The Commodity Futures Trading Commission (CFTC) has decided to ease up on compliance rules for event contracts, at least for now. The regulator issued yesterday a no-action letter after a request from QCX LLC and QC Clearing LLC (Polymarket acquired CFTC-licensed entities for $112 million in July, now rebranded as Polymarket US and Polymarket Clearing).  The letter focuses on reporting and recordkeeping obligations, giving these firms and their participants some flexibility under strict swap rules.

• The relief comes from the CFTC’s Division of Market Oversight and Division of Clearing and Risk. It means QCX LLC, QC Clearing LLC, and their participants won’t face enforcement action if they fail to meet certain swap-related recordkeeping requirements. CFTC event contracts have been tricky to fit under standard swap regulations, which is why regulators stepped in.

• The no-action letter applies to binary option transactions and variable payout contract transactions. Both types of trades are run through QCX LLC and cleared by QC Clearing LLC. Normally, these would fall under swap data reporting obligations to official repositories.

• Without this relief, participants would have been on the hook for swap data reporting and strict recordkeeping standards. The CFTC acknowledged that applying the same framework to event contracts creates operational challenges. That recognition is why similar exemptions have already been given to other markets.

• The regulator stressed that the relief is limited and applies only under specific conditions. It does not change the CFTC’s broader approach to oversight of swaps or derivatives. Firms cannot treat this as a free pass on reporting in general.

• QCX LLC and QC Clearing LLC now join other designated contract markets and clearing organizations that have received comparable treatment. The CFTC said clearly: “The divisions will not recommend enforcement action,” but only under the terms laid out in the letter.

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