dispute resolution as appropriate for, market participants and any market intermediaries,” 36 are relevant in this regard? c. Core Principle 3 states that a DCM may list “only contracts that are not readily susceptible to manipulation.” 37 How should a determination of whether an event contract is “readily susceptible to manipulation” be made? What factors should be considered? Are there particular aspects of event contracts that make this determination different from the determination with respect to other listed contracts? Do any existing rules for other types of exchanges and platforms (i.e., not prediction markets) limit or mitigate the potential for manipulation? If so, how and to what extent are these rules appropriate as requirements for prediction markets? See also the questions regarding inside information in part II.E. below. d. Core Principle 4 states that a DCM “shall have the capacity and responsibility to prevent manipulation, price distortion, and disruptions of the delivery or cash- settlement process through market surveillance, compliance, and enforcement practices and procedures.” 38 Do any aspects of prediction markets pose challenges to compliance with this Core Principle or, on the other hand, facilitate compliance? Are there market surveillance, compliance, or enforcement practices on which the Commission should focus? Are there existing surveillance practices for detecting suspicious activity in other types of exchanges and platforms that would be useful in prediction markets? e. Core Principle 5 states that a DCM shall, for each contract, adopt position limitations or position accountability for speculators as is necessary and appropriate to
36 CEA section 5(d)(14), 7 U.S.C. 7(d)(14). 37 CEA section 5(d)(3), 7 U.S.C. 7(d)(3). 38 CEA section 5(d)(4), 7 U.S.C. 7(d)(4).
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