SEC Continues To Delay Approval Of Prediction Market ETFs
David Genge Published 14/05/2026
The Securities and Exchange Commission continues to drag its feet when it comes to the approval of exchange-traded funds (ETFs) created by prediction market sites. Approval of 20 ETFs by issuers Bitwise, Roundhill, and GraniteShares was anticipated to happen on Monday. The SEC insists that it needs more time to assess how the products will function and what the risks to investors might be.
Under SEC rules, ETFs are supposed to be automatically effective 75 days after filing unless otherwise halted by the SEC. That 75-day window for these ETFs reached its conclusion late last week without approval being granted to the funds.
ETFs are breaking new ground in the prediction market industry
The introduction of ETFs into the realm of prediction markets presents a regulatory challenge to the SEC. Unlike traditional ETFs, investing in these funds is directly tied to event contracts. Players essentially are placing bets on the outcomes of real-world events.
These new ETFs would be offering investors a method for wagering on the outcome of elections and economic events. For instance. ETF issuer Roundhill is planning to launch several funds that will be based on future presidential elections. Other ETFs cover which party will end up controlling the Senate and the House. The funds are designed to enable investors to realize a profit if the selected party wins the next election.
SEC Chairman Paul Atkins insists that protecting investors and guarding against insider trading are the main responsibilities of his organization.
“Investor protection and focusing on market manipulation ... is very important to me and obviously to the SEC," Atkins said during an appearance on CNBC’s Squawk Box. "That is in our DNA.”
The SEC and the Commodities Futures Trading Association (CFTC) work in conjunction when approving new types of prediction market funds. The CFTC is the federal regulatory authority of prediction markets.
Industry analysts aren't concerned by the SEC delay on ETFs
Certainly, ETFs will be groundbreaking in the realm of prediction markets. So perhaps that explains why the SEC is delaying breaking new ground by approving these funds.
Some analysts believe that the delay is not the least bit concerning. It's simply that the SEC is opting to err on the side of caution.
"Prediction market ETFs delayed again, not launching today as planned," Eric Balchunas, a senior ETF analyst with Bloomberg Intelligence, wrote in a post on the social media site X. "SEC wants to look at them a bit more. Doesn't sound lethal, just more double-checking disclosures."
"These really are groundbreaking (and once they launch, a precedent is set), so I get regulators wanting a little more time with them."
The cautious approach of the SEC is likely about a desire to unearth a more detailed blueprint on how the funds will work.
“With any kind of novel exposure in the ETF, there will always be some last-minute hiccups,” Todd Sohn, chief ETF strategist at Strategas Securities, told CNBC. “You could replace any new type of asset class and ETF.
"It’s usually the case where things get pushed back a bit.”
Issuers of ETFs are willing to be patient with the SEC
Even the companies behind these unique ETFs seem to be aware that the SEC was going to take a slow roll approach with their implementation. And they also appear to be fine with that.
“We recognize that innovative ETF products often require additional review, particularly around liquidity, market structure, and investor protections," GraniteShares CEO Will Rhind said in a statement to CNBC. "Our priority is making sure investors are comfortable with how these products work and understand the role they can play within a regulated ETF structure.”