Comment Text:
Dear CFTC,
I am writing to express my strong opposition to the Commission's proposed actions regarding event contract markets, particularly those related to elections, global events, and other significant occurrences. The Commission's proposal is not only misguided but actively works against the public interest.
Event contract markets serve a crucial dual purpose:
Risk Hedging: These markets allow participants to efficiently hedge against risks associated with one-off or non-standard events. This includes elections, global crises (such as wars, terrorist attacks, or pandemics), and other potentially catastrophic outcomes. The ability to hedge against such risks is invaluable for businesses, organizations, and individuals alike.
Information Aggregation: Perhaps even more importantly, these markets produce a well-honed price signal that informs the general public about significant events of public and national interest. This externality is a substantial public good, providing real-time, market-based assessments of probabilities related to critical events.
The Commission's proposal seeks to eliminate these benefits based on what appears to be a distorted perspective, clouded by remote possibilities and unsubstantiated claims about potential adverse consequences. The resulting draconian measures would disallow entire categories of event contracts that have substantial public and national benefits.
It is particularly concerning that the Commission's proposal ignores widely publicized and well-known data and case studies that clearly demonstrate the public and national interest benefits of event contracts. Instead, the proposal offers no concrete data or evidence to substantiate its concerns. This approach is not only unscientific but potentially harmful to the public interest.
The available data, which I urge the Commission to review thoroughly, shows that many of the event contracts the Commission aims to classify as contrary to the public interest are, in fact, critical to the public and national interest. These markets have consistently provided valuable insights and risk management tools that benefit a wide range of stakeholders.
I implore the Commission to reconsider its position and to base its decisions on empirical evidence rather than speculative concerns. The potential loss of these valuable market mechanisms would be a significant setback for public information and risk management capabilities.
Furthermore, I urge the Commission to engage in a more comprehensive dialogue with market participants, academics, and other stakeholders to fully understand the implications of its proposed actions. A more nuanced and evidence-based approach is necessary to ensure that any regulatory changes truly serve the public interest.
