Only three types of contracts made the cut — and there's no room for leverage
CIRO gives two Canadian dealers the green light to trade event contracts — but with a tight set of rules attached.
On March 26, 2026, the Canadian Investment Regulatory Organization announced that two investment dealers have been authorized to facilitate trading in event contracts, a type of derivative tied to the outcome of future events. The move comes in response to what CIRO describes as growing interest among market participants and investors in prediction markets and event contracts — a space that, until now, has had little room to operate in Canada.
CIRO's Administrative Bulletin 26-0076 lays out exactly what dealer firms can and cannot do, and the boundaries are tight. Event contracts are restricted to three categories: economic forecasts covering things like sovereign debt levels, inflation rates, central bank reserve rates, labor markets, and housing; environment forecasts pegged to climate indicators such as average global temperature; and financial indicators, including US 500 Forecast Contracts that settle based on the daily settlement price of the Chicago Mercantile Exchange E-Mini S&P 500 Futures.
Everything else is off the table. Contracts tied to elections, political events, political party leaders' nominations, referendums, or anything unlawful under Canadian federal, provincial, or territorial law are explicitly banned. Dealer firms are expected to do their homework and make sure nothing in those categories slips through to clients.
There is also a floor on how short-term these contracts can be. Every event contract must carry a term to maturity of at least 30 days, a threshold that mirrors Ontario's existing ban on short-dated binary options under Multilateral Instrument 91-102, which has been adopted by every province except British Columbia. CIRO went further, clarifying that if a new threshold is issued on an existing event contract, that counts as a new contract — and it, too, must meet the 30-day minimum.
For advisors and portfolio managers, here is another wrinkle worth knowing. Clients cannot use leverage of any kind, including margin accounts, when trading event contracts. That is a hard line, and one that firms will need to account for in their day-to-day operations.
The authorized contracts are traded and cleared through certain exchanges and clearing houses regulated by the U.S. Commodity Futures Trading Commission. Any dealer firm looking to get involved must notify CIRO in writing under Investment Dealer and Partially Consolidated Rule subsection 2246(2). Those wanting to go beyond the three approved categories will need to notify CIRO in writing and file a material change to business activities application.
The broader picture is still taking shape. Torys LLP, in a legal commentary published shortly after the bulletin, noted that the rise of prediction markets raises real questions about how regulators will handle misconduct — from insider trading and tipping to market manipulation and the misuse of confidential business and government information. The firm observed that it remains to be seen whether CIRO will expand the scope of what is permitted, how regulators will address misconduct in practice, and whether provinces like British Columbia, which never adopted the binary options ban, will open the door to further trading in prediction markets.
CIRO and the Canadian Securities Administrators have said they will continue monitoring this space and plan to issue further guidance, which could bring additional restrictions.
This is not a sweeping overhaul. It is a controlled, deliberate first move by the regulator — and how the industry responds will very likely shape what comes next.
