Isabelle Lee
Bloomberg News
(TNS)
The top U.S. securities regulator is delaying the launch of a wave of novel exchange-traded funds that would let investors wager on events such as elections and economic data as the agency weighs how far the $15 trillion ETF wrapper can stretch.
Securities and Exchange Commission Chairman Paul Atkins said Wednesday that he has instructed staff to seek public input on proposed products that raise new regulatory questions. He noted that fund sponsors have agreed to delay several ETFs tied to prediction market contracts while the commission deliberates.
“Novel products raise novel questions, and I appreciate the willingness fund sponsors have shown in delaying the effectiveness of a number of novel ETFs, including event contract ETFs, while we consider the implications,” he wrote in a statement.
Polymarket and Kalshi, the two dominant prediction markets, offer financial contracts that allow users to place yes-or-no bets on the outcomes of various events, including sports, elections and pop culture.
Both platforms still require dedicated accounts and specialized on-ramps, limiting their reach. An ETF wrapper would drop political event contracts into standard brokerage accounts.
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Earlier this year, Roundhill Investments submitted paperwork for six funds that would have their value tied to event contracts on presidential, Senate and House races. GraniteShares submitted similar offerings while Bitwise Investments proposed a broader slate under the PredictionShares brand. Beyond politics, Bitwise’s filings included products tied to macroeconomic outcomes, including contracts on whether the U.S. will enter a recession in 2026 and whether layoffs in 2026 will be higher or lower than in 2025.
The ETF industry has steadily absorbed strategies once considered too exotic for a fund wrapper—from volatility futures to spot Bitcoin. Prediction market ETFs are the latest frontier.
The new delay is notable given how accommodating Atkins has been toward digital innovation since taking the SEC’s helm. His commission dropped a raft of crypto enforcement actions, greenlit a slew of crypto ETFs and signaled broad openness to blockchain-based financial products.
The SEC didn’t give a timeline for the public comment process.
“The SEC is obviously not fully comfortable with these filings—or at least not comfortable with opening Pandora’s box to all of what predictions markets offer,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “I suspect they will be looking for a way to draw a line.”
— With assistance from Nicola M White.
Photo caption: SEC Chairman Paul Atkins (New York Stock Exchange/YouTube)
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©2026 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency LLC.
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