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Polymarket's broker unit clears NFA registration as CFTC approval waits

Polymarket's broker unit clears NFA registration as CFTC approval waits

Rule Changes

PM Derivatives is registered but not yet cleared to take customer orders, and the CFTC has set a deadline for exchanges to justify state-level access blocks

6 days ago: CFTC tells regulated exchanges to justify state access blocks

Overview

Updated 3 days ago

Polymarket's brokerage unit, PM Derivatives LLC, is now a futures commission merchant: a firm licensed to take customer orders and hold customer money. The National Futures Association approved the registration on October 30, 2026, and Polymarket announced it on November 3.

Registration is not operation. PM Derivatives still needs Commodity Futures Trading Commission authorization to carry customer orders, and it says every position will be paid for in full, with no borrowing, unless the agency approves margin separately. Separately, on November 5 the CFTC told federally regulated exchanges, including Polymarket US and Kalshi, to stop blocking traders based on their state within 30 days or explain why they cannot.

Why it matters

A registered broker is what lets a prediction market hold customer money in the U.S. Polymarket now has one, pending the CFTC.

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Key Indicators

3
U.S. regulated entities in Polymarket's structure
Exchange, clearinghouse and broker are registered separately.
119
Days from FCM application to NFA registration
Applications were filed July 3, 2026; the registry shows approval October 30, 2026.
100%
Positions that must be fully funded at trade time
PM Derivatives plans to operate on a fully collateralized basis.
March 2026
Month Kalshi's affiliate registered as an FCM
Kinetic Markets LLC reached FCM status about four months before Polymarket's unit.
30
Days for regulated exchanges to end state access blocks
CFTC guidance issued November 5, 2026 covers Kalshi and Polymarket US.

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People Involved

Nikhil Joshi
Nikhil Joshi
Chief executive of PM Derivatives LLC
Leading a registered but not yet operating brokerage

Organizations Involved

Polymarket
Polymarket
Prediction market
Runs a CFTC-registered U.S. exchange and an offshore platform; under CFTC investigation

Polymarket is a prediction market where users trade on real-world outcomes, including elections and government policy.
DE
PM Derivatives LLC
Futures commission merchant
NFA-registered; awaiting CFTC authorization to act as a broker

The Polymarket affiliate licensed to act as an intermediary, holding customer orders and funds.
National Futures Association
National Futures Association
Self-regulatory organization
Approved PM Derivatives as a futures commission merchant

The industry body that registers futures brokers and polices their conduct under CFTC oversight.
Commodity Futures Trading Commission
Commodity Futures Trading Commission
Federal regulator
Has not authorized PM Derivatives to operate as a broker; investigating Polymarket

The federal agency that oversees futures and event contracts, and must clear a broker before it can trade for customers.
Kalshi
Kalshi
Prediction market
Rival whose affiliate registered as an FCM in March 2026

A CFTC-regulated prediction market that reached broker registration before Polymarket.

Timeline

March 2026 November 2026

6 events Latest: 6 days ago
Tap a bar to jump to that date

  1. CFTC tells regulated exchanges to justify state access blocks

    Latest Regulatory

    The agency's Division of Market Oversight said federally regulated exchanges generally may not limit access by state, and gave them 30 days to end such restrictions or explain why they cannot. The guidance covers Kalshi and Polymarket US.

  2. Polymarket announces the broker approval

    Announcement

    The company says it now holds a regulated exchange, clearinghouse and broker in the U.S.

  3. NFA registry shows approval granted

    Regulatory

    All three applications are approved, and the firm is listed as an inactive member.

  4. PM Derivatives files for broker registration

    Filing

    PM Derivatives LLC applies for FCM, NFA membership and swap firm registration.

  5. Senators ask CFTC to ban event-contract margin

    Statement

    John Hickenlooper and Jack Reed write to the CFTC opposing margin trading on event contracts.

  6. Kalshi's broker affiliate registers first

    Regulatory

    The NFA registers Kinetic Markets LLC as an FCM, giving Kalshi a licensed intermediary before any rival.

Scenarios

1

CFTC clears PM Derivatives to trade for customers

Possible Resolves by End of 2027

Discussed by: Reuters, which reported the CFTC step as the remaining gate

The NFA registration gives the firm its regulatory status. A CFTC authorization would let PM Derivatives actually accept orders and hold customer funds, and would open the door to distribution partners that need a regulated broker behind them. Triggers: a CFTC order, exemption or no-action position naming the firm.

2

CFTC amends the rulebook and Polymarket offers margin

Unlikely Resolves by End of 2027

Discussed by: Crowdfund Insider and Tech Times, cited in trade coverage of the FCM filings

Broker registration is necessary but not sufficient for leveraged trading. Polymarket US would also need the CFTC to approve a change to its exchange rulebook allowing positions that are not fully funded at the outset. Senators Hickenlooper and Reed have asked the agency to refuse exactly that for event contracts.

3

PM Derivatives stays registered but inactive

Likely Resolves by End of 2027

Discussed by: NFA registry records, which list the firm as an inactive member

Registration and operation are separate states. The firm can hold its licence, satisfy capital and compliance duties, and still conduct no commodity interest business while the CFTC review and the Polymarket investigation run. This is the current status, extended.

4

CFTC enforcement action stalls the U.S. buildout

Uncertain Resolves by End of 2027

Discussed by: Reuters, which reported the CFTC is investigating the firm

An open investigation into Polymarket's marketing and other practices sits alongside the licensing file. A formal enforcement action would not automatically void the NFA registration, but it would complicate any CFTC sign-off and give distribution partners a reason to wait.

5

Polymarket US opens contracts to traders in blocked states

Possible Resolves by Dec 5, 2026

Discussed by: The CFTC's Division of Market Oversight guidance of November 5, reported by CoinDesk and summarized by DexSheet

The CFTC said federally regulated exchanges generally may not limit access based on where an otherwise eligible US trader is located. Polymarket US must end restrictions that break that rule within 30 days or give the division a reason it cannot. No access has changed yet.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

November 2012

Intrade shut out of the U.S. (2012)

The Commodity Futures Trading Commission sued Intrade, an Irish prediction market with a large American user base, alleging it offered off-exchange options on commodities and violated a 2005 settlement. Intrade blocked U.S. customers rather than fight the case to a conclusion.

Then

American traders lost access to what was then the biggest prediction market in the world.

Now

Intrade ceased operations in 2013. For a decade afterward, no prediction market operated inside U.S. registration.

Why this matters now

Polymarket spent years offshore, the position Intrade died in. The exchange, clearinghouse and broker registrations are the route out of it.

2023-2024

Kalshi v. CFTC (2024)

Kalshi, a CFTC-regulated exchange, sued the agency after it blocked contracts on which party would control Congress. A federal district court ruled for Kalshi in September 2024, and an appeals court declined to block the contracts, letting them trade before the November election.

Then

Election contracts listed on a U.S. exchange weeks before the vote, and rivals moved into the same market.

Now

The case established that event contracts on elections could trade under federal regulation, and Kalshi later added a registered broker affiliate.

Why this matters now

Kalshi's March 2026 FCM registration is the template Polymarket copied in July. The competitive gap between them is now measured in regulatory steps, not users.

Sources

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PR Newswire Reuters / Central Oregon Daily The Block Securities.io Predmart SiaPredict Signal Desk Forbes México Reuters / Investing.com NextPredict Gambling Insider DexSheet Coinlive