The UK Financial Conduct Authority will publish its position on expanding consumer access to investments in September, including binary options and prediction markets banned since 2019.
The regulator prohibited retail binary options over high loss risk and poor product understanding among retail traders. The FCA currently classifies prediction markets on financial instruments as speculative products with a 'gambling nature of contracts'. In December it opened a discussion paper for public comment, closed in March, with findings promised in the third quarter. The FCA said it 'may consult on issues from the paper', including speculative products.
Several market participants have already submitted arguments to the FCA for lifting the ban, according to The Times. The main case: millions of UK residents use offshore platforms via VPN, placing them outside the regulator's jurisdiction.
Even if the ban is relaxed, operators will need two licences. The FCA regulates prediction markets on financial assets, while the Gambling Commission covers politics and sports — the same split that applies to betting exchange Matchbook. That dual jurisdiction means two compliance frameworks and two sets of capital requirements, which may slow launches.
