Investors watching the fast-growing prediction markets space learned this week that the European Securities and Markets Authority (ESMA) considers event contracts to be binary options under EU law, regardless of how platforms choose to brand them. The ruling, published on 3 July, carries direct consequences for any European retail investor considering these products.
ESMA Rules on Prediction Markets Binary Options
ESMA defines event contracts as agreements with a binary outcome: you receive a fixed payout if a specific yes-or-no event occurs, or you receive nothing if it does not. That structure, the regulator says, puts many of them squarely within the EU’s existing ban on binary options for retail clients.
Not every event contract automatically qualifies as a financial instrument. Classification depends on whether the underlying question relates to areas covered by MiFID II (the Markets in Financial Instruments Directive, which governs investment products and services across the EU). Contracts tied to, say, a sports result may sit outside MiFID II; contracts referencing financial market outcomes are more likely to fall within it.
The timing of ESMA’s statement is telling in context. Prediction markets exceeded $50 billion in monthly trading volume for the first time in June, a 75% jump from May, according to Artemis data. Kalshi led the field with around $33 billion in volume, Polymarket handled $14 billion, and Robinhood-backed Rothera contributed approximately $2 billion. Activity was partly driven by FIFA World Cup betting markets. That scale of retail participation is precisely what tends to prompt regulatory clarification.
CMC Markets Jumps on Everton Deal and Profit Upgrade
Closer to home for UK ISA holders, CMC Markets (CMCX) had the week’s sharpest share-price move. The stock surged around 23% on Wednesday, hitting a record high. The snippet reports the closing level at around 570 pence, above the previous peak of 559 pence set in April 2021; a separate analysis by The Esk put the intraday all-time high at 562 pence and the market capitalisation at approximately £1.53 billion. The precise closing figure is not reconciled between those two sources, but the direction and scale of the move are not in dispute.
The trigger was a second guidance upgrade in a matter of weeks. CMC lifted its FY2027 net operating income target to at least £550 million, up from a £460–480 million range set only in early June, alongside EBITDA guidance of £250 million. That follows a strong FY2026: in the year ended 31 March 2026, the company reported record net operating income of £392.6 million, up 15% year-on-year, and profit before tax of £101.3 million, up 20%, with the board raising the full-year dividend by 21% to 13.8 pence per share.
Alongside those numbers came the announcement of a reported three-year shirt sponsorship with Everton Football Club, worth up to £50 million, replacing outgoing sponsor Stake, which moves to a sleeve position, according to Sportcal. CMC’s branding will appear on the senior men’s, women’s, and under-21 shirts, as well as at Hill Dickinson Stadium, Goodison Park, and Finch Farm. Everton had appointed US agency Range Sports in October 2025 to find a new primary sponsor ahead of this deal.
FCA Cuts Stablecoin Capital Buffer
The Financial Conduct Authority (FCA) revised its proposed stablecoin rules this week, halving the capital requirement for issuers from 2% to 1% of assets. The change follows sustained industry criticism; David Geale, the FCA’s head of payments and digital finance, acknowledged that the original threshold may have been too high for current market conditions.
The FCA also eased redemption timelines and public disclosure requirements. The updated framework sits within policy statement PS26/10, which covers issuance, backing assets, redemption, and safeguarding for non-systemic UK-issued qualifying stablecoins. It forms part of a wider FCA cryptoassets regime that also addresses trading platforms, custody, lending, and prudential requirements across several linked policy statements. The stablecoin rules come into force in October 2027.
Other Stories Worth Tracking
Several US prop trading firms, including The5ers, FundedNext, and Goat Funded Trader, have progressively cut off new cTrader accounts for US clients since March. The5ers made the move in June; Goat Funded Trader followed in April. Clients are being redirected to alternatives such as Match-Trader and TradeLocker.
In South Africa, 26 firms withdrew applications for an Over-the-Counter Derivatives Providers (ODP) licence, while four surrendered licences already held, out of 70 entities on the registry. IG Group, one of the more prominent entrants, exited entirely. SALVUS Funds Managing Director Nikolas Xenofontos pointed to elevated compliance costs, mandatory local offices, and the requirement for at least three locally based executive directors as key burdens.
The FCA’s stablecoin changes and ESMA’s binary options ruling both arrive as regulators across major markets appear to be drawing harder lines around products that have outgrown the frameworks built to contain them. The October 2027 implementation date for the FCA’s stablecoin rules gives firms roughly 15 months to adapt, but the ESMA position on prediction markets binary options is effective now.
