Polymarket unit gets US industry organization's approval to be futures broker

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The National Futures Association (NFA) industry group granted the unit, PM Derivatives LLC, approval to operate as a futures commission merchant (FCM), according to the NFA's website and a Polymarket statement.

Polymarket - a major online destination for those betting on Tuesday's midterm election results and other events - will still need approval from the US Commodity Futures Trading Commission for it to run an FCM broker.

The NFA's endorsement opens the door for further Polymarket expansion at a time when it and other prediction markets are facing scrutiny and legal headwinds. The markets ​allow traders to bet on real-world events, including sports, government policy announcements and elections.

Aided by supportive policies under President Donald Trump's second administration, the industry has surged over the past two ​years.

The FCM approval would give Polymarket, which currently runs a CFTC-registered exchange and an offshore platform, the license to act as an intermediary, carrying customer orders and funds. PM Derivatives plans to operate on a fully collateralized basis, with all positions funded in full at the time of trades, the company said.

In the statement, PM Derivatives Chief Executive Nikhil Joshi described the approval as a "foundational step" for the firm.

Polymarket has been a major player in prediction markets' surging popularity, but has faced government scrutiny over some of its marketing and other practices. The CFTC is currently investigating the firm.