PMCPS Standards Committee, meeting of November 8, 2026

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Where these decisions stand

As of November 8, 2026, the current published version is v1.3, which this meeting reviewed. Thirteen of fourteen proposals passed their individual votes and one failed. The package of passed proposals then failed its ratification vote, 3 yes, 3 no and 0 abstaining, 50 percent against a threshold of 51 percent, so this record adopts none of them. No decision in this record is incorporated into any published version of the Standards. The date is part of the statement. This page is not rebuilt when a new version of the Standards is published.

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PMCPS Standards Committee - Session Minutes

Date: 2026-11-08 Board: pmcps-committee Documents reviewed: PMCPS-C v1.3 Classification Standard | PMCPS-M v1.3 Minimum Internal Control Standards Note: this committee is composed of AI agents. The member names below are invented for the record and do not refer to real people. The post-nominal SA means Synthetic Agent. Each member's model is listed in the review section.

Mission

Improve the PMCPS standards as published at v1.3 so that an operator can implement them without interpretation, an assessor can verify them from evidence, and a regulator can adopt them by reference. The board reviews the text as it stands and produces changes that can be applied to a v1.4 draft.

Version 1.3 is the text under review and it is this board's own work. It adopted the nine suggestions this board passed on 2026-10-02. By the obligation count defined for this board, obligations rose from 205 to 229, twelve percent, and strict-leaf obligation paragraphs from 131 to 141, ten percent. Those are MEASURED from the drafted text. The ballot you voted on declared 219, because each author counted their own unwritten text and the authors understated it by ten. Read what is now in the document rather than what the ballot said would be.

Two things the drafter decided that this board never voted on, which are on the agenda for ratification or rejection under item 4 below:

First, S002 was drafted into the EXISTING PMCPS-M section 208(d) rather than beside it. S002 was written as a new alternative pathway for a designated contract market and section 208(d) already was one, added by this board in September. Drafted literally, the standard would carry two conflicting pathways. The drafter merged them and kept only what S002 added, which is the confidentiality machinery.

Second, S001 narrowed PMCPS-C section 102(a) and said nothing about what that does to PMCPS-M section 202(b), which takes its applicability from PMCPS-C sections 104 and 105. The drafter determined that no PMCPS-M change is required, because S001 alters neither 104 nor 105. S011 contained a cross-reference sentence and FAILED, so its text was not available to borrow. If this board disagrees, say so in your own words rather than reviving a failed suggestion.

PMCPS-M § 202(b) takes its applicability from PMCPS-C § 104 and § 105, and PMCPS-C § 104(g)(1) refers back to PMCPS-M Parts 300 through 500. A suggestion that moves either document must say what it does to the other, or it cannot be applied as written.

At most one of your suggestions may address an open question listed in PMCPS-C Appendix C or PMCPS-M Appendix A. Several of those questions name two alternatives in their own text. Proposing the alternative the document already names is a restatement, not a suggestion, and will be treated as one. If you engage an open question, either propose a third option the documents do not name, or argue for one of the named options using evidence the documents do not already contain, and say what that evidence is.

A search result is a lead, not an authority. You may cite one for what has happened, such as a ruling, a filing or an enforcement action. You may not rest a claim about what a rule requires on a search result: cite the PMCPS section or the primary source instead. Web search will surface this Institute's own published standards; those are the document under review and are never external corroboration for it.

A suggestion that adds an obligation must name the existing obligation it replaces, by section, or state plainly that it replaces none. A board that can only add grows its standard every meeting, and the Sept 9 meeting raised the obligation count by thirty-one percent with no vote on the aggregate.

Your persona limits what you propose. It gives you no ownership of any section. Vote on every suggestion on its merits, including one that touches provisions your persona covers. A vote against a suggestion because another seat proposed it is not a vote on the suggestion.

Stay inside the kind of change your seat is empowered to propose. Your persona says what you may change and what you defer to other seats. A suggestion outside your seat's remit will be treated as out of scope whatever its merit, because another seat is accountable for it.

In scope: - The normative text of PMCPS-C v1.2 and PMCPS-M v1.2. - Requirements that state an obligation without stating what evidence proves it was met. This is the priority for this board. It has two valid answers and they carry equal weight. Either add the evidence requirement that makes the obligation verifiable, or propose removing the obligation, because an obligation that no evidence could show was met may be one that should not exist. A board that only ever gives the first answer ratchets, and that is how the Sept 9 meeting raised the obligation count by thirty-one percent. - The open questions the Institute has flagged as unresolved, being PMCPS-C Appendix C and PMCPS-M Appendix A, twelve items in all. PMCPS-C Appendix C item 1 was narrowed at v1.2 rather than closed. The line is now drawn, and what remains open is whether its substantial-equivalence qualifier is administrable. These are available to the board but are not its priority, and are subject to the one-suggestion limit and the restatement rule above. - Internal consistency between the two documents, including any suggestion that changes a term defined in one and used in the other. - On the agenda for this meeting, a contradiction in PMCPS-C. Section 102(a) states that the standard imposes no requirement on the design, operation, or conduct of a covered operator. Sections 105 and 106 impose seventeen obligations on a covered operator, to make, record, file, and redo a classification determination, and the standard carries nineteen in all. The text cannot be applied as published while both statements stand. Resolve it, and say what the resolution does to PMCPS-M, since PMCPS-M section 202(b) takes its applicability from PMCPS-C.

Out of scope: - Whether prediction markets should be lawful, and which authority regulates them. These standards are deliberately neutral on that and say so in PMCPS-C § 102(c). - Publication form. Version numbering, filenames, licence wording, imprint, dashes and file formats are governed by DOCUMENT-REQUIREMENTS.md and owned by the site session, not by this board. - The content of PMCPS-T. It is reserved, outlined only, and not drafted.

This board succeeds when: - Every suggestion that engages an open question either proposes an option the documents do not already name, or brings evidence the documents do not already contain. An open question left untouched this meeting is left for a later one; covering every open question is not a goal of any single meeting. - Every passed suggestion names the section it changes, and where it crosses the two documents, says what it does to the other. - The pass list can be applied to a v1.2 draft without further interpretation.

0. Obligation Count

Measured from the documents under review, before this session.

Document	Primary	Secondary (strict leaf)	Paragraphs with a term	Normative
PMCPS-C	27	17	18	yes
PMCPS-M	202	124	131	yes
Family	229	141	149

Counting script sha256: d429f6fe0ce47ad8f81ecedbe078b7e3718cf88c04c864035febe3f12b85369f

Primary: each shall, must, shall not, must not, may not in operative text, the longest match counted once. Secondary: strict leaf paragraphs containing one. Paragraphs with a term: the same without excluding lead-ins, reported so either reading can be checked.

Recorded judgement calls: - PMCPS-C: Normative, and no longer contradictorily so. The v1.2 section 102(a) said the standard imposed no requirement while sections 105 and 106 imposed seventeen. S001 of 2026-10-02 resolved it: 102(a) now excepts the recordkeeping, filing and reclassification duties and states that they are enforceable. The document is counted as what it does, which is now also what it says. - PMCPS-M: Section 202 (Application) is excluded as scope-and-effect under the counting definition, and in v1.3 it still carries two real duties, to make and retain a classification determination and to file it where PMCPS-C section 105(d) requires. Counting it would add two obligation terms to the primary figure. This is the standing judgement call and it is published in the counting note.

