CSA and CIRO Issue Guidance Related to Event Contracts

CSA and CIRO Guidance on Event Contracts: Top Takeaways

• CSA staff do not consider sports-or entertainment-based event contracts to be products that should be regulated under securities and derivatives legislation and CIRO staff do not consider it appropriate to facilitate or approve dealer-member applications to trade such products.
• Existing CIRO authorization remains limited to specified event contracts based on economic, environmental or financial indicators and traded and cleared through certain U.S.-regulated venues.
• Event contracts may fall within the broad definitions of securities or derivatives, yet may also be excluded from securities or derivatives, depending on the facts and circumstances.
• The CSA/CIRO guidance is therefore neither a red or green light for prediction markets in Canada, but rather a regulatory statement that the CSA is declining jurisdiction over event contracts related to sports and entertainment.

On August 27, 2026, the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) published Joint CSA and CIRO Staff Notice 91-307, Guidance Related to Event Contracts: Compliance with Regulatory Requirements (SN 91-307). SN 91-307 addresses the application of Canadian securities and derivatives legislation to products commonly known as event contracts, prediction contracts and prediction-market contracts (collectively, Event Contracts).

SN 91-307 is significant for dealers, trading platforms and other market participants because it confirms that the CSA is not accepting jurisdiction over Event Contracts based on the structure of the contract, but rather on the nature of the underlying event. The CSA has accepted jurisdiction over Event Contracts based on economic, environmental and financial indicators, but declined jurisdiction over Event Contracts based on sports and entertainment, notwithstanding the fact that the structure of the contract, and its home trading venue (e.g. a CFTC-regulated designated contract market), may be identical.

Notably, SN 91-307 does not address certain categories of Event Contracts that are currently prohibited for CIRO members to offer to their clients under CIRO bulletin Application of CIRO Requirements to Event Contracts and related terms and conditions (CIRO T&Cs) published by CIRO in March 2026.  

The CIRO T&Cs also prohibit CIRO members from offering Event Contracts having a term to maturity of less than 30 days, reflecting Multilateral Instrument 91-102, Prohibition of Binary Options (MI 91-102) which prohibits a person from advertising, offering, selling or otherwise trading a binary option having a term to maturity of less than 30 days with or to an individual. MI 91-102 is in force in all Canadian jurisdictions other than British Columbia, where a substantially similar outcome is achieved through BC Notice 2017/02 Binary Options.

Guidance from SN 91-307

SN 91-307 does not establish a comprehensive regulatory framework for Event Contracts in Canada. Instead, it reminds market participants that the CIRO members authorized to facilitate trading in Event Contracts remain subject to the CIRO T&Cs.

The CSA acknowledges that Event Contracts may fall within the broad definitions of a security or derivative under applicable provincial and territorial legislation. However, the CSA also states that securities and derivatives legislation, rules and related guidance contemplate that certain instruments may fall outside the framework—or may be excluded from it—depending on the facts and circumstances.

Against that background, CSA staff state that Event Contracts based on sports or entertainment events or outcomes should not be regulated under securities and derivatives legislation. SN 91-307 also states that CIRO staff do not consider it appropriate to facilitate or approve an application by a CIRO investment dealer member to trade contracts based on sports and entertainment events or outcomes, regardless of how the product may be labelled or structured.

Further Guidance Is Expected

SN 91-307 is expressly limited in scope. It addresses sports and entertainment Event Contracts, while noting that other types of Event Contracts may raise separate questions about whether they should be characterized as securities or derivatives. The CSA and CIRO state that their assessment of other categories of Event Contracts is ongoing and further guidance will follow.

This staged approach is important. SN 91-307 does not provide a comprehensive framework for all prediction markets. Rather, it establishes the CSA and CIRO’s position on one category of products and preserves flexibility to address other categories as markets continue to develop.

SN 91-307 also notes that the CIRO T&Cs applicable to Event Contracts are under continuing review as they may be subject to further restrictions or other changes, including changes affecting existing CIRO members authorized to offer Event Contracts and any CIRO members seeking authorization in the future.

Securities and/or Derivatives Legislation May Apply

SN 91-307 emphasizes that any person trading or facilitating trading in an Event Contract that constitutes a security or derivative must comply with applicable securities and derivatives legislation.

Depending on the product and the relevant jurisdiction, this may include registration, recognition and other regulatory requirements such as dealer registration, prospectus requirements and/or exemption from such requirements. SN 91-307 also expressly refers to commodity futures legislation in certain CSA jurisdictions.

The characterization of an Event Contract cannot therefore be determined solely by its name, marketing description or commercial purpose. Firms must assess the product’s legal and economic features, including its payout structure, underlying event, trading venue, clearing arrangements and method of settlement. A platform or dealer that facilitates access to an Event Contract should not assume that the product is outside Canadian securities regulation merely because it is described as a prediction contract or because it is offered through a foreign venue.

Please reach out to Sean Sadler, Lori Stein, Daanish Pasricha or another member of our Securities Regulation & Investment Products group if you have any questions or require assistance in offering Event Contracts in Canada.