CFTC says domestic geographic limits on DCMs violate impartial access rules

The U.S. Commodity Futures Trading Commission on November 5, 2026 published an interpretation of the impartial-access rule that applies to designated contract markets, focusing on whether exchanges may bar traders by U.S. state or region.

In Release No. 9323-26, the agency said it had issued an interpretation of Commission Regulation 38.151(b)—the requirement that DCMs provide competitive, open, fair and impartial access to members and persons with trading privileges. The accompanying PDF, titled “DCM Impartial Access Requirements,” is labeled as approved by the Commission and subject to pre-publication technical corrections. A download link on the release page points to DCM Impartial Access Interpretive Guidance.

What the interpretation says about geography

Section IV of the interpretation addresses “Access Criteria Based on Geographic Location.” The Commission says it is aware that some DCMs have adopted access criteria that restrict access to certain event contract markets based on prospective traders’ location or residence.

According to the document, the Commodity Exchange Act and Commission regulations “generally do not permit a DCM to limit access based on the location of an otherwise eligible market participant within the United States.” Access criteria, the Commission writes, should turn on financial and operational soundness, not on factors that bar access in a discriminatory way. When a DCM permits participants from one U.S. region or state while barring those from another, the interpretation says, that selective restriction undermines impartial access because it does not treat similarly situated eligible participants uniformly.

The guidance walks through market-structure risks it associates with location-based bars: participants who travel into a restricted jurisdiction may be unable to manage positions or meet margin calls; liquidity and price discovery may suffer if high-volume regions are cut out; national liquidity pools may fragment; and participant bases may shrink. It uses sports-related contracts as an illustration—excluding regions with disproportionate interest in a home team’s playoff path could reduce overall liquidity—and says election markets “may be particularly sensitive” because statewide or local races can draw volume and information from residents of the jurisdiction holding the election.

“For these reasons, the Commission believes that geographic access restrictions are inconsistent with the CEA and Commission rules and regulations,” the interpretation concludes. It expects DCMs to evaluate their access criteria, exchange rules and intermediary access arrangements for compliance. A footnote states that because Core Principle 2 does not allow geography-based access limits, DCMs must take reasonable steps so that intermediaries, who must comply with DCM membership rules, do not impose geographic restrictions that violate impartial access.

The 30-day compliance clock in the press release

The press release adds an operational deadline that is not framed as a numbered effective-date paragraph in the PDF’s body. DCMs “must cease domestic geographic restrictions that violate the Impartial Access Requirements within 30 days, or else submit to the Division of Market Oversight (‘Division’) an explanation for why such compliance is not feasible.” Within the same 30 days, DCMs “should ensure that intermediaries accessing their markets are not impeding and are complying with the DCM’s Impartial Access Requirements,” or else submit a similar explanation. “The Commission will consider the facts and circumstances of any particular case in connection with potential Commission action.”

Chairman Michael S. Selig is quoted in the release: “Derivatives markets must operate on a uniform basis at a national scale in order to achieve the purposes set out in the Commodity Exchange Act. Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.”

Contacts listed on the interpretation include General Counsel Tyler S. Badgley, Deputy General Counsel for Regulation Aaron M. Levine, Counselor Cameron Sinsheimer, and Associate Chief Counsel Roger Smith (Division of Market Oversight).

AskSpinner’s Kalshi and prediction market litigation tracker catalogs U.S. cases in which state geofencing and “impartial access” arguments have been central; the November 5 interpretation does not name individual exchanges or pending lawsuits.

Photo: CFTC (public domain)

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