33. As noted above, event contracts may be covered by the statutory definition of the term “swap” in CEA section 1a(47)(A). 64 What aspects of prediction markets are relevant to whether event contracts should, or should not, appropriately be classified as swaps? What aspects, if any, distinguish event contracts from other types of swaps? The definition in CEA section 1a(47)(A)(ii) includes an event contract that “is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.” 65 What potential financial, economic, or commercial consequences underlie event contracts? Similarly, CEA section 1a(47)(A)(i) includes an event contract that is an option “based on the value, of … financial or economic interests or property of any kind.” 66 How are any event contracts based on the value of financial or economic interests or property? What idiosyncratic risks embedded in event contracts differentiate them from other commodity derivative instruments? How should the Commission take these risks into account when considering how to regulate event contracts and prediction markets? Commodity options are also covered by the statutory swap definition in CEA section 1a(47)(A)(i). 67 How are event contracts similar to, or different from, other types of commodity options? 34. Event contracts are also traded on DCMs as futures contracts. 68 What aspects of prediction markets are relevant to whether event contracts should, or should not,
64 See text accompanying note 11, supra . 65 7 U.S.C. 1a(47)(A)(ii). 66 7 U.S.C. 1a(47)(A)(i). 67 Id . 68 See supra , note 14.
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