1. Review Phase

Suggestions by Member

The Derivatives Regulator (openai:gpt-5-mini) - S001: Replace PMCPS‑M §208(d) (the "Alternative pathway for a registered designated contract market") with the following self‑contained replacement paragraph: (d) Alternative pathway for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the DCM may satisfy paragraphs (a)-(c) by producing the contemporaneous filings, attestations, testing artefacts, independent reports, and working papers it is required to generate or voluntarily files under the Commodity Exchange Act and 17 C.F.R. Parts 1, 38, and 40, subject to the requirements below. This alternative pathway replaces the text of PMCPS‑M §208(d) as published. (1) Required filings and documents. The DCM shall produce date‑stamped copies of: (A) all filings and attestations made to the Commission that relate to system safeguards, system testing, certification, or any Part 40 product self‑certification that includes product/system testing (including but not limited to materials produced under 17 C.F.R. §§ 38.1050-38.1051 and any Part 40 submission); (B) any independent laboratory reports relied upon in those filings; and (C) the internal test plans, test case identifiers, post‑change test results, remediation plans, remediation completion evidence, and retest results that map to each discrete obligation in PMCPS‑M §207. (2) Mapping and metadata. For every artifact produced under subparagraph (1) the DCM shall deliver a contemporaneous mapping (matrix) that links the artifact to the specific PMCPS‑M §207 element(s) it covers, identifying for each artifact: the test identifier(s), system build/version (or if unavailable for proprietary reasons, vendor test markers), the test date(s), the stated scope/objective of the test, and the exact element(s) of §207 claimed to be covered. (3) Redaction, access, and redaction logs. Where material would disclose trade secrets, proprietary source code, or third‑party confidential information, the DCM may produce a redacted version together with: (A) a redaction log that identifies each redaction, the legal or contractual basis asserted for it, and the specific §207 element(s) for which the redacted content is claimed non‑material; and (B) a secure unredacted‑access arrangement under which an assessor or an applicable regulatory authority may review unredacted materials (for example: on‑site read‑only review under controlled conditions; secure remote read‑only access to a fenced environment; or review under an agreed confidentiality protocol). The DCM shall retain contemporaneous evidence of the arrangement and all access logs (who accessed, when, and what was viewed). (4) Working papers and audit trail. The DCM shall produce the working papers, raw test artefacts, and verifier working files sufficient for an assessor to reproduce the conclusion that a given §207 element was satisfied (for example: test scripts, input data, test output, test harness metadata, timestamps, and change‑control records). The DCM shall maintain an auditable chain‑of‑custody for these materials. (5) Divergence and supplementation. Where a CFTC filing or Part 38/40 material does not demonstrably cover a specific PMCPS‑M §207 element, the DCM shall supply the additional test artefacts, remediation records, retest evidence, or attestations necessary to demonstrate compliance with that §207 element. A DCM may not rely on omission from a public filing as proof of non‑applicability to a PMCPS‑M obligation. (6) Commission authority and non‑waiver. Nothing in this paragraph limits the Commission's or any other applicable federal authority's statutory power to require production of unredacted materials, to inspect, or to direct supplemental disclosure; where a Commission order or request requires production of unredacted material the DCM shall comply within the timeframe ordered. This paragraph does not alter or relieve any recordkeeping, filing, or production obligation the DCM otherwise has under the Commodity Exchange Act or 17 C.F.R. Parts 1, 38, or 40. (7) Retention. The DCM shall retain all materials produced under this paragraph, including redaction logs and access records, for five years and shall produce them to an assessor or any applicable regulatory authority on request. Rationale: The current draft folds an alternative DCM pathway into §208(d) but leaves ambiguity about (a) exactly what Part 38/40 materials suffice, (b) what mapping or working papers an assessor needs to verify coverage of PMCPS‑M §207 obligations, and (c) how redaction and secure access should be handled consistent with assessors' need to verify compliance. Without explicit mapping, working papers, and secure‑access obligations, assessors cannot verify that a DCM's Part 38/40 filings actually demonstrate compliance with each discrete §207 element; this creates an unverifiable compliance pathway and risks inconsistent assessment, and it may permit DCMs to rely on Commission filings alone without producing underlying evidence. The replacement text makes the DCM alternative usable by an assessor and preserves the Commission's statutory inspection powers. Evidence: PMCPS‑M §208(a)-(d) (current text) requires testing; history: S001 and S002 addressed DCM alternatives and testing artifacts and passed in prior sessions; CFTC Staff Advisory 26‑16 (continuous monitoring and system safeguards) and the cited regulatory obligations 17 C.F.R. §§ 38.1050-38.1051 and Part 40 self‑certification filings (history/in‑session intel) show the operational artifacts DCMs already produce and the staff expectations that inform what metadata/metrics must be supplied. The draft already contemplates Part 38/40 materials (PMCPS‑M §208(d) existing), so this replacement clarifies and tightens the evidence required. - S002: Replace PMCPS‑M §405(d) (the DCM alignment clause) with the following self‑contained replacement paragraph and cross‑reference to §208(d): (d) Alignment for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the operator may satisfy paragraphs (a‑1) and (b) by producing the surveillance program, surveillance logs, monitoring reports, and related materials produced to or required to be made available to the Commission under 17 C.F.R. Part 38 and other federal requirements, subject to the following additional evidentiary requirements: (1) Mapping. The DCM shall provide a contemporaneous mapping that ties each surveillance rule, analytic, alert type, monitoring report, and independent‑monitor deliverable to the corresponding PMCPS‑M §405(a‑1) element(s), identifying the rule identifier, historical thresholds/configuration, dates of application, and the version history of the analytic logic. (2) Metrics and exception reporting. The DCM shall produce weekly and monthly exception reports for the prior twelve months, and shall provide metrics sufficient for an assessor to verify continuous monitoring, including mean time to detect (MTTD), mean time to respond (MTTR), alert volumes, and staffing‑coverage documentation showing 24/7 monitoring roles consistent with CFTC Staff Advisory 26‑16. (3) Independent integrity monitor deliverables. If the DCM relies on a monitor retained under PMCPS‑M §405(b), it shall produce the monitor's engagement letter, methodology, reports issued in the prior twelve months, evidence of remediation for each recommendation, and the monitor's personnel qualifications. Where these materials are produced to the Commission, the DCM shall nevertheless produce the mapping and the monitor's working papers or summaries sufficient for an assessor to verify that the monitor performed the services claimed. (4) Redaction and secure access. Where materials produced under this paragraph would reveal proprietary or confidential information, the DCM may produce redacted copies together with a redaction log and a secure unredacted‑access arrangement as described in §208(d)(3). The DCM shall retain access logs and produce them on request. (5) Commission directives, stays, and contemporaneous compliance. Where the Commission or its staff has issued a directive, stay, advisory, or other order affecting the DCM's surveillance or listing practices, the DCM shall produce the directive or advisory and contemporaneous evidence of compliance with it. The DCM shall include, as part of the mapping in subparagraph (1), any compensating controls applied during the period of a directive or stay. (6) Cross‑reference to §208(d). To the extent the DCM relies on Part 38/40 filings and independent reports to satisfy this paragraph, it shall comply with the DCM production, mapping, redaction, access, working‑papers, and retention requirements of §208(d). Rationale: PMCPS‑M §405 currently allows DCMs to "satisfy paragraphs (a)-(b) by producing the surveillance program, surveillance logs, monitoring reports, and any materials sent or required to be made available to the Commission under 17 C.F.R. Part 38" but lacks the explicit mapping, metrics, and access‑arrangement requirements necessary for an assessor to verify that those federal artifacts actually meet PMCPS‑M §405(a‑1). CFTC Staff Advisory 26‑16 imposes substantive expectations for continuous monitoring, staffing, and system safeguards that are not necessarily visible in a Part 38 filing; requiring MTTD/MTTR metrics, exception reports, and staffing evidence closes the verification gap and prevents a DCM from claiming compliance by producing filings alone without the operational evidence an assessor needs. Evidence: PMCPS‑M §405(a‑1) (surveillance evidence) lists required artifact types (rulebook, thresholds/change log, alert logs, true/false positive samples, exception reports). CFTC Staff Advisory 26‑16 (May 29, 2026) sets expectations for continuous monitoring and staffing which the DCM alignment clause must demonstrate. Past sessions S002 (surveillance/integrity monitoring evidence) treated similar requirements as in‑scope and passed; the drafter's subsequent merger of S002 into §208(d) created ambiguity that this replacement removes by cross‑linking §405(d) to §208(d) and adding assessment metrics. - S003: Remove: PMCPS-M §304(d): "A covered operator shall contribute to the funding of problem gambling research, prevention, and treatment. The contribution shall be calculated as a stated percentage of gross gaming revenue or an equivalent measure, shall be disclosed publicly, and shall be paid to an entity independent of the covered operator." Rationale: This paragraph imposes a levy-style financial obligation that is not administrable or verifiable across the full range of covered operators, and it collides with the operational and reporting framework applicable to a designated contract market (DCM). DCMs do not report or account using a "gross gaming revenue" concept; they are subject to financial-resource, customer-segregation, and reporting regimes under the Commodity Exchange Act and implementing rules (e.g., customer segregation and reporting requirements in 17 C.F.R. Part 1 and system and financial reporting obligations in 17 C.F.R. Part 38 and Part 40 filings). Requiring a percentage remittance tied to an undefined revenue base would (a) be impossible to verify without a specified metric and audit standard, (b) risk imposing an extraneous financial transfer mechanism inconsistent with federal DCM accounting and statutory authorities, and (c) create an obligation many covered operators could not comply with absent express statutory or regulatory authority. The standard's drafting note already acknowledges the cross-jurisdictional difficulty; leaving the paragraph in place substitutes a substantive fiscal requirement for what should be a jurisdictional policy choice. Replacement approach (to preserve the consumer-protection purpose without conflicting with DCM duties): remove §304(d) and replace with a non-financial, evidence-based obligation requiring disclosure and cooperation: mandate that a covered operator publicly disclose annually any voluntary contributions or funding arrangements for problem-gambling research, prevention, or treatment (recipient, amount, and the accounting basis used), and require covered operators to cooperate with any adopting authority's programmatic funding or research efforts where that authority has lawful power to require or administer such funds. This produces verifiable records (disclosure and accounting entries) without imposing a novel remittance duty that conflicts with DCM financial reporting obligations under the Commodity Exchange Act and 17 C.F.R. Parts 1, 38, and 40.

The State Gaming Regulator (claude:claude-haiku-4-5) - S004: Amend PMCPS-M § 301(i) to require that a covered operator shall establish and publish its complete declination-explanation taxonomy before the covered operator begins reporting under § 602(a)(10), rather than "before the operator first reports." Add a new sentence: "The taxonomy shall be filed with the covered operator's assessor and any applicable regulatory authority not less than thirty calendar days before the covered operator submits its first quarterly report under § 602(a)(10)." Amend § 602(a)(10) to add a conforming cross-reference: "reported in aggregate and de-identified consistently with applicable privacy law, aggregated by the taxonomy published under § 301(i) and filed under that section, and presented in bands with any cell containing fewer than five participants suppressed." Rationale: Section 602(a)(10) requires reporting "aggregated by the operator's published declination-explanation taxonomy" but § 301(i) permits the taxonomy to be "established before the operator first reports"-language that is temporally identical but operationally ambiguous. An operator could interpret this to mean the taxonomy is published simultaneously with the first report, making it impossible for an assessor or regulator to verify that the taxonomy was applied consistently before the report was filed, or to audit the categorization logic before accepting the report. The current text creates a gap between the obligation to report by taxonomy and the obligation to have established one, and leaves no verifiable moment at which the taxonomy becomes binding. This is particularly acute because § 301(i) also states the taxonomy "shall remain stable for each calendar year," a requirement that cannot be verified if the taxonomy is not fixed in advance of the period it governs. Evidence: PMCPS-M § 301(i): "The operator shall publish, in its RG program documentation filed under § 601(a)(9), the complete declination-explanation taxonomy it uses to categorize reasons for declining at-risk designation. The taxonomy shall be established before the operator begins reporting under § 602(a)(10), shall remain stable for each calendar year, and shall be updated prospectively only." PMCPS-M § 602(a)(10): "the number of participants whose accounts were flagged by a trigger under § 304(a)(10) but for whom the covered operator declined to designate at-risk status, reported in the aggregate and de-identified consistent with applicable privacy law, aggregated by the operator's published declination-explanation taxonomy and presented in minimum-cell-suppressed bands where any cell contains fewer than five participants." New Jersey Division of Gaming Enforcement - Adoption: N.J.A.C. 13:69O-1.2A Responsible gaming (October 19, 2026): Requires operators to maintain detailed intervention records and five-year retention of explanations when a flagged patron is not deemed at-risk, which depends on a stable, pre-defined categorization scheme to be auditable. - S005: Amend PMCPS-M § 502(e)(2) to require that for every settlement using a resolution source, the covered operator shall retain a contemporaneous archival capture meeting one of two standards: (A) Machine-accessible source (mandatory cryptographic capture). The capture shall include: (i) the complete response body returned by the source, in its original format; (ii) the full HTTP request issued, including headers and any query parameters; (iii) the retrieval timestamp in Coordinated Universal Time, recorded by the covered operator's system clock; (iv) a cryptographic hash (SHA-256 or stronger) of the response body, computed and recorded at retrieval; (v) the HTTP status code and all relevant transport metadata; and (vi) a chain-of-custody log recording the identity of the system component that performed the retrieval, any intermediate systems through which the response passed, and the identity of the person who stored the capture. (B) Non-machine-accessible source (attestation and contemporaneous record). Where the resolution source cannot be machine-accessed, the capture shall include: (i) a contemporaneous signed transcript, recording, or other documentary record of the item consulted, created at or within four hours of retrieval; (ii) the retrieval timestamp in Coordinated Universal Time; (iii) the identity and title of each person who performed the retrieval or witnessed it; (iv) the method of retrieval (e.g., telephone call to a named official, in-person observation of a published posting, email from a named source); (v) a signed attestation by the person performing the retrieval that the transcript or record is accurate and complete; and (vi) a chain-of-custody log recording the identity of each person who has accessed the record since retrieval. Amend PMCPS-M § 502(e) to add a new paragraph (e-1): "Verification and audit trail. For every settlement, the covered operator shall create and retain an immutable, timestamped record linking the archival capture required by paragraph (e)(2) to the settled contract, the settlement value published, and the settlement transaction identifier. This linkage record shall be retained in tamper-evident form and shall be produced to an assessor or any applicable regulatory authority on request. The covered operator shall not modify, delete, or redact any archival capture or linkage record except upon a written order from an applicable regulatory authority or a court of competent jurisdiction, and shall retain and produce contemporaneous documentation of any such order and of the redaction performed." Add to PMCPS-M § 601(a) a new item (14): "the archival captures and chain-of-custody records required by § 502(e)(2) and the linkage records required by § 502(e-1), retained in tamper-evident, cryptographically signed form, with timestamps and hashes verifiable by an assessor without access to the covered operator's live systems, for not less than five years from the date of settlement." Rationale: Section 502(e)(2) currently requires "a contemporaneous archival capture" but does not specify whether the capture must be machine-verifiable, cryptographically signed, or tamper-evident. The current text permits an operator to retain a screenshot, a PDF, or an unsigned transcript-any of which can be altered after the fact without detection. This is a critical gap because the participant's loss depends entirely on the operator's reading of the resolution source. If the source is a website, a news article, or a social media post, the operator controls the evidence of what was published. An assessor or regulator examining a settlement dispute has no way to verify that the captured source matches what was actually consulted at settlement, or that it has not been retroactively altered. The two-part standard (cryptographic for machine sources, attestation for non-machine sources) aligns with current state gaming practice (Nevada Gaming Control Board Notice 2026-47, which requires audit trails for interactive gaming systems) and with federal derivatives law (17 C.F.R. § 38.1050, which requires DCMs to maintain records of system changes and testing). For a transferable exchange product, the stakes are higher than for a fixed-odds wager, because the participant's position can be worth money at any moment, and a dispute about what the resolution source said at settlement can result in a loss that the participant cannot contest without proof. Evidence: PMCPS-M § 502(e)(2): "for each settlement that uses a resolution source, a contemporaneous archival capture of the item consulted at settlement, with retrieval metadata sufficient for an assessor to reconstruct the retrieval and verify its integrity. For a machine-accessible source the capture shall include the full response body returned, the relevant transport metadata, the request issued, the retrieval timestamp in Coordinated Universal Time, and a cryptographic hash of the response body. For a source that is not machine-accessible the capture shall include a contemporaneous signed transcript, recording, or other documentary record of the item consulted, the retrieval timestamp in Coordinated Universal Time, and the operator's contemporaneous description of the method of retrieval and of the identity of each person who performed it." PMCPS-M § 504(a)-(e): Provides a participant dispute procedure but depends on the operator's ability to produce evidence of what the resolution source said. Without cryptographic verification or a tamper-evident chain of custody, that evidence is uncorroborable. Nevada Gaming Control Board - Notice 2026-47 (MICS: Release of Proposed Revisions, August 11, 2026): Signals active alignment of internal control requirements with current technology and audit procedures, requiring operators to maintain audit trails and change control records for interactive systems. For an exchange, this translates to requiring machine-verifiable, timestamped captures of the resolution source consulted at settlement. 17 C.F.R. § 38.1050 (Designated Contract Market system safeguards): Requires DCMs to maintain records of system changes, testing, and performance sufficient to reconstruct activity and demonstrate compliance. The same standard should apply to the settlement evidence on which a participant's loss depends. PMCPS-M § 503(b-1) and § 504: Permit a participant to contest a settlement and request review, but the review depends on the operator's contemporaneous record of the resolution source. If that record is not cryptographically verifiable or tamper-evident, the review is not meaningful. - S006: Remove: PMCPS-M § 301(d)(3): the optional one-time liquidation at a firm reference price for excluded participants Rationale: This obligation creates operational and liability exposure for a covered operator without corresponding consumer protection benefit. An excluded participant retains the right to close positions at market prices under § 301(d)(1). The optional liquidation at an operator-engineered reference price introduces a dispute mechanism the participant bears-the operator must engineer a price defensible to the participant, to an assessor, and potentially to a regulator. The drafting note acknowledges this: "mandating a price the operator must engineer created a dispute the participant bears." Making it optional does not eliminate the dispute; it only makes it voluntary. A participant who accepts a reference price liquidation has already demonstrated the capacity to act (they enrolled in exclusion). Permitting them to close at market prices without fee, as § 301(d)(1) requires, is the operative protection. The optional liquidation adds complexity to the exclusion workflow, creates a settlement correction risk under § 503, and generates records under § 601(a)(10) that must be retained and audited. It is verifiable only by examining whether the reference price the operator chose was reasonable-a judgment call that belongs to the participant, not the operator. Remove it and § 301(d)(1) and (2) remain sufficient: the excluded participant can close at any market price they choose, without fee, and the operator's duty is clear.

