CFTC asks Robinhood to stop giving customers sports event contract access
The company said it will comply with the request.
Key Points
- The company does not agree with the CFTC’s request
- However, it is cooperating and will continue to communicate with the CFTC
Robinhood Derivatives (RHD) recently received a formal request from the Commodity Futures Trading Commission (CFTC) to “not permit customers to access” sports event contracts, including those from the Pro Football Championship market.
The company has agreed to abide by the CFTC’s request. However, Robinhood said that it will provide customers who have placed trades with resolution options.
RHD said in a statement, “While we continue to work with the CFTC to understand their concerns, we are suspending the rollout of the Pro Football Championship market.
“We have rolled this product out to roughly 1% of our customers, and for those who already placed trades, we plan on providing the option to close their positions or take them to resolution.”
The company explained in its statement why it believes clients should have access to these contracts.
RHD commented, “Prohibiting event contracts unnecessarily stifles innovation and undermines consumer choice.
“The CFTC should withdraw this proposal to protect the principles of market-driven innovation and self-direction that have historically benefited investors and the broader financial system.”
However, RHD said it plans to continue collaborating with the CFTC “as we work to roll out a more comprehensive event contracts platform later this year.”
The company added that it has worked to keep communication going between the CFTC.
RHD said in closing, “We are disappointed by this outcome, especially given that we had been in regular communication with the CFTC about our intent and plans to offer this product.
“We’ve also taken steps to advocate for balanced regulation in the futures and derivatives markets, including participating directly in a CFTC roundtable, providing written feedback to the CFTC, and generally championing the economic benefits of event contracts. “
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