CFTC Releases Staff Advisory on Mention Markets

WASHINGTON — The Commodity Futures Trading Commission’s Division of Market Oversight today issued an advisory that addresses the listing and trading of event contracts that are based on whether an individual will say or “mention” certain words, attend or appear at an event, or otherwise interact with another person, which are commonly referred to as “mention market” contracts.

These contract types present a heightened risk of manipulation because their settlement turns on the discrete conduct of a person that may be neither independently generated nor externally verifiable.

The advisory outlines the limited circumstances in which such contracts may be listed consistently with the Commodity Exchange Act and Commission regulations and provides non-exhaustive examples of factors that DCMs should consider when designing and submitting mention market contracts under Commission Regulations Sections 40.2 or 40.3.