Wall Street regulator calls for public comment on 'novel' exchange traded funds

The U.S. Securities and Exchange Commission (SEC) has asked the public to comment on how to regulate “novel” exchange-traded funds (ETFs) backed by prediction markets. The call came on Tuesday, two months after the SEC delayed approval for dozens of such funds. The approval delays were linked to ETFs whose returns depend on outcomes in real-world events, including elections. The SEC’s action indicates heightened scrutiny of products that translate betting-style prediction market outcomes into ETF wrappers. Reporting by Douglas Gillison and Daphne Psaledakis covered the SEC’s request for public input and the broader context of the earlier delay. The notice sets the stage for further regulatory review before the funds can proceed.