(AsiaGameHub) –   Canada’s federal securities regulator has approved two companies to begin trading in prediction markets as it cautiously dips its toes into this highly contentious investment category.

The Canadian Investment Regulatory Organization (CIRO) has authorized Interactive Brokers Canada and Toronto-based Wealthsimple to launch trading in event contracts, which will be finalized by the U.S. Commodity Futures Trading Commission (CFTC)—the agency that supervises CFTC-licensed platforms such as Kalshi, PolyMarket, and Crypto.com.

CIRO oversees investment dealers and establishes rules for event contract trading. A separate body, the Canadian Securities Administrators (CSA), collaborates with provincial securities regulators across Canada to ensure national consistency.

Louis Morisset, former chair of the CSA, stated:

Binary options are the leading form of investment fraud facing Canadians today, and the impact of these scams on individuals is immense.

CIRO has clarified that only a limited variety of contracts will be allowed: their maturity dates must be at least 30 days away, and they can be based on economic, environmental, or financial indicators. All these contracts will be classified as derivatives, so they will be subject to the same rules and oversight from both CIRO and participating provincial regulators that govern options trading.

Additionally, CIRO noted that event contracts related to elections, political nominations, referenda, or any activity unlawful under Canadian law will not be permitted. This aligns with the CSA’s prior ban on short-term binary options, which were also strongly associated with fraud and harm to the investing public.