CME Group CEO Terry Duffy on prediction markets, perpetual futures and nonstop trading

Terry Duffy started at CME Group almost five decades ago. Back then, the Commodity Futures Trading Commission was practically brand new. Today, the CME Group chairman and CEO is watching that same regulator approve products he thinks deserve a much harder look. He is not keeping quiet about it. In his latest remarks on how finance regulation has changed, Duffy pointed to three forces reshaping derivatives markets: prediction markets, 24/7 trading and perpetual futures. All three have a crypto fingerprint on them. Hedging or gambling, and who decides Duffy’s central concern is that the line between risk management and wagering has gotten blurry. He argues that contracts built to hedge real economic risk are increasingly hard to tell apart from event products that look a lot like bets. Duffy wants stronger oversight of the space. Specifically, he has called for public regulatory reviews of new derivatives before they hit the market. That puts him at odds with the current self-certification model. Under that setup, an exchange can list a new contract by certifying to the regulator that it complies with the rules, rather than waiting for a full review. CME takes the CFTC to court over ...