In Canada, regulators have excluded contracts related to the outcomes of sports and entertainment events from the legislation governing securities and derivatives. This effectively closes the door for these instruments to licensed dealers. This position was articulated by the Canadian Securities Administrators (CSA) and the self-regulatory organization of the investment industry, CIRO, in a joint notice (91-307) issued on August 27.
The CSA believes that such contracts should not fall under this legislation, while CIRO does not find it appropriate to facilitate their circulation or approve dealers' applications to trade them.
The Chair of the CSA stated that the notice clarifies the role and responsibilities of Canadian securities regulators concerning these instruments. The CSA and CIRO continue to assess the status of other types of event contracts.
Currently, trading a limited set of event contracts is available through two CIRO dealers under terms established in agreement with the CSA. The permission covers only contracts traded and cleared through separate exchanges and clearing houses under the oversight of the U.S. regulator CFTC. In the future, this activity may face additional restrictions or changes.