FIS Debuts Clearing Solution for Prediction Markets

FIS has debuted a tool to offer 24/7 post-trade clearing for regulated prediction markets.

The FIS CD Prediction Clearing solution, announced by the financial technology company in a news release Tuesday (March 24), comes amid the continuing growth in prediction markets such as Kalshi and Polymarket.

The release quoted Kalshi executive Andy Ross, who argued that to sustain this growth, “the infrastructure underpinning these markets needs to keep pace, and having the right post-trade foundation in place is critical to unlocking the next wave of participation.”

FIS said its tool helps deliver the infrastructure to sustain needed momentum by replacing “fragmented, batch-processes” with real-time clearing, high-volume transaction processing and round-the-clock support.

“Prediction markets are demanding real-time clearing, high-volume transaction processing and round-the-clock availability, all of which are capabilities that legacy systems were never designed to deliver at scale,” said Andrés Choussy, head of capital markets at FIS.

To deal with these challenges, the new clearing tool gives existing and new futures commission merchants entering these markets “the technology to handle millions of transactions a day with real-time risk updates,” Choussy added.

The new offering comes as prediction markets are making changes to address pressures from regulators and lawmakers at the state and federal level.

For example, Kalshi announced Monday (March 23) that it had established protections to prevent politicians, athletes and other relevant people from trading in certain politics and sports markets on its platform.

The company said these capabilities are designed to prevent insider trading and market manipulation, have been in the works for months, and address Commodity Futures Trading Commission (CFTC) guidance and proposed federal legislation to prevent insider trading.

“All markets have bad actors, and we believe that staying ahead of bad actors means developing new technology and policies,” Kalshi said in a blog post.

Polymarket made a similar move Monday, updating its rules to prevent trades by people who have confidential information about the outcome or likely outcome of the event in question.

Users are also prohibited from trading on confidential information shared by “someone who owed a preexisting duty of trust or confidence to someone else,” if they know the person who shared the information would be barred from trading on it themselves, the rules say.

“Markets thrive on clarity,” Neal Kumar, chief legal officer of Polymarket, said in the release. “These rule enhancements make our expectations abundantly clear for every participant across both platforms and highlight the compliance infrastructure we have already built.