FAIR Canada urged Canadian securities regulators on September 24, 2026, to keep limits on retail prediction-market contracts until broader access is shown to benefit investors and serve the public interest.

The investor-rights organization was responding to Wealthsimple’s August 4 white paper. The company argued that event contracts should remain subject to securities and derivatives rules rather than gambling law.

Wealthsimple also proposed replacing some current restrictions with rules based on the source used to settle each contract.

The dispute over event contracts

Prediction markets allow users to buy and sell contracts tied to future events. A contract typically pays a fixed amount if the event occurs and nothing if it does not.

Wealthsimple says the product functions like a derivative. The company argues that prices reflect market expectations and that users trade against other participants rather than a gambling house.

It also says securities regulation can address manipulation, insider trading, client funds and intermediary risk.

FAIR Canada says legal structure alone should not determine whether a contract belongs in the retail investment market. It argues that a product may qualify as a derivative in law while operating like a wager in substance.

FAIR Canada said broader distribution should follow only after firms demonstrate clear investor benefits, effective protections and a strong public-interest case.

What Canadian regulators allow

The Canadian Securities Administrators and the Canadian Investment Regulatory Organization allow authorized investment dealers to facilitate a limited range of event contracts.

The permitted categories cover:

  • Economic indicators.
  • Financial-market indicators.
  • Climate-related indicators.

Other conditions also apply:

  • Contracts must meet the conditions imposed on authorized dealers.
  • Dealers cannot offer contracts tied to political events, elections or referendums.
  • Contracts based on sports and entertainment outcomes were excluded from the securities framework in guidance issued on August 27, 2026.
  • Rules governing binary options generally restrict contracts with maturities of less than 30 days in most Canadian jurisdictions.

The Canadian Securities Administrators and the Canadian Investment Regulatory Organization said on April 2, 2026, that only two members of the investment industry organization had been authorized to facilitate Canadian access to event contracts.

They also said no prediction market had been recognized as an exchange or registered as a dealer under Canadian securities rules at that time.

Why retail protection is central

FAIR Canada warned that wider access could expose retail clients to losses, opportunity costs and market-integrity risks.

It also pointed to a potential conflict for dealers. Firms could benefit commercially from higher trading activity and a wider range of contracts.

Wealthsimple’s proposed and product-level safeguards include:

  • No leverage.
  • Capped losses.
  • Client education and risk disclosures.
  • Recommended loss limits.
  • Deposit limits.
  • Trading breaks.
  • Self-exclusion tools.

Wealthsimple says these controls could address harmful participation without pushing Canadians toward offshore platforms.

FAIR Canada argues that demand, or the availability of unregulated alternatives, does not by itself establish a public-interest case for broader retail access.

What regulators may decide next

The immediate question is whether regulators will expand the types of contracts that authorized dealers may offer.

The decision would affect the boundary between securities oversight and provincial and territorial gaming regulation.

Sports betting in Ontario, for example, remains a gaming activity overseen through the province’s gambling framework. Wealthsimple’s permitted event contracts operate through the securities system.

The Canadian Securities Administrators and the Canadian Investment Regulatory Organization have said they will continue reviewing prediction markets and may change the conditions applying to dealers.

FAIR Canada’s response increases pressure on regulators to demonstrate that any expansion protects retail clients before treating wider event-contract access as a financial-market innovation.