margin accounts.
As of the March bulletin, CIRO had authorized two Investment Dealer Members to facilitate trading in a limited set of event contracts listed and cleared on certain exchanges and clearing houses regulated by the U.S. Commodity Futures Trading Commission.
On August 27, 2026, CSA staff and CIRO staff issued joint guidance in which CSA staff took the view that sports and entertainment event contracts should not fall under securities and derivatives legislation; CIRO staff saw facilitating or approving member applications to trade such contracts as inappropriate.
The October update writes that position into the terms and conditions.
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