CFTC proposes conflict rules for venues that own their market makers
A principles-based rewrite of Parts 37, 38 and 39 would police affiliations between exchanges, clearers and trading firms—the integrated structure crypto platforms made standard in derivatives markets.
What happened
The CFTC issued a notice of proposed rulemaking on 30 July, release 9274-26, seeking comment on amendments to Parts 37, 38 and 39 of its regulations and to Regulations 1.52 and 1.55. The proposal addresses conflicts of interest arising from affiliations among designated contract markets, swap execution facilities, derivatives clearing organisations and futures commission merchants. FinanceFeeds reports the rules would restrict affiliated traders' access to non-public exchange data, bar preferential fee treatment, require separation of personnel and technology between trading and exchange operations, and permit market-maker affiliations while prohibiting proprietary trading arms on the same platform. Chairman Michael S. Selig said the proposal would institute 'purpose-fit rules of the road that bolster market integrity'. Comments run for 60 days from Federal Register publication.
Why it matters
Vertical integration is the native structure of crypto venues: exchange, clearer, broker and market maker inside one group, a model the agency is now writing into registered derivatives markets rather than prohibiting. FinanceFeeds names Coinbase, Kraken and Polymarket among the integrated platforms the proposal would reach. How affiliated liquidity is disciplined—who sees the order flow, who pays which fees—shapes whether internalised market making is a subsidy to the venue or to its customers, and the proposal arrives as the CLARITY Act would formalise the CFTC's share of digital asset oversight.
What is not settled
The proposal is not yet published in the Federal Register, so the comment clock has not started. Whether the prohibition on same-platform proprietary trading survives comment is open, and the press release records no dissenting statements, so commissioner positions have yet to surface.
Institutions in this story
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Commodity Futures Trading Commission
Regulator
Proposed amendments to Parts 37, 38 and 39 on 30 July 2026 addressing conflicts of interest where designated contract markets, swap execution facilities, clearing organisations and futures commission merchants sit inside one group, with comments running 60 days from Federal Register publication.
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Coinbase Global, Inc.
Exchange
Named in the reporting among the integrated platforms the proposal would reach, holding exchange, brokerage and custody inside one group, which is the structure the rules would police rather than prohibit.
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Polymarket
Exchange
Also named among the affected venues, and the proposal reaches it from the same direction the New York suit reaches Kalshi: who governs an event-contract venue, and on what terms its affiliated liquidity may trade.
On the record
CFTC proposes conflict-of-interest rules for affiliated venue structures
The CFTC issued a notice of proposed rulemaking on 30 July 2026 seeking comment on amendments to Parts 37, 38 and 39 of its regulations and to Regulations 1.52 and 1.55, addressing conflicts of interest that arise where designated contract markets, swap execution facilities, derivatives clearing organisations and futures commission merchants are affiliated. Reporting describes restrictions on affiliated traders' access to non-public exchange data, a bar on preferential fee treatment, separation of personnel and technology, and a prohibition on proprietary trading arms operating on the same platform. Comments run for 60 days from Federal Register publication.