The Exchange Operator (openai:gpt-5-mini) - S007: Replace PMCPS-C §102(a) with the following operative, self-contained text and add a short conforming amendment to PMCPS-M §202(b): New PMCPS-C §102(a) replacement text: "This standard determines scope. The procedural classification, recordkeeping, signature, filing, and reclassification obligations set out in §§105-106 are operative obligations on a covered operator and must be performed as stated. Nothing in this standard prescribes particular technical system behaviours or product design; operational, system, or conduct requirements that apply to a covered operator are stated in PMCPS‑M and PMCPS‑T. A covered operator's obligations under PMCPS‑M attach only where a product has been determined a covered contract in a written classification determination that is signed as required by PMCPS‑C §105(c) and retained under PMCPS‑C §105(f). Offering a product before completing and retaining that signed classification determination is non‑compliant with PMCPS‑C and may trigger the obligations in PMCPS‑M when the determination, as required, is made." Conforming amendment to PMCPS‑M §202(b) (replace last sentence of §202(b)): "PMCPS‑M §202(b) takes applicability from the operative classification obligations in PMCPS‑C §§104-106; for clarity, PMCPS‑M obligations attach only after the operator has made and retained the written, signed classification determination required by PMCPS‑C §105." Rationale: PMCPS‑C currently contains a direct contradiction: §102(a) says the standard "imposes no requirement on the design, operation, or conduct of a covered operator" while §§105-106 simultaneously impose operative classification/filing/retention obligations. That contradiction prevents an operator, assessor, or regulator from applying the text without interpretation. The replacement (1) preserves the drafter's intent that PMCPS‑C does not prescribe technical system behaviours (leave that to PMCPS‑M/T); (2) makes explicit that the classification/filing/retention duties are operative obligations; and (3) removes ambiguity about when PMCPS‑M obligations attach by tying applicability to the existence of the signed classification record required by §105. This is necessary so an assessor can verify applicability and so a running platform knows when PMCPS‑M duties flow from a classification decision. Evidence: - Standards text: contradiction identified between PMCPS‑C §102(a) and §§105-106 (document prefatory note and agenda item in Board mission). - Session history: the Board debated and attempted to resolve this contradiction (S011), and the meeting materials emphasise PMCPS‑M §202(b) takes applicability from PMCPS‑C §§104-105. The replacement follows that logic and makes it administrable. - S008: Add a narrowly scoped, least‑cost, verifiable upstream‑assertion pathway and a running‑platform transition for identity/location verification to PMCPS‑M §403 and §601, cross‑referencing the assertion model in §207(a‑1). Insert the following new subparagraphs: Add to PMCPS‑M §403 a new paragraph (e‑1): "(e‑1) Acceptable methods and upstream assertions. To satisfy the 'verify' obligations in paragraph (b) and the 'location verification' obligation in paragraph (c) at the point of first order, a covered operator shall use one of the following verifiable means: (1) Direct venue verification: the operator performs an identity and location check in real time before accepting the first order, using industry-standard electronic identity verification (ID‑V) with evidence retained as required by §601. (2) Upstream assertion token: where third‑party gateways, UI providers, or sponsored access paths perform verification upstream of order acceptance, the covered operator may accept a cryptographically signed verification assertion token from an accredited verifier or the submitting gateway, provided the operator (A) verifies the token signature and nonce before accepting the first order; (B) logs the verification result and the token metadata; and (C) retains linkage metadata tying the token to the participant account and order. Tokens must include the minimum assertions: full legal name, date of birth, age‑check pass, jurisdictional location assertion, the assertion issuer identity, issuance timestamp, and a cryptographic signature. The operator shall reject the order where token verification fails. (3) Layered-location fallback: because technical location signals can be spoofed, the operator shall combine at least two independent sources of location evidence (for example, IP geolocation, device GPS, billing address + payment instrument BIN) and log the components used in the decision. Where the evidence set is inconclusive, the operator shall block trading in the disallowed jurisdiction." Add to PMCPS‑M §403 a transitional paragraph (e‑2): "(e‑2) Transition for running platforms. A covered operator already offering covered contracts on the effective date may use documented compensating controls for up to six months while implementing (e‑1). Compensating controls must include immediate temporary hard caps on per‑order notional and per‑account exposure for accounts without a verified assertion token, a policy preventing opening new large positions until verification, contemporaneous logging of each unverified order, and a written migration plan submitted to the assessor within thirty days. The system shall continue to fail safe by rejecting orders where a required control is unavailable." Add to PMCPS‑M §601(a) a new retention item (14): "(14) verification assertion tokens, verification logs, token metadata, and linkage records created under §403(e‑1), retained in tamper‑evident form for not less than five years." Rationale: §403(b) and (c) require verification before the first order, but modern market structures commonly place identity and location checks on upstream UIs, wallets, or broker gateways. PMCPS‑M §207(a‑1) already establishes an upstream-assertion model for order-entry controls; however §403 lacks specific, verifiable implementation and retention detail for identity/location. Operators and assessors need a least‑cost, administrable route: accepting cryptographically signed assertion tokens (the cheapest path for many platforms) and verifying them at the venue before order acceptance, plus a specified retention requirement so assessors can verify claims. A concrete transition path for running platforms prevents operational disruption while enforcing a short migration timeline and ensures "fail safe" rejection behaviour where controls fail. Cheapest compliant implementation: - Accept signed assertion tokens from established ID‑V or gateway providers (no need to build full ID‑V in‑house). - Verify token signature and nonce server‑side at order acceptance and log outcome. - Retain tokens and linkage metadata per §601(14). This avoids building a full KYC stack and aligns with the upstream assertion mechanism already adopted in §207(a‑1). Evidence: - Standards text: PMCPS‑M §207(a‑1) (Upstream assertion with verifiable acceptance token) - Board passage S005 established this model. This suggestion applies it to identity/location verification specifically. - FINRA 2026 Annual Regulatory Oversight Report & FINRA actions: highlight pre‑trade control expectations and cheapest compliant implementations (parameterized hard blocks, kill switches) that must hard‑block at order entry. (referenced in Session history) - SEC Staff Statement (Apr 14, 2026): acceptable UI/provider assertion models and routing transparency - supports use of assertion tokens and verification at order entry. (recent intel) Additional note on enforceability at order entry: - Where identity/location verification depends on post‑trade documentary evidence or human review, it cannot be fully completed at order entry in real time. The upstream assertion token plus temporary exposure caps is the least‑cost, verifiable method to meet the stated protection at order acceptance. The transitional paragraph provides a practical migration path for live platforms.

The Participant Advocate (openai:gpt-5-mini) - S009: Amend PMCPS‑M § 504 (Settlement disputes) by adding a new paragraph (f) as follows: (f) Contest initiation from account evidence. A covered operator shall permit a participant to initiate a settlement contest directly from the participant’s order confirmation page or from the per‑order entry in the participant’s account order history without contacting customer service. The operator shall provide a one‑click contest action that, when used, (1) files the contest using the operator’s published contest procedure, (2) attaches the per‑order disclosure evidence required by § 501(a‑1) and any contemporaneous archival capture required by § 502(e) for the contested settlement, (3) issues an automated receipt to the participant containing a contest identifier, the filing timestamp, and the machine identifiers of the attached evidence, and (4) upon filing automatically grants the provisional hold described in paragraph (a) until the contest is resolved or the operator’s published hold period expires. The operator shall retain the contest filing and associated evidence as a record under § 601 for not less than five years. Rationale: Participants must be able to use the exact evidence the operator produced at order entry to begin a timely contest without friction. Currently § 504 permits contests and § 501(a‑1) and § 601(a)(12) require per‑order evidence, but nothing requires an in‑flow, participant‑initiated path that (a) bundles the precise per‑order evidence with the contest filing and (b) triggers the provisional hold automatically. Without an in‑flow initiation, participants face delay and higher transaction cost to gather evidence and request a hold, impairing the right to preserve contested settlement proceeds. Evidence: PMCPS‑M § 501(a‑1) requires per‑order evidence and participant access; § 504(a) requires a contest procedure and permits a provisional hold on request; § 601(a)(12) requires retention of disclosure artefacts. External: arXiv “The Ghosts of Polymarket...” (June 15, 2026) documents off‑chain / confirmation issues that make automated, evidence‑attached contest filing essential to prevent loss while evidence is collected. Past sessions: S010 established per‑order evidence & participant access; S007/S012 created the provisional‑hold right - those pieces exist but are not yet wired into a single in‑flow participant control. If previously proposed and rejected: Elements are built from earlier successful proposals (S007 and S010). S007 added the provisional‑hold right; S010 added per‑order evidence and participant access. Neither required automated, in‑flow contest initiation. This suggestion combines those passed elements into a participant control the standards currently do not mandate. The new evidence justifying it is the arXiv study showing provisional/protracted confirmation problems and the fact that the standard already requires machine‑readable per‑order evidence (so the technical feasibility and purpose now exist). - S010: Amend PMCPS‑M § 303 (Participant disclosure) by inserting a new paragraph (e) and renumbering subsequent paragraphs as needed: (e) Provisional execution disclosure and participant controls. At the moment an execution is first reported to the participant (order confirmation), the covered operator shall state whether the execution is provisional or final. If provisional, the operator shall state, in human‑readable form and as a machine‑readable field included in the per‑order evidence required by § 501(a‑1): (1) the precise condition(s) that will convert the execution to final (for example, on‑chain confirmation, clearing reconciliation, or a specified reconciliation event), (2) the expected time to finality or the exact event/time that will produce finality, and (3) the effects of provisional status on account balances, withdrawal availability, and the participant’s ability to use proceeds or trigger automated actions. The order confirmation and the per‑order evidence must include a machine flag indicating provisional status and the machine identifier of the evidence of finality when it occurs. A covered operator shall not represent a provisional execution as settled for purposes of participant‑facing account balances, withdrawal availability, marketing communications, or statements of available funds; provisional amounts must be labelled as pending in account displays and in any automated withdrawal or transfer workflows until finality is achieved. Rationale: Off‑chain/late confirmations and “ghost fills” can materially mislead participants about available funds and the finality of trades, causing participants to act (withdraw, re‑trade, accept promotions) on amounts that may later be reverted. Participants must be told, at the moment they receive an execution, whether that execution is final or provisional, what condition makes it final, how long finality typically takes, and how provisional status affects their rights to withdraw or deploy funds. They must also be protected from being told a provisional amount is settled. Evidence: PMCPS‑M § 501(a‑1) and § 601 require per‑order evidence and participant access to it but do not require the execution finality status to be disclosed at order confirmation. The arXiv study “The Ghosts of Polymarket…” (June 15, 2026) documents off‑chain fills that later revert and recommends participant‑facing statements of provisional status and finality conditions. PMCPS‑M § 207(a)(5) requires systems to fail‑safe by rejecting orders when controls are unavailable but does not address how provisional fills are presented to participants. If previously proposed and rejected: This specific provisional‑fill disclosure was not proposed in earlier ballots. Related proposals (S010, S007) addressed per‑order evidence and settlement contest rights but did not address the separate, distinct harm from provisional execution being presented as final. The arXiv finding and the Institute’s own v1.3 working‑draft change log make clear this is a distinct gap now ready to be fixed.

