FCA Discusses Easing Retail Ban on Financial Prediction Markets

The U.K. Financial Conduct Authority has held talks with several trading platforms about possibly relaxing its ban on retail investors trading financial prediction markets. According to Foresight News, the FCA has treated these contracts as binary options and has barred their sale to retail investors since 2019 over concerns that customers could suffer significant losses and may not understand the risks. Industry participants have been lobbying the FCA to lift the ban as more U.K. consumers turn to overseas platforms such as Kalshi and Polymarket, with some using VPNs to bypass regional restrictions. They have argued that pushing the business offshore exposes traders to operators that may not follow regulatory standards. The FCA earlier this year sought industry feedback on expanding access to consumer trading products and is continuing to review rules on speculative investments. Its public position remains in favor of keeping the ban. The FCA did not respond to a request for comment.