consider in applying this provision to prediction markets? Are there aspects of prediction markets that make them more or less susceptible to disruptive trading practices? 6. With respect to any rule changes that the Commission may propose for the foregoing reasons, what are the relevant considerations of costs and benefits? 51 What less costly alternatives should the Commission consider? Please provide any relevant specific information, data, or studies regarding the costs and benefits of such regulations that you may have. B. Public Interest 7. As described above, CEA section 5c(c)(5)(C) provides for the Commission to make a determination that event contracts are “contrary to the public interest” if the event contracts involve any of five listed activities or “other similar activity determined by the Commission, by rule or regulation, to be contrary to the public interest.” 52 In general, what factors should the Commission consider in making a public interest determination under this section? (Public interest factors specific to the five listed activities are discussed in part II.C., below, in connection with those activities.) 8. The public interests underlying the CEA are described in CEA section 3(a), which states that “[t]he transactions subject to [the CEA] … are affected with a national public interest by providing a means for managing and assuming price risks, discovering prices, or disseminating pricing information through trading in liquid, fair and financially 51 CEA section 15(a) requires that the Commission, before it promulgates a regulation under the CEA, consider the costs and benefits of its action. 7 U.S.C. 19(a). Further, CEA section 15(a)(2) states that “[t]he costs and benefits of the proposed Commission action shall be evaluated in light of- (A) considerations of protection of market participants and the public; (B) considerations of the efficiency, competitiveness, and financial integrity of futures markets; (C) considerations of price discovery; (D) considerations of sound risk management practices; and (E) other public interest considerations.” 7 U.S.C. 19(a)(2). In responding to this question, please consider these five considerations. 52 7 U.S.C. 7a-2(c)(5)(C).
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