On 3 July 2026, the European Securities and Markets Authority (ESMA) issued a Public Statement on the application of national product intervention measures on binary options to event contracts.

ESMA has issued this Public Statement in response the growing popularity of prediction markets – or event contracts – and increasing retail participation globally.

In the Public Statement ESMA reminds firms that:

  • Event contracts exist for a wide variety of event questions. Not all event contracts are financial instruments. Only event contracts with an event question related to an underlying mentioned in Section C(4) to (10) of Annex I of MiFID II classify as financial instruments.
  • Where event contracts are financial instruments, they classify as derivatives and, given the binary outcome, fall within the scope of the existing national product intervention measures on binary options adopted by Member State competent authorities prohibiting their marketing, distribution or sale to retail clients.
  • The distribution of event contracts qualifying as financial instruments in the EU requires an authorisation as an investment firm, even where only distributed to non-retail clients.