The capital markets space in August saw accelerating momentum in both prediction markets and regulatory initiatives. Prediction markets experienced surging expansion as new entrants announced new marketplaces to buy and sell event contracts. Meanwhile, both the Commodity Futures Trading Commission and the Securities and Exchange Commission offered further clarity and transparency on treasury clearing, digital assets and market surveillance.
Innovation in prediction markets gains momentum
A leading U.S. futures exchange in mid-August announced its partnership with a leading online gaming operator to launch event contracts. Through this new joint venture, the two entities will operate as a non-clearing futures commission merchant, subject to approval by the CFTC. The partnership is expected to launch its first products later in 2025.
The event contracts offered on the newly formed prediction market platform will allow retail investors to speculate on the outcome of the S&P 500, oil and gas, gold, and other key economic benchmarks. This partnership demonstrates the continued focus by capital markets organizations on products that appeal to retail investors.
Another August development in the event contracts space was the launch of The Clearing Company, which aims to launch an on-chain prediction market platform that allows investors to purchase and sell event contracts using blockchain infrastructure. Founded by former Polymarket and Kalshi employees, The Clearing Company plans to differentiate itself from other prediction markets by leading with compliance and prioritizing know-your-customer checks, anti-money laundering controls, and on-chain audits. The company’s debut is another indicator that these instruments are gaining popularity and acceptance by U.S. investors.
Regulatory developments
On Aug. 6, the SEC launched a frequently asked questions resource for broker-dealers to reference as they navigate the amendments to the Customer Protection Rule, specifically questions related to the clearing of certain U.S. treasury securities. The FAQ captures various inquiries the commission has received and is one of numerous ways the commission is looking to offer practical guidance to broker-dealers as they prepare for the upcoming compliance deadlines on Dec. 31, 2026, for cash transactions and June 30, 2027, for repurchase agreements.
On Aug. 1, CFTC Commissioner Caroline Pham announced the agency’s “crypto sprint” initiative, aimed to expedite the recommendations gathered from the President’s Working Group on Digital Assets, issued earlier this year. Later in the month, Commissioner Pham announced that the next sprint would begin with the objective to gather stakeholder feedback on the recommendations outlined within the Strengthening American Leadership in Digital Financial Technology report. Those recommendations included:
- Enabling the trading of digital assets at the federal level
- Creating a lasting framework for digital asset market structure
- Improving the AML/CFT and sanctions framework
- Equipping digital asset actors to mitigate risk
The public can submit feedback and recommendations by Oct. 20, 2025, via the CFTC’s website. These developments reflect the commission’s efforts to streamline regulatory developments, and to foster U.S. innovation in the digital assets space.
Read more financial services insights from RSM.
Technology upgrades for regulators
Also in August, the CFTC announced that it would deploy Nasdaq’s surveillance technology platform to strengthen and modernize its market surveillance systems and processes. Through Nasdaq’s technology, the CFTC will deploy customized, automated alerts and will be provided cross-market analytics, further protecting markets and market participants from fraud, manipulation, and abuse.
Nasdaq’s market surveillance software is the most widely used surveillance software and currently serves over 50 exchanges and 20 international regulations, enhancing market integrity on a global scale. With this technology upgrade, the CFTC reinforces market integrity and investor protection, bolstering investor confidence in the U.S. markets.
The takeaway
The U.S. capital markets landscape in August continued shifting toward retail-focused innovation products while simultaneously absorbing more regulatory clarity and oversight. As entrants continue to innovate through their product and technology offerings, we expect regulatory agencies such as the CFTC and SEC to remain actively engaged with market participants to ensure regulatory clarity, transparency, and investor protection. We expect their approach to be balanced, without stifling innovation, which is critical as the U.S. positions itself as a leader in financial markets innovation.
