factors should the Commission consider regarding whether event contracts should be eligible for margin credit or cross margin, both on DCOs, and when cross-margined with securities exchanges? See also question 2.f. regarding margin considerations for DCMs. 4. Institutional traders (that is, parties that are eligible contract participants) may enter into event contracts on prediction markets registered as SEFs, which are subject to Core Principles in CEA section 5h(f). 45 Are there aspects of prediction markets that the Commission should consider in applying these Core Principles? How is trading on prediction markets by institutional traders the same, or different from, retail trading on prediction markets? How would or does prediction market trading on DCMs and SEFs impact liquidity in both types of exchanges? What factors should the Commission consider in determining whether any public disclosure requirements should apply to prediction market trading on SEFs? For example, would public disclosure help to mitigate, or exacerbate, adverse selection? Are there specific points on which the Commission should provide guidance or adopt rule amendments? If so, why? 5. What factors should the Commission consider in determining whether to provide guidance or amend any other of its regulations with respect to the listing, trading, and clearing of event contracts on prediction markets? a. CEA section 2(a)(13) authorizes the Commission “to make swap transaction and pricing data available to the public in such form and at such times as the Commission determines appropriate to enhance price discovery.” 46 CEA section 2(a)(13)(G) states
45 7 U.S.C. 7b-3(f). The term “eligible contract participant” is defined in CEA section 1a(18), 7 U.S.C. 1a(18). 46 7 U.S.C. 2(a)(13)(B); see also 17 CFR part 43 and 17 CFR part 45.
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