In August, I wrote about how Wealthsimple Predict was displaying markets its Canadian users could not trade, including a U.S. presidential election market showing roughly $55 million in open positions. In that article, I considered the potential impact of displaying unavailable market data, and noted that CIRO's published approval materials did not address the point.
It looks like someone over at CIRO was thinking along the same lines, because on October 16, the organization updated its terms and conditions for Investment Dealer Members that offer or facilitate trading in event contracts, addressing the display question directly.
What Changed
The October 16 update accomplishes three things. First, it lists sports and entertainment contracts as expressly prohibited. This formalizes the August 27 joint CSA and CIRO staff notice , in which CSA staff announced those contracts should not be regulated under securities and derivatives legislation and CIRO staff said they would not approve dealer applications to trade them.
Second (and most relevant to this article), dealers may not directly or indirectly advertise or display contracts they are not permitted to offer. That means Canadian platforms must keep prohibited markets out of search results, recommendations and marketing material, and avoid linking clients to those markets on third-party sites. Each dealer now has to screen its exchange partner's listings before they reach Canadian clients, and keep screening as new markets are added.
Finally, the update now expands the definition of "event contract" to cover any product commonly described as an event contract, prediction contract, prediction market contract or forecast contract. The stated purpose of this change is to categorize a product based on how it functions rather than what it’s called.
The existing limits to these markets are unchanged from the launch in the summer. Permitted contracts remain confined to economic, environmental, and financial indicators, with a minimum term to maturity of 30 days and no leverage. Along with sports and entertainment, election and other political contracts are still prohibited.
The terms also give some guidance on what is included in the permitted categories. Section 3 of the update requires a permitted contract to settle on an objectively measurable indicator, such as a published statistic or a recorded measurement, that meets CIRO’s requirements for its category. A contract that simply relates to the economy, the environment, or financial markets does not qualify. CIRO gives three pairs of examples:
- A contract on the published unemployment rate is an economic indicators contract, while one on whether a particular employer will terminate employees is not.
- A contract on the published value of a securities index qualifies as a financial indicators contract, but one on whether a company will announce an IPO or acquisition does not.
- Measured rainfall supports an environmental indicators contract; whether a government will announce an environmental policy does not.
But Why?
CIRO's stated reason for the display restriction relates to consumer confusion. Clients who see a contract on an authorized dealer's platform may assume Canadian regulators have approved it. It treats the appearance of a market on a regulated platform as an implied representation that the market is authorized.
The restriction also impacts marketing materials. Recent reporting shows that, after the update, Wealthsimple's Predict promotional page still displays illustrative questions about an OpenAI IPO and a foldable iPhone (markets that are still visible as of the writing of this article). Neither is a sports or entertainment question, but the IPO example is similar to the one CIRO uses in Section 3 to illustrate a contract outside the financial indicators category, which suggests it is a contract Wealthsimple cannot offer or advertise. Section 3 has no example covering product launches, so whether or not the foldable iPhone question fits a permitted category remains a call each dealer has to make about its advertising.
What It Doesn't Reach
The update applies to CIRO's members, and only two are currently authorized to facilitate event-contract trading in Canada: Wealthsimple and Interactive Brokers Canada. Offshore platforms fall outside of CIRO’s mandate.
Our August article suggested that restricting display on regulated sites would have limited value while the same information is freely available elsewhere. The October 26 Toronto mayoral election is a good example - Polymarket recorded more than USD $1.3 million in volume on it , while serving a two-year Ontario ban running until April 2027. Public volume figures do not show where traders are located, so how much of that came from Ontario is unknown. What is known is that a Canadian who can no longer see an election market in a dealer's app can easily find one in a browser.
The IPO example bears directly on the Wealthsimple promotional page discussed above. A question about whether OpenAI will go public appears to sit on the wrong side of that line.
What Now?
The number of dealers subject to CIRO’s terms may continue to grow. A team led by former Vanguard Canada chief executive Atul Tiwari has applied to CIRO for investment dealer registration , with plans for an event-contract platform called VerdX. Any new entrant will take on these new screening and display obligations from the start. CIRO and the CSA have also said their assessment of other categories of event contracts is ongoing and that the terms may be restricted further, including for dealers already authorized.