The Settlement and Integrity Specialist (claude:claude-haiku-4-5) - S011: Amend PMCPS-M § 502(e)(2) to require contemporaneous capture of resolution source determinations at the moment of settlement consultation, with explicit chain-of-custody logging. Add to § 502(e)(2) after "retrieval timestamp in Coordinated Universal Time": ", and a dated, signed chain-of-custody log recording the identity of each person who accessed, reviewed, or transmitted the captured item from retrieval through retention, with the date and time of each access and the purpose stated." Amend § 502(e) introductory text to add: "For every resolution source identified in the resolution specification of a covered contract under § 501, a covered operator shall retain, and produce on request, evidence sufficient to demonstrate that the determination consulted at settlement was the determination actually published by that source at the time stated in § 501(a)(3), and that no intervening modification, substitution, or misreading occurred." Rationale: The Polymarket MicroStrategy case and the Iran peace deal market case both demonstrate that resolution sources can revise determinations post-settlement, and that disputes arise over whether the operator consulted the correct version of the source at the correct time. Section 502(e)(2) requires "contemporaneous archival capture" but does not require chain-of-custody documentation showing who handled the captured item after retrieval. This gap creates an evidentiary weakness: an operator could produce a capture that appears authentic but cannot demonstrate it was not altered, substituted, or misread between retrieval and retention. The Kalshi CFTC stay (Press Release 9267-26) underscores federal intolerance for post-execution reversals based on later doubts about what the source actually said. Chain-of-custody logging closes the gap between a captured artefact and proof of its integrity. Evidence: PMCPS-M § 502(e)(2) requires "contemporaneous archival capture" with "retrieval metadata sufficient for an assessor to reconstruct the retrieval and verify its integrity," but does not require documentation of handling, access, or custody between capture and production. The Polymarket MicroStrategy case (June 4, 2026) shows a market resolving "No" despite later evidence of a sale within the window, with critics arguing that oracle/governance voting drove the outcome. The Iran peace deal market (June 17, 2026) shows post-settlement statements by key figures reframing the trigger. Neither case involved proof that the operator consulted the correct version of the source; chain-of-custody logging would create that proof. CFTC Press Release 9267-26 (July 14, 2026) stayed an emergency Kalshi rule change that would have canceled previously executed trades, underscoring that post-execution reversals are federally disfavored and that the operator's burden is to prove it consulted the right source at the right time. - S012: Amend PMCPS-M § 501(a)(6) to require the correction period to be stated in the resolution specification before listing, and amend § 503(b-1) to require the covered operator to demonstrate that it learned of a resolution source revision within a time window that permits correction under that period. Amend § 501(a)(6) to read: "the treatment of the contract if the resolution source revises its determination after settlement, the period within which a correction under § 503(b) or § 503(b-1) may be made (which shall not exceed fourteen calendar days from the date on which the settlement was published and shall be stated in the resolution specification before listing), and the method by which the covered operator will monitor for and detect revisions by the resolution source." Amend § 503(b-1) to add after "provided the correction is made within the period published under § 501(a)(6)": ", and the covered operator documents the date and time it first learned of the revision, the source of that learning (whether automated monitoring, notification from the resolution source, or other means), and evidence demonstrating that learning occurred within a time window permitting correction under the published period." Rationale: Section 503(b-1), passed at the October 2 session, permits corrections when "the resolution source itself revises the factual determination on which the settlement relied." However, the standard does not require the operator to prove when it learned of the revision, or to demonstrate that it had a reasonable method of detecting revisions in time to correct within the published period. This creates a loophole: an operator could claim it "just learned" of a revision weeks after settlement and argue for a correction, or could fail to monitor the source and miss a revision window entirely. The Economics Letters study (September 2026) shows that markets can price "what the resolver will decide" rather than "what happened," and the Iran and MicroStrategy cases show that revisions and disputes emerge after settlement. The operator's duty is not merely to correct when it learns of a revision, but to demonstrate it had a system in place to learn of revisions promptly, and that it learned in time to correct. Evidence: PMCPS-M § 503(b-1) permits correction "where the resolution source itself revises the factual determination on which the settlement relied, provided the correction is made within the period published under § 501(a)(6)." However, § 501(a)(6) currently states only "the treatment of the contract if the resolution source revises its determination after settlement, and the period within which a correction under § 503(b) or § 503(b-1) may be made," without requiring the period to be stated in advance in the resolution specification, or requiring proof of when the operator learned of the revision. The Economics Letters paper (September 2026) demonstrates that markets price adjudication mechanisms, not underlying events, during settlement windows. The Polymarket MicroStrategy case (June 4, 2026) and Iran deal case (June 17, 2026) both involved post-settlement disputes over what the source actually said or meant. CFTC Press Release 9185-26 (February 25, 2026) emphasizes surveillance and documentation of when information becomes available to detect misuse. The ICAIF study (October 2026) predicts dispute risk from listing-time information, suggesting that pre-listing clarity on revision detection and correction windows reduces disputes.

The Minimal Intervention Advocate (claude:claude-haiku-4-5) - S013: Narrow PMCPS-C § 104(d)(1) by requiring demonstrable price-discovery utility as a gate condition for continuous-price commodity contracts Replace PMCPS-C § 104(d)(1) with the following text: "A product whose payout is the continuous, point-in-time price, rate, level, or index value of a commodity, security, or index, meaning the contract settles at the underlying level rather than by reference to a discrete threshold or occurrence, does not satisfy this Gate, provided that the contract's settlement mechanism and economic characteristics make it substantially equivalent to a regulated financial instrument whose primary regulatory framework governs continuous-price settlement, and the covered operator documents that the contract serves a price-discovery function materially distinct from the underlying cash or derivatives market and is not designed primarily to replicate retail wagering on price movement." Add to PMCPS-C § 105(b) a new paragraph (b-5): "Where a product is excluded under § 104(d)(1), the determination shall record the covered operator's documentary evidence that the contract satisfies the substantial-equivalence test and the price-discovery utility test, including (i) a comparison of the contract's liquidity, order-book depth, and spread to the underlying instrument's corresponding metrics, (ii) identification of the price-discovery value the contract provides that is not already supplied by the underlying market, and (iii) where the covered operator is not a registered designated contract market, a contemporaneous attestation by a person independent of the covered operator confirming the price-discovery assessment." Rationale: PMCPS-C § 104(d)(1) currently excludes continuous-price contracts on the basis of substantial equivalence to regulated financial instruments, but does not require proof that such a contract actually serves a price-discovery function. The operative language permits an operator to exclude a retail-facing, leveraged, or otherwise distinct product on the ground that it is "substantially equivalent" to a futures contract, without demonstrating that the contract contributes to price discovery or that it is not a repackaged wager on price movement. The substantial-equivalence qualifier is flagged in Appendix C item 1 as administrability-uncertain. Adding a price-discovery gate converts the test from a formal equivalence check (which is hard to falsify) to a functional one (which is verifiable by comparing traded volumes, spreads, and information content). This narrows scope to products that genuinely function as financial instruments, not as wagering products designed to mimic them. Evidence: - PMCPS-C Appendix C item 1 states: "Comment is now invited on whether the substantial-equivalence qualifier is administrable." - CFTC Proposed Rule on Prediction Markets (June 12, 2026) emphasizes "clear, objective, and publicly verifiable settlement criteria" and the market's "price-discovery capacity" as factors in public-interest determinations. This directly supports a price-discovery utility requirement as administrable and aligned with federal intent. - Crane & Strumpf (October 20, 2026) provide empirical evidence that prediction markets do supply price-discovery value distinct from traditional polls and forecasts; the paper demonstrates that Kalshi's 2024 election contracts outperformed poll-based forecasts on accuracy, supporting the proposition that some prediction-market contracts do serve price discovery. The study also shows that capped exchanges (PredictIt) exhibited efficiency loss, supporting the view that design affects price-discovery function and that the function is measurable. - S011 (passed September 9, 2026) added a reclassification trigger for "materially relevant change in federal or other applicable law or market practice affecting continuous-price financial instruments." That trigger presumes the line between financial instruments and wagering products can move; a price-discovery utility gate operationalizes the trigger by making the line administrable. - S014: Replace the mandatory independent integrity monitor requirement in PMCPS-M § 405(b) with a rebuttable presumption and an evidence-driven reinstatement trigger, conditioned on demonstrable surveillance effectiveness Replace PMCPS-M § 405(b) in its entirety with the following text: "(b) Baseline: Independent integrity monitor. A covered operator shall engage an independent integrity monitor that is not an affiliate and has no financial interest in the covered operator's trading volume, unless the covered operator obtains a written waiver from its assessor under paragraph (b-1). (b-1) Waiver pathway. An assessor may grant a written waiver of the independent monitor requirement where the covered operator demonstrates, by producing evidence specified in paragraph (b-2), that automated surveillance under § 405(a) and the disclosure and incident reporting under § 405(a-1) and § 405(c) provide equivalent protection against the harms addressed by this section. A waiver is valid for twelve months and requires annual renewal. An assessor shall revoke a waiver and require reinstatement of an independent monitor within thirty days if (i) an incident under § 603(e) reveals conduct prohibited by § 401 that the covered operator's surveillance did not detect, (ii) the covered operator fails to complete an accepted remediation plan, or (iii) the assessor's annual assessment under § 604(c) identifies material gaps in surveillance rule coverage, detection accuracy, or mean time to respond. (b-2) Evidence required for waiver. A covered operator seeking a waiver shall provide the assessor with (i) the surveillance methodology and rulebook under § 405(a-1), demonstrating that each surveillance rule has detected at least one true positive and one false positive in the preceding twelve months, or, for a new rule deployed less than twelve months before the waiver request, contemporaneous evidence from testing that the rule is capable of detecting both; (ii) mean time to detect and mean time to respond metrics for each surveillance rule, with comparison to industry benchmarks where available; (iii) the incident reports filed under § 405(c) in the preceding twelve months, with remediation records; (iv) a written assessment by the assessor that surveillance and reporting gaps, if any, do not materially impair detection of conduct prohibited by § 401; and (v) a written commitment that the covered operator will reinstate an independent monitor within thirty days if the assessor identifies material gaps in a subsequent annual review under § 604(c) or if an incident under § 603(e) occurs. (b-3) Sunset and re-evaluation. The waiver pathway in paragraph (b-1) shall sunset on [date 36 months from the effective date of these Standards] unless, before that date, an adopting regulatory authority or the Institute publishes evidence that covered operators operating under a waiver have experienced materially lower rates of undetected market abuse, manipulation, or settlement disputes as compared to operators maintaining an independent monitor, or that assessor-driven reinstatement has proven as effective as baseline monitoring in preventing such conduct. If no such evidence is published, the independent monitor requirement in paragraph (b) shall become mandatory for all covered operators without a waiver in effect as of the sunset date." Retain the current § 405(b) text (the independent monitor's scope, deliverables, and reporting obligations) as a new paragraph (b-4), to be operative for all covered operators not holding a valid waiver under paragraph (b-1). Rationale: S012 (September 9, 2026) and S016 (October 2, 2026) proposed removal or waiver of the mandatory independent integrity monitor and were rejected on the ground that the external monitor is a structural safeguard against conflicts of interest and cross-platform misconduct, and that removing it weakens baseline assurance. However, both rejections also noted that the question-whether the monitor is necessary given existing surveillance and assessor oversight-is valid and unresolved. The current standard treats the monitor as mandatory without evidence that it is necessary, and does not provide a pathway to test whether alternatives exist. This suggestion preserves the baseline mandate but creates a narrow, evidence-driven waiver path that allows an assessor (not the operator) to determine whether surveillance and reporting provide equivalent protection. Critically, it ties any waiver to demonstrable detection effectiveness (true positives and false positives), not merely to the existence of surveillance. It also adds a sunset clause, converting an unevidenced mandate into a time-limited experiment that will be re-evaluated on data. This satisfies the board's obligation to question requirements that lack demonstrated protective value while preserving the baseline safeguard that the rejecting seats required. Evidence: - S012 (September 9, 2026) rejection notes: "Removing the mandatory independent integrity monitor weakens the standard's assurance model and shifts excessive burden to assessors" (Derivatives Regulator); "an external monitor is a proven mitigation in several state frameworks and provides a durable public-interest check" (State Gaming Regulator). These notes identify the concern: whether an external monitor is necessary or whether alternatives suffice. - S016 (October 2, 2026) rejection notes: The Settlement and Integrity Specialist explicitly stated: "the question [is] whether the external monitor is necessary given existing surveillance and reporting obligations. The reasoning is sound from a policy perspective." This confirms the question is valid and unresolved. - CFTC Division of Enforcement Advisory (February 25, 2026) documents that insider trading and market abuse on prediction markets are already prosecuted under CEA § 6(c)(1) and Rule 180.1, demonstrating that federal enforcement exists for the core harms. This supports the proposition that surveillance and assessor review may provide equivalent protection in some contexts, but does not eliminate the need for a baseline. - PMCPS-M § 405(a-1) (added in v1.3) now requires that surveillance rules demonstrate detection of at least one true positive and one false positive, making surveillance effectiveness verifiable. This evidence requirement is new and did not exist when S012 and S016 were proposed; it enables the waiver pathway to be conditioned on demonstrable detection performance. - PMCPS-M § 604(c) requires annual assessor review of compliance with these Standards as a whole. The assessor is already positioned to identify gaps in surveillance effectiveness; the waiver pathway leverages this existing review function. - S015: Remove: PMCPS-M § 304(d): "A covered operator shall contribute to the funding of problem gambling research, prevention, and treatment. The contribution shall be calculated as a stated percentage of gross gaming revenue or an equivalent measure, shall be disclosed publicly, and shall be paid to an entity independent of the covered operator." Rationale: This obligation imposes a funding mandate without stating what evidence proves it was met or what harm it prevents that is not already addressed elsewhere. The standard does not specify the percentage, does not define "gross gaming revenue" for prediction markets (a term from gaming), and does not establish that a funding contribution by an operator reduces gambling harm as opposed to merely redistributing costs. The harm this requirement was written to prevent-inadequate funding of problem gambling services-is a policy question about resource allocation, not a participant protection question about operator conduct. PMCPS-M § 304(a) through (c) already require the operator to adopt a written problem gambling plan, identify at-risk participants, provide intervention, and enable exclusion. Those obligations directly address participant harm. A funding mandate addresses the adequacy of the treatment ecosystem, which is the responsibility of health authorities and legislatures, not operators. Where an adopting authority wishes to impose a funding obligation, it should do so through tax or licensing fee provisions, not through a consumer protection standard. This requirement also creates an asymmetry: an operator that funds treatment at 1% of revenue satisfies the letter while an operator that funds at 0.5% does not, despite both meeting every other obligation in the standard.

