The US SEC has delayed its review of the first batch of prediction market ETFs, with more than 20 products still awaiting regulatory approval.

The delayed regulatory review, spearheaded by the U.S. Securities and Exchange Commission (SEC), has prevented the launch of the first batch of prediction market-related ETFs, postponing their listing dates. Several institutions, including Roundhill Investments, GraniteShares, and Bitwise Asset Management, submitted applications for more than 20 prediction market-related ETFs in February, covering event-driven products such as election results, economic recessions, tech layoffs, and commodity prices. Under SEC rules, ETFs typically become effective automatically within 75 days of submission unless further review is requested by the regulator. This round of products was originally expected to launch this week, but the listing was postponed due to the SEC's requirement for issuers to supplement product mechanisms and disclosure details. Sources indicate that the delay may be a short-term adjustment. These ETFs typically track the probability of "yes/no" events, such as election results or economic indicators, through derivative instruments and are linked to prediction market platforms regulated by the CFTC (such as Kalshi). Each contract pays $1 if the event occurs, otherwise it goes to zero. While prediction market trading has recently seen rapid growth due to increased activity driven by political events and geopolitical conflicts, it has also raised regulatory concerns about insider trading and market manipulation. Bitwise's chief investment officer stated that innovative financial products typically require lengthy regulatory cycles, but ultimately may still be successfully launched, emphasizing that prediction market ETFs could become a new channel for retail investors to access event trading. (Reuters)