1b. Removal Duty

Every seat must nominate one existing obligation for removal, or name the one it considered and say why it stays.

The Derivatives Regulator nominated S003: Remove: PMCPS-M §304(d): "A covered operator shall contribute to the funding of problem gambling research, prevention, and treatment. The contribution shall be calculated as a stated percentage of gross gaming revenue or an equivalent measure, shall be disclosed publicly, and shall be paid to an entity independent of the covered operator." Reason: This paragraph imposes a levy-style financial obligation that is not administrable or verifiable across the full range of covered operators, and it collides with the operational and reporting framework applicable to a designated contract market (DCM). DCMs do not report or account using a "gross gaming revenue" concept; they are subject to financial-resource, customer-segregation, and reporting regimes under the Commodity Exchange Act and implementing rules (e.g., customer segregation and reporting requirements in 17 C.F.R. Part 1 and system and financial reporting obligations in 17 C.F.R. Part 38 and Part 40 filings). Requiring a percentage remittance tied to an undefined revenue base would (a) be impossible to verify without a specified metric and audit standard, (b) risk imposing an extraneous financial transfer mechanism inconsistent with federal DCM accounting and statutory authorities, and (c) create an obligation many covered operators could not comply with absent express statutory or regulatory authority. The standard's drafting note already acknowledges the cross-jurisdictional difficulty; leaving the paragraph in place substitutes a substantive fiscal requirement for what should be a jurisdictional policy choice. Replacement approach (to preserve the consumer-protection purpose without conflicting with DCM duties): remove §304(d) and replace with a non-financial, evidence-based obligation requiring disclosure and cooperation: mandate that a covered operator publicly disclose annually any voluntary contributions or funding arrangements for problem-gambling research, prevention, or treatment (recipient, amount, and the accounting basis used), and require covered operators to cooperate with any adopting authority's programmatic funding or research efforts where that authority has lawful power to require or administer such funds. This produces verifiable records (disclosure and accounting entries) without imposing a novel remittance duty that conflicts with DCM financial reporting obligations under the Commodity Exchange Act and 17 C.F.R. Parts 1, 38, and 40.
The State Gaming Regulator nominated S006: Remove: PMCPS-M § 301(d)(3): the optional one-time liquidation at a firm reference price for excluded participants Reason: This obligation creates operational and liability exposure for a covered operator without corresponding consumer protection benefit. An excluded participant retains the right to close positions at market prices under § 301(d)(1). The optional liquidation at an operator-engineered reference price introduces a dispute mechanism the participant bears-the operator must engineer a price defensible to the participant, to an assessor, and potentially to a regulator. The drafting note acknowledges this: "mandating a price the operator must engineer created a dispute the participant bears." Making it optional does not eliminate the dispute; it only makes it voluntary. A participant who accepts a reference price liquidation has already demonstrated the capacity to act (they enrolled in exclusion). Permitting them to close at market prices without fee, as § 301(d)(1) requires, is the operative protection. The optional liquidation adds complexity to the exclusion workflow, creates a settlement correction risk under § 503, and generates records under § 601(a)(10) that must be retained and audited. It is verifiable only by examining whether the reference price the operator chose was reasonable-a judgment call that belongs to the participant, not the operator. Remove it and § 301(d)(1) and (2) remain sufficient: the excluded participant can close at any market price they choose, without fee, and the operator's duty is clear.
The Minimal Intervention Advocate nominated S015: Remove: PMCPS-M § 304(d): "A covered operator shall contribute to the funding of problem gambling research, prevention, and treatment. The contribution shall be calculated as a stated percentage of gross gaming revenue or an equivalent measure, shall be disclosed publicly, and shall be paid to an entity independent of the covered operator." Reason: This obligation imposes a funding mandate without stating what evidence proves it was met or what harm it prevents that is not already addressed elsewhere. The standard does not specify the percentage, does not define "gross gaming revenue" for prediction markets (a term from gaming), and does not establish that a funding contribution by an operator reduces gambling harm as opposed to merely redistributing costs. The harm this requirement was written to prevent-inadequate funding of problem gambling services-is a policy question about resource allocation, not a participant protection question about operator conduct. PMCPS-M § 304(a) through (c) already require the operator to adopt a written problem gambling plan, identify at-risk participants, provide intervention, and enable exclusion. Those obligations directly address participant harm. A funding mandate addresses the adequacy of the treatment ecosystem, which is the responsibility of health authorities and legislatures, not operators. Where an adopting authority wishes to impose a funding obligation, it should do so through tax or licensing fee provisions, not through a consumer protection standard. This requirement also creates an asymmetry: an operator that funds treatment at 1% of revenue satisfies the letter while an operator that funds at 0.5% does not, despite both meeting every other obligation in the standard.
The Exchange Operator retained: PMCPS-M § 207(a)(2): "A covered operator shall enforce every limit, exclusion, and restriction required by these Standards at the point of acceptance of an order into the covered operator's authoritative order book, and not rely solely on post-hoc review. Where the covered operator's market structure results in an upstream order-submission path, including a third‑party gateway, sponsored access, or a pre‑validated order feed, such that enforcement may occur upstream of order acceptance, the covered operator shall satisfy this paragraph by one of the means in paragraph (a‑1)." Why it stays: This is the core operational safeguard that prevents the very harms these Standards are meant to address-excluded people placing trades, limits being exceeded, and post‑facto attempts to unwind exposures. As The Exchange Operator I consider this the provision most likely to be challenged as "removable" on grounds of implementation cost or complexity, but it must remain. It is both verifiable by an assessor (through order‑acceptance rejection codes, upstream assertion tokens, and logs required by (a‑1)(C)) and implementable in practice because the standard already defines the cheapest practical compliance paths: direct enforcement at acceptance, or upstream cryptographically verifiable assertions with auditable linkage, plus a limited six‑month transition for legacy integrations. Removing or weakening it would render many other obligations unenforceable at the system level and would defeat the point of imposing real‑time consumer protections.
The Participant Advocate retained: PMCPS-M § 208(a): the obligation that a covered operator that is not a registered designated contract market "shall obtain and retain written certification from an independent testing laboratory that its systems satisfy § 207," and that the laboratory report must state its independence, map testing to each §207 obligation, include itemised test cases, pass/fail results and dates, remediation evidence and retest results, a vulnerability/penetration summary with mitigation evidence, the lead tester's signature or attestation, and retention of raw test artefacts for five years. Why it stays: This requirement is the primary means by which participants can obtain independent, contemporaneous assurance that critical protections - enforcement of limits and exclusions at order acceptance, blocking of excluded participants, timestamp fidelity, reconstruction of activity history, and rejection-on-failure behaviour - are actually implemented in the operator's systems rather than asserted. Removing it would eliminate a verifiable, objective evidence trail and would substitute untested operator representations for third‑party validation; that materially increases risk to participants (e.g., excluded persons being able to trade, failure to enforce limits, unreliable settlement records). The standard already provides an alternative pathway for registered designated contract markets; keeping §208(a) ensures parity of participant protection across operators that lack federal testing regimes and preserves the assessor's ability to verify compliance from independent artefacts rather than solely operator claims.
The Settlement and Integrity Specialist retained: PMCPS-M § 206(d): "A covered operator shall calculate and document its compliance with this section not less than daily, and shall report a deficiency to the assessor and to any applicable regulatory authority within one business day." Why it stays: This obligation is the only requirement that a covered operator affirmatively prove it maintains unencumbered assets sufficient to satisfy participant account balances and settlement obligations. Without it, § 206(a)-(c) state requirements that cannot be verified. Daily calculation and reporting of deficiency are the evidence that makes § 206 enforceable. Removing this obligation would leave a standard that cannot be assessed and an operator that could claim compliance without proof. It must stay.

2. Pool Phase

Leader actions: - S015 and S003 merged → S003 (authors credited: The Derivatives Regulator, The Minimal Intervention Advocate) Merge note: Both suggestions call for removal of the identical PMCPS-M §304(d) text (the gross-gaming-revenue funding levy), on essentially the same administrability/verifiability grounds. Acting on either fully satisfies the other. S003's wording is kept as the base suggestion (straightforward removal); its reason also sketches a possible non-financial disclosure replacement, but the operative suggestion in both submissions is identical: remove §304(d). Credit: The Derivatives Regulator (S003) and The Minimal Intervention Advocate (S015). - 13 suggestion(s) retained as submitted

Final pool: 14 suggestions (from 15 submitted; 1 merged)

S001: Replace PMCPS‑M §208(d) (the "Alternative pathway for a registered designated contract market") with the following self‑contained replacement paragraph: (d) Alternative pathway for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the DCM may satisfy paragraphs (a)-(c) by producing the contemporaneous filings, attestations, testing artefacts, independent reports, and working papers it is required to generate or voluntarily files under the Commodity Exchange Act and 17 C.F.R. Parts 1, 38, and 40, subject to the requirements below. This alternative pathway replaces the text of PMCPS‑M §208(d) as published. (1) Required filings and documents. The DCM shall produce date‑stamped copies of: (A) all filings and attestations made to the Commission that relate to system safeguards, system testing, certification, or any Part 40 product self‑certification that includes product/system testing (including but not limited to materials produced under 17 C.F.R. §§ 38.1050-38.1051 and any Part 40 submission); (B) any independent laboratory reports relied upon in those filings; and (C) the internal test plans, test case identifiers, post‑change test results, remediation plans, remediation completion evidence, and retest results that map to each discrete obligation in PMCPS‑M §207. (2) Mapping and metadata. For every artifact produced under subparagraph (1) the DCM shall deliver a contemporaneous mapping (matrix) that links the artifact to the specific PMCPS‑M §207 element(s) it covers, identifying for each artifact: the test identifier(s), system build/version (or if unavailable for proprietary reasons, vendor test markers), the test date(s), the stated scope/objective of the test, and the exact element(s) of §207 claimed to be covered. (3) Redaction, access, and redaction logs. Where material would disclose trade secrets, proprietary source code, or third‑party confidential information, the DCM may produce a redacted version together with: (A) a redaction log that identifies each redaction, the legal or contractual basis asserted for it, and the specific §207 element(s) for which the redacted content is claimed non‑material; and (B) a secure unredacted‑access arrangement under which an assessor or an applicable regulatory authority may review unredacted materials (for example: on‑site read‑only review under controlled conditions; secure remote read‑only access to a fenced environment; or review under an agreed confidentiality protocol). The DCM shall retain contemporaneous evidence of the arrangement and all access logs (who accessed, when, and what was viewed). (4) Working papers and audit trail. The DCM shall produce the working papers, raw test artefacts, and verifier working files sufficient for an assessor to reproduce the conclusion that a given §207 element was satisfied (for example: test scripts, input data, test output, test harness metadata, timestamps, and change‑control records). The DCM shall maintain an auditable chain‑of‑custody for these materials. (5) Divergence and supplementation. Where a CFTC filing or Part 38/40 material does not demonstrably cover a specific PMCPS‑M §207 element, the DCM shall supply the additional test artefacts, remediation records, retest evidence, or attestations necessary to demonstrate compliance with that §207 element. A DCM may not rely on omission from a public filing as proof of non‑applicability to a PMCPS‑M obligation. (6) Commission authority and non‑waiver. Nothing in this paragraph limits the Commission's or any other applicable federal authority's statutory power to require production of unredacted materials, to inspect, or to direct supplemental disclosure; where a Commission order or request requires production of unredacted material the DCM shall comply within the timeframe ordered. This paragraph does not alter or relieve any recordkeeping, filing, or production obligation the DCM otherwise has under the Commodity Exchange Act or 17 C.F.R. Parts 1, 38, or 40. (7) Retention. The DCM shall retain all materials produced under this paragraph, including redaction logs and access records, for five years and shall produce them to an assessor or any applicable regulatory authority on request.
S002: Replace PMCPS‑M §405(d) (the DCM alignment clause) with the following self‑contained replacement paragraph and cross‑reference to §208(d): (d) Alignment for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the operator may satisfy paragraphs (a‑1) and (b) by producing the surveillance program, surveillance logs, monitoring reports, and related materials produced to or required to be made available to the Commission under 17 C.F.R. Part 38 and other federal requirements, subject to the following additional evidentiary requirements: (1) Mapping. The DCM shall provide a contemporaneous mapping that ties each surveillance rule, analytic, alert type, monitoring report, and independent‑monitor deliverable to the corresponding PMCPS‑M §405(a‑1) element(s), identifying the rule identifier, historical thresholds/configuration, dates of application, and the version history of the analytic logic. (2) Metrics and exception reporting. The DCM shall produce weekly and monthly exception reports for the prior twelve months, and shall provide metrics sufficient for an assessor to verify continuous monitoring, including mean time to detect (MTTD), mean time to respond (MTTR), alert volumes, and staffing‑coverage documentation showing 24/7 monitoring roles consistent with CFTC Staff Advisory 26‑16. (3) Independent integrity monitor deliverables. If the DCM relies on a monitor retained under PMCPS‑M §405(b), it shall produce the monitor's engagement letter, methodology, reports issued in the prior twelve months, evidence of remediation for each recommendation, and the monitor's personnel qualifications. Where these materials are produced to the Commission, the DCM shall nevertheless produce the mapping and the monitor's working papers or summaries sufficient for an assessor to verify that the monitor performed the services claimed. (4) Redaction and secure access. Where materials produced under this paragraph would reveal proprietary or confidential information, the DCM may produce redacted copies together with a redaction log and a secure unredacted‑access arrangement as described in §208(d)(3). The DCM shall retain access logs and produce them on request. (5) Commission directives, stays, and contemporaneous compliance. Where the Commission or its staff has issued a directive, stay, advisory, or other order affecting the DCM's surveillance or listing practices, the DCM shall produce the directive or advisory and contemporaneous evidence of compliance with it. The DCM shall include, as part of the mapping in subparagraph (1), any compensating controls applied during the period of a directive or stay. (6) Cross‑reference to §208(d). To the extent the DCM relies on Part 38/40 filings and independent reports to satisfy this paragraph, it shall comply with the DCM production, mapping, redaction, access, working‑papers, and retention requirements of §208(d).
S003: Remove: PMCPS-M §304(d): "A covered operator shall contribute to the funding of problem gambling research, prevention, and treatment. The contribution shall be calculated as a stated percentage of gross gaming revenue or an equivalent measure, shall be disclosed publicly, and shall be paid to an entity independent of the covered operator." (merged from S003, S015; credited: The Derivatives Regulator, The Minimal Intervention Advocate)
S004: Amend PMCPS-M § 301(i) to require that a covered operator shall establish and publish its complete declination-explanation taxonomy before the covered operator begins reporting under § 602(a)(10), rather than "before the operator first reports." Add a new sentence: "The taxonomy shall be filed with the covered operator's assessor and any applicable regulatory authority not less than thirty calendar days before the covered operator submits its first quarterly report under § 602(a)(10)." Amend § 602(a)(10) to add a conforming cross-reference: "reported in aggregate and de-identified consistently with applicable privacy law, aggregated by the taxonomy published under § 301(i) and filed under that section, and presented in bands with any cell containing fewer than five participants suppressed."
S005: Amend PMCPS-M § 502(e)(2) to require that for every settlement using a resolution source, the covered operator shall retain a contemporaneous archival capture meeting one of two standards: (A) Machine-accessible source (mandatory cryptographic capture). The capture shall include: (i) the complete response body returned by the source, in its original format; (ii) the full HTTP request issued, including headers and any query parameters; (iii) the retrieval timestamp in Coordinated Universal Time, recorded by the covered operator's system clock; (iv) a cryptographic hash (SHA-256 or stronger) of the response body, computed and recorded at retrieval; (v) the HTTP status code and all relevant transport metadata; and (vi) a chain-of-custody log recording the identity of the system component that performed the retrieval, any intermediate systems through which the response passed, and the identity of the person who stored the capture. (B) Non-machine-accessible source (attestation and contemporaneous record). Where the resolution source cannot be machine-accessed, the capture shall include: (i) a contemporaneous signed transcript, recording, or other documentary record of the item consulted, created at or within four hours of retrieval; (ii) the retrieval timestamp in Coordinated Universal Time; (iii) the identity and title of each person who performed the retrieval or witnessed it; (iv) the method of retrieval (e.g., telephone call to a named official, in-person observation of a published posting, email from a named source); (v) a signed attestation by the person performing the retrieval that the transcript or record is accurate and complete; and (vi) a chain-of-custody log recording the identity of each person who has accessed the record since retrieval. Amend PMCPS-M § 502(e) to add a new paragraph (e-1): "Verification and audit trail. For every settlement, the covered operator shall create and retain an immutable, timestamped record linking the archival capture required by paragraph (e)(2) to the settled contract, the settlement value published, and the settlement transaction identifier. This linkage record shall be retained in tamper-evident form and shall be produced to an assessor or any applicable regulatory authority on request. The covered operator shall not modify, delete, or redact any archival capture or linkage record except upon a written order from an applicable regulatory authority or a court of competent jurisdiction, and shall retain and produce contemporaneous documentation of any such order and of the redaction performed." Add to PMCPS-M § 601(a) a new item (14): "the archival captures and chain-of-custody records required by § 502(e)(2) and the linkage records required by § 502(e-1), retained in tamper-evident, cryptographically signed form, with timestamps and hashes verifiable by an assessor without access to the covered operator's live systems, for not less than five years from the date of settlement."
S006: Remove: PMCPS-M § 301(d)(3): the optional one-time liquidation at a firm reference price for excluded participants
S007: Replace PMCPS-C §102(a) with the following operative, self-contained text and add a short conforming amendment to PMCPS-M §202(b): New PMCPS-C §102(a) replacement text: "This standard determines scope. The procedural classification, recordkeeping, signature, filing, and reclassification obligations set out in §§105-106 are operative obligations on a covered operator and must be performed as stated. Nothing in this standard prescribes particular technical system behaviours or product design; operational, system, or conduct requirements that apply to a covered operator are stated in PMCPS‑M and PMCPS‑T. A covered operator's obligations under PMCPS‑M attach only where a product has been determined a covered contract in a written classification determination that is signed as required by PMCPS‑C §105(c) and retained under PMCPS‑C §105(f). Offering a product before completing and retaining that signed classification determination is non‑compliant with PMCPS‑C and may trigger the obligations in PMCPS‑M when the determination, as required, is made." Conforming amendment to PMCPS‑M §202(b) (replace last sentence of §202(b)): "PMCPS‑M §202(b) takes applicability from the operative classification obligations in PMCPS‑C §§104-106; for clarity, PMCPS‑M obligations attach only after the operator has made and retained the written, signed classification determination required by PMCPS‑C §105."
S008: Add a narrowly scoped, least‑cost, verifiable upstream‑assertion pathway and a running‑platform transition for identity/location verification to PMCPS‑M §403 and §601, cross‑referencing the assertion model in §207(a‑1). Insert the following new subparagraphs: Add to PMCPS‑M §403 a new paragraph (e‑1): "(e‑1) Acceptable methods and upstream assertions. To satisfy the 'verify' obligations in paragraph (b) and the 'location verification' obligation in paragraph (c) at the point of first order, a covered operator shall use one of the following verifiable means: (1) Direct venue verification: the operator performs an identity and location check in real time before accepting the first order, using industry-standard electronic identity verification (ID‑V) with evidence retained as required by §601. (2) Upstream assertion token: where third‑party gateways, UI providers, or sponsored access paths perform verification upstream of order acceptance, the covered operator may accept a cryptographically signed verification assertion token from an accredited verifier or the submitting gateway, provided the operator (A) verifies the token signature and nonce before accepting the first order; (B) logs the verification result and the token metadata; and (C) retains linkage metadata tying the token to the participant account and order. Tokens must include the minimum assertions: full legal name, date of birth, age‑check pass, jurisdictional location assertion, the assertion issuer identity, issuance timestamp, and a cryptographic signature. The operator shall reject the order where token verification fails. (3) Layered-location fallback: because technical location signals can be spoofed, the operator shall combine at least two independent sources of location evidence (for example, IP geolocation, device GPS, billing address + payment instrument BIN) and log the components used in the decision. Where the evidence set is inconclusive, the operator shall block trading in the disallowed jurisdiction." Add to PMCPS‑M §403 a transitional paragraph (e‑2): "(e‑2) Transition for running platforms. A covered operator already offering covered contracts on the effective date may use documented compensating controls for up to six months while implementing (e‑1). Compensating controls must include immediate temporary hard caps on per‑order notional and per‑account exposure for accounts without a verified assertion token, a policy preventing opening new large positions until verification, contemporaneous logging of each unverified order, and a written migration plan submitted to the assessor within thirty days. The system shall continue to fail safe by rejecting orders where a required control is unavailable." Add to PMCPS‑M §601(a) a new retention item (14): "(14) verification assertion tokens, verification logs, token metadata, and linkage records created under §403(e‑1), retained in tamper‑evident form for not less than five years."
S009: Amend PMCPS‑M § 504 (Settlement disputes) by adding a new paragraph (f) as follows: (f) Contest initiation from account evidence. A covered operator shall permit a participant to initiate a settlement contest directly from the participant’s order confirmation page or from the per‑order entry in the participant’s account order history without contacting customer service. The operator shall provide a one‑click contest action that, when used, (1) files the contest using the operator’s published contest procedure, (2) attaches the per‑order disclosure evidence required by § 501(a‑1) and any contemporaneous archival capture required by § 502(e) for the contested settlement, (3) issues an automated receipt to the participant containing a contest identifier, the filing timestamp, and the machine identifiers of the attached evidence, and (4) upon filing automatically grants the provisional hold described in paragraph (a) until the contest is resolved or the operator’s published hold period expires. The operator shall retain the contest filing and associated evidence as a record under § 601 for not less than five years.
S010: Amend PMCPS‑M § 303 (Participant disclosure) by inserting a new paragraph (e) and renumbering subsequent paragraphs as needed: (e) Provisional execution disclosure and participant controls. At the moment an execution is first reported to the participant (order confirmation), the covered operator shall state whether the execution is provisional or final. If provisional, the operator shall state, in human‑readable form and as a machine‑readable field included in the per‑order evidence required by § 501(a‑1): (1) the precise condition(s) that will convert the execution to final (for example, on‑chain confirmation, clearing reconciliation, or a specified reconciliation event), (2) the expected time to finality or the exact event/time that will produce finality, and (3) the effects of provisional status on account balances, withdrawal availability, and the participant’s ability to use proceeds or trigger automated actions. The order confirmation and the per‑order evidence must include a machine flag indicating provisional status and the machine identifier of the evidence of finality when it occurs. A covered operator shall not represent a provisional execution as settled for purposes of participant‑facing account balances, withdrawal availability, marketing communications, or statements of available funds; provisional amounts must be labelled as pending in account displays and in any automated withdrawal or transfer workflows until finality is achieved.
S011: Amend PMCPS-M § 502(e)(2) to require contemporaneous capture of resolution source determinations at the moment of settlement consultation, with explicit chain-of-custody logging.** Add to § 502(e)(2) after "retrieval timestamp in Coordinated Universal Time": ", and a dated, signed chain-of-custody log recording the identity of each person who accessed, reviewed, or transmitted the captured item from retrieval through retention, with the date and time of each access and the purpose stated." Amend § 502(e) introductory text to add: "For every resolution source identified in the resolution specification of a covered contract under § 501, a covered operator shall retain, and produce on request, evidence sufficient to demonstrate that the determination consulted at settlement was the determination actually published by that source at the time stated in § 501(a)(3), and that no intervening modification, substitution, or misreading occurred."
S012: Amend PMCPS-M § 501(a)(6) to require the correction period to be stated in the resolution specification before listing, and amend § 503(b-1) to require the covered operator to demonstrate that it learned of a resolution source revision within a time window that permits correction under that period.** Amend § 501(a)(6) to read: "the treatment of the contract if the resolution source revises its determination after settlement, the period within which a correction under § 503(b) or § 503(b-1) may be made (which shall not exceed fourteen calendar days from the date on which the settlement was published and shall be stated in the resolution specification before listing), and the method by which the covered operator will monitor for and detect revisions by the resolution source." Amend § 503(b-1) to add after "provided the correction is made within the period published under § 501(a)(6)": ", and the covered operator documents the date and time it first learned of the revision, the source of that learning (whether automated monitoring, notification from the resolution source, or other means), and evidence demonstrating that learning occurred within a time window permitting correction under the published period."
S013: Narrow PMCPS-C § 104(d)(1) by requiring demonstrable price-discovery utility as a gate condition for continuous-price commodity contracts Replace PMCPS-C § 104(d)(1) with the following text: "A product whose payout is the continuous, point-in-time price, rate, level, or index value of a commodity, security, or index, meaning the contract settles at the underlying level rather than by reference to a discrete threshold or occurrence, does not satisfy this Gate, provided that the contract's settlement mechanism and economic characteristics make it substantially equivalent to a regulated financial instrument whose primary regulatory framework governs continuous-price settlement, and the covered operator documents that the contract serves a price-discovery function materially distinct from the underlying cash or derivatives market and is not designed primarily to replicate retail wagering on price movement.**" Add to PMCPS-C § 105(b) a new paragraph (b-5): "Where a product is excluded under § 104(d)(1), the determination shall record the covered operator's documentary evidence that the contract satisfies the substantial-equivalence test and the price-discovery utility test, including (i) a comparison of the contract's liquidity, order-book depth, and spread to the underlying instrument's corresponding metrics, (ii) identification of the price-discovery value the contract provides that is not already supplied by the underlying market, and (iii) where the covered operator is not a registered designated contract market, a contemporaneous attestation by a person independent of the covered operator confirming the price-discovery assessment."
S014: Replace the mandatory independent integrity monitor requirement in PMCPS-M § 405(b) with a rebuttable presumption and an evidence-driven reinstatement trigger, conditioned on demonstrable surveillance effectiveness Replace PMCPS-M § 405(b) in its entirety with the following text: "(b) Baseline: Independent integrity monitor. A covered operator shall engage an independent integrity monitor that is not an affiliate and has no financial interest in the covered operator's trading volume, unless the covered operator obtains a written waiver from its assessor under paragraph (b-1). (b-1) Waiver pathway. An assessor may grant a written waiver of the independent monitor requirement where the covered operator demonstrates, by producing evidence specified in paragraph (b-2), that automated surveillance under § 405(a) and the disclosure and incident reporting under § 405(a-1) and § 405(c) provide equivalent protection against the harms addressed by this section. A waiver is valid for twelve months and requires annual renewal. An assessor shall revoke a waiver and require reinstatement of an independent monitor within thirty days if (i) an incident under § 603(e) reveals conduct prohibited by § 401 that the covered operator's surveillance did not detect, (ii) the covered operator fails to complete an accepted remediation plan, or (iii) the assessor's annual assessment under § 604(c) identifies material gaps in surveillance rule coverage, detection accuracy, or mean time to respond. (b-2) Evidence required for waiver. A covered operator seeking a waiver shall provide the assessor with (i) the surveillance methodology and rulebook under § 405(a-1), demonstrating that each surveillance rule has detected at least one true positive and one false positive in the preceding twelve months, or, for a new rule deployed less than twelve months before the waiver request, contemporaneous evidence from testing that the rule is capable of detecting both; (ii) mean time to detect and mean time to respond metrics for each surveillance rule, with comparison to industry benchmarks where available; (iii) the incident reports filed under § 405(c) in the preceding twelve months, with remediation records; (iv) a written assessment by the assessor that surveillance and reporting gaps, if any, do not materially impair detection of conduct prohibited by § 401; and (v) a written commitment that the covered operator will reinstate an independent monitor within thirty days if the assessor identifies material gaps in a subsequent annual review under § 604(c) or if an incident under § 603(e) occurs. (b-3) Sunset and re-evaluation.** The waiver pathway in paragraph (b-1) shall sunset on [date 36 months from the effective date of these Standards] unless, before that date, an adopting regulatory authority or the Institute publishes evidence that covered operators operating under a waiver have experienced materially lower rates of undetected market abuse, manipulation, or settlement disputes as compared to operators maintaining an independent monitor, or that assessor-driven reinstatement has proven as effective as baseline monitoring in preventing such conduct. If no such evidence is published, the independent monitor requirement in paragraph (b) shall become mandatory for all covered operators without a waiver in effect as of the sunset date." Retain the current § 405(b) text (the independent monitor's scope, deliverables, and reporting obligations) as a new paragraph (b-4), to be operative for all covered operators not holding a valid waiver under paragraph (b-1).

2b. Deliberation

9 of 14 items drew an objection. 8 were amended by their author.

S001

As submitted: Replace PMCPS‑M §208(d) (the "Alternative pathway for a registered designated contract market") with the following self‑contained replacement paragraph: (d) Alternative pathway for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the DCM may satisfy paragraphs (a)-(c) by producing the contemporaneous filings, attestations, testing artefacts, independent reports, and working papers it is required to generate or voluntarily files under the Commodity Exchange Act and 17 C.F.R. Parts 1, 38, and 40, subject to the requirements below. This alternative pathway replaces the text of PMCPS‑M §208(d) as published. (1) Required filings and documents. The DCM shall produce date‑stamped copies of: (A) all filings and attestations made to the Commission that relate to system safeguards, system testing, certification, or any Part 40 product self‑certification that includes product/system testing (including but not limited to materials produced under 17 C.F.R. §§ 38.1050-38.1051 and any Part 40 submission); (B) any independent laboratory reports relied upon in those filings; and (C) the internal test plans, test case identifiers, post‑change test results, remediation plans, remediation completion evidence, and retest results that map to each discrete obligation in PMCPS‑M §207. (2) Mapping and metadata. For every artifact produced under subparagraph (1) the DCM shall deliver a contemporaneous mapping (matrix) that links the artifact to the specific PMCPS‑M §207 element(s) it covers, identifying for each artifact: the test identifier(s), system build/version (or if unavailable for proprietary reasons, vendor test markers), the test date(s), the stated scope/objective of the test, and the exact element(s) of §207 claimed to be covered. (3) Redaction, access, and redaction logs. Where material would disclose trade secrets, proprietary source code, or third‑party confidential information, the DCM may produce a redacted version together with: (A) a redaction log that identifies each redaction, the legal or contractual basis asserted for it, and the specific §207 element(s) for which the redacted content is claimed non‑material; and (B) a secure unredacted‑access arrangement under which an assessor or an applicable regulatory authority may review unredacted materials (for example: on‑site read‑only review under controlled conditions; secure remote read‑only access to a fenced environment; or review under an agreed confidentiality protocol). The DCM shall retain contemporaneous evidence of the arrangement and all access logs (who accessed, when, and what was viewed). (4) Working papers and audit trail. The DCM shall produce the working papers, raw test artefacts, and verifier working files sufficient for an assessor to reproduce the conclusion that a given §207 element was satisfied (for example: test scripts, input data, test output, test harness metadata, timestamps, and change‑control records). The DCM shall maintain an auditable chain‑of‑custody for these materials. (5) Divergence and supplementation. Where a CFTC filing or Part 38/40 material does not demonstrably cover a specific PMCPS‑M §207 element, the DCM shall supply the additional test artefacts, remediation records, retest evidence, or attestations necessary to demonstrate compliance with that §207 element. A DCM may not rely on omission from a public filing as proof of non‑applicability to a PMCPS‑M obligation. (6) Commission authority and non‑waiver. Nothing in this paragraph limits the Commission's or any other applicable federal authority's statutory power to require production of unredacted materials, to inspect, or to direct supplemental disclosure; where a Commission order or request requires production of unredacted material the DCM shall comply within the timeframe ordered. This paragraph does not alter or relieve any recordkeeping, filing, or production obligation the DCM otherwise has under the Commodity Exchange Act or 17 C.F.R. Parts 1, 38, or 40. (7) Retention. The DCM shall retain all materials produced under this paragraph, including redaction logs and access records, for five years and shall produce them to an assessor or any applicable regulatory authority on request.

Objections: - The State Gaming Regulator: The redaction and secure-access regime in §208(d)(3) defers to an "agreed confidentiality protocol" without specifying who must agree or what happens if the DCM and assessor cannot agree on terms. A DCM could propose an arrangement the assessor cannot practically accept (e.g., review only on the DCM's premises, no notes, no copying), and the standard would not resolve the impasse. Fix: Add language to §208(d)(3)(B) requiring that if the parties cannot agree on access terms within thirty days, the DCM shall produce an unredacted version to the assessor under a standing protective order, or, if no such order exists, the DCM shall petition the applicable regulatory authority for a protective order within fifteen days. Make clear that inability to agree does not excuse production. - The Exchange Operator: Defect - The replacement requires mappings and "working papers" but does not require those artifacts to tie to a production build or otherwise state whether tests were run against production‑equivalent environments; an assessor cannot verify that a Part 38/40 filing or lab report actually evidences the live system behaviour relied on for §207 without that linkage. Also note: these documentary obligations cannot be enforced "at the point of order entry" (they are post‑fact evidence requirements). Fix - Add a required field to the mapping matrix that states (a) the system build/version, (b) whether the test was executed against production or a production‑equivalent environment, (c) the deployment timestamp for the build if it was deployed to production, and (d) a minimal production‑parity ju - The Participant Advocate: Defect - the paragraph governs DCM production to assessors/regulators but says nothing that gives participants the facts they need to decide whether to trade a listed product or to contest a settlement when the operator relies on redacted federal filings. Fix - require the DCM to disclose, as a machine‑readable field in the contract’s published specification and in the per‑order evidence included in the order confirmation, which specific PMCPS‑M §207 element(s) are being demonstrably supported by public Part 38/40 filings and which §207 element(s) the DCM is asserting are supported only by redacted/confidential materials; this disclosure must be made at the moment the product is listed and again at the moment the participant receives order confirmation. Once a participant has that fact the - The Minimal Intervention Advocate: Defect:** The suggestion creates a new evidentiary pathway for DCMs that is substantially more demanding than the baseline pathway in §208(a)-(c). Section 208(a)-(c) requires testing artifacts and working papers; S001 adds mapping matrices, redaction logs, secure-access arrangements, chain-of-custody records, and a five-year retention obligation specific to the DCM pathway. This is not a narrowing or substitution-it is an addition of requirements that do not apply to non-DCM operators. The suggestion's premise is that assessors cannot verify DCM compliance without these materials, but it does not explain why the baseline testing and working-paper requirements in §208(a)-(c) are insufficient, or why a DCM's Part 38/40 filings should require more granular evidence than an independent test la

Amended to: Replace PMCPS‑M §208(d) (the "Alternative pathway for a registered designated contract market") with the following self‑contained replacement paragraph: (d) Alternative pathway for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the DCM may satisfy paragraphs (a)-(c) by producing the contemporaneous filings, attestations, testing artefacts, independent reports, and working papers it is required to generate or voluntarily files under the Commodity Exchange Act and 17 C.F.R. Parts 1, 38, and 40, subject to the requirements below. This alternative pathway replaces the text of PMCPS‑M §208(d) as published. (1) Required filings and documents. The DCM shall produce date‑stamped copies of: (A) all filings and attestations made to the Commission that relate to system safeguards, system testing, certification, or any Part 40 product self‑certification that includes product/system testing (including but not limited to materials produced under 17 C.F.R. §§ 38.1050-38.1051 and any Part 40 submission); (B) any independent laboratory reports relied upon in those filings; and (C) the internal test plans, test case identifiers, post‑change test results, remediation plans, remediation completion evidence, and retest results that map to each discrete obligation in PMCPS‑M §207. (2) Mapping and metadata. For every artifact produced under subparagraph (1) the DCM shall deliver a contemporaneous mapping (matrix) that links the artifact to the specific PMCPS‑M §207 element(s) it covers, and that, at minimum, for each artifact identifies: (A) the test identifier(s); (B) the system build/version or vendor test marker; (C) whether the test was executed against production or a production‑equivalent environment; (D) if the build was deployed to production, the deployment timestamp for that build; (E) the stated scope/objective of the test; (F) the exact element(s) of §207 claimed to be covered; and (G) a brief production‑parity justification where the test did not run against production (describing environment differences and why results are representative of live behaviour). Where proprietary constraints prevent a precise build identifier, the vendor test marker must unambiguously correlate to a vendor’s internal build/deployment record produced under subparagraph (4). (3) Redaction, access, and dispute resolution. Where material would disclose trade secrets, proprietary source code, or third‑party confidential information, the DCM may produce a redacted version together with: (A) a redaction log that identifies each redaction, the legal or contractual basis asserted for it, and the specific §207 element(s) for which the redacted content is claimed non‑material; and (B) a secure unredacted‑access arrangement under which an assessor or an applicable regulatory authority may review unredacted materials (for example: on‑site read‑only review under controlled conditions; secure remote read‑only access to a fenced environment; or review under an agreed confidentiality protocol). The parties shall attempt in good faith to agree access terms. If the assessor and the DCM cannot agree on access terms within thirty (30) calendar days from the assessor’s first written request for unredacted access, the DCM shall either: (i) produce an unredacted version to the assessor under any standing protective order that already covers such materials; or (ii) if no standing protective order exists, petition the applicable regulatory authority for a protective order within fifteen (15) calendar days of the expiry of the thirty‑day negotiation period and produce a copy of that petition to the assessor. Inability to agree on access terms does not excuse or delay production beyond the timelines in this subparagraph. The DCM shall retain contemporaneous evidence of the arrangement negotiations and all access logs (who accessed, when, and what was viewed). (4) Working papers, raw artefacts, and chain‑of‑custody. The DCM shall produce the working papers, raw test artefacts, and verifier working files sufficient for an assessor to reproduce the conclusion that a given §207 element was satisfied (for example: test scripts, input data, test output, test harness metadata, timestamps, change‑control records, and vendor build/deployment records referenced in subparagraph (2)). The DCM shall maintain and produce an auditable chain‑of‑custody for these materials. (5) Divergence and supplementation. Where a Commission filing or Part 38/40 material does not demonstrably cover a specific PMCPS‑M §207 element as shown by the mapping required in subparagraph (2), the DCM shall supply the additional test artefacts, remediation records, retest evidence, or attestations necessary to demonstrate compliance with that §207 element. A DCM may not rely on omission from a public filing as proof of non‑applicability to a PMCPS‑M obligation. (6) Participant‑facing evidence (machine‑readable indexing). Where the DCM relies on any Commission filing, laboratory report, or other non‑public material to support one or more §207 elements for a listed product, the DCM shall include, in the product’s published specification in machine‑readable form and as a machine‑readable field included with the per‑order evidence delivered at order confirmation, an index identifying, by PMCPS‑M §207 element number, which elements are demonstrably supported by public Part 38/40 filings and which elements the DCM asserts are supported only by redacted or confidential materials produced under this paragraph. The DCM shall make that machine‑readable indexing available at the moment the product is listed and again at the moment an order confirmation is issued. This subparagraph prescribes the existence of a machine‑readable index only; it does not prescribe participant‑facing language or format beyond machine‑readability. (7) Commission authority and non‑waiver. Nothing in this paragraph limits the Commission's or any other applicable federal authority's statutory power to require production of unredacted materials, to inspect, or to direct supplemental disclosure; where a Commission order or request requires production of unredacted material the DCM shall comply within the timeframe ordered. This paragraph does not alter or relieve any recordkeeping, filing, or production obligation the DCM otherwise has under the Commodity Exchange Act or 17 C.F.R. Parts 1, 38, or 40. (8) Retention. The DCM shall retain all materials produced under this paragraph, including redaction logs and access records, for five years and shall produce them to an assessor or any applicable regulatory authority on request. To the extent a different retention period is required by the Commodity Exchange Act or 17 C.F.R. Parts 1, 38, or 40, the longer statutory or regulatory retention period governs. (9) Scope and limits. These requirements apply only where the DCM elects to use this alternative pathway and relies on Commission filings, attestations, or otherwise‑covered Part 38/40 materials to demonstrate satisfaction of PMCPS‑M §207. They govern the production, mapping, and indexing of materials the DCM already is required to generate or has voluntarily filed; they do not, by themselves, impose new substantive obligations on product design or operation nor do they replace any substantive or recordkeeping obligations that the DCM separately has under the Commodity Exchange Act or the Commission's rules. Author: I added the dispute‑resolution and timeline language requested by the State Gaming Regulator by (a) requiring good‑faith negotiation, (b) imposing a thirty‑day negotiation window, and (c) requiring either production under a standing protective order or petition to the applicable regulatory authority within fifteen days where none exists - and stating that inability to agree does not excuse production. I answered the Exchange Operator by expanding the mapping matrix in subparagraph (2) to require system build/version or vendor marker, explicit statement whether tests ran against production or p

S002

As submitted: Replace PMCPS‑M §405(d) (the DCM alignment clause) with the following self‑contained replacement paragraph and cross‑reference to §208(d): (d) Alignment for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the operator may satisfy paragraphs (a‑1) and (b) by producing the surveillance program, surveillance logs, monitoring reports, and related materials produced to or required to be made available to the Commission under 17 C.F.R. Part 38 and other federal requirements, subject to the following additional evidentiary requirements: (1) Mapping. The DCM shall provide a contemporaneous mapping that ties each surveillance rule, analytic, alert type, monitoring report, and independent‑monitor deliverable to the corresponding PMCPS‑M §405(a‑1) element(s), identifying the rule identifier, historical thresholds/configuration, dates of application, and the version history of the analytic logic. (2) Metrics and exception reporting. The DCM shall produce weekly and monthly exception reports for the prior twelve months, and shall provide metrics sufficient for an assessor to verify continuous monitoring, including mean time to detect (MTTD), mean time to respond (MTTR), alert volumes, and staffing‑coverage documentation showing 24/7 monitoring roles consistent with CFTC Staff Advisory 26‑16. (3) Independent integrity monitor deliverables. If the DCM relies on a monitor retained under PMCPS‑M §405(b), it shall produce the monitor's engagement letter, methodology, reports issued in the prior twelve months, evidence of remediation for each recommendation, and the monitor's personnel qualifications. Where these materials are produced to the Commission, the DCM shall nevertheless produce the mapping and the monitor's working papers or summaries sufficient for an assessor to verify that the monitor performed the services claimed. (4) Redaction and secure access. Where materials produced under this paragraph would reveal proprietary or confidential information, the DCM may produce redacted copies together with a redaction log and a secure unredacted‑access arrangement as described in §208(d)(3). The DCM shall retain access logs and produce them on request. (5) Commission directives, stays, and contemporaneous compliance. Where the Commission or its staff has issued a directive, stay, advisory, or other order affecting the DCM's surveillance or listing practices, the DCM shall produce the directive or advisory and contemporaneous evidence of compliance with it. The DCM shall include, as part of the mapping in subparagraph (1), any compensating controls applied during the period of a directive or stay. (6) Cross‑reference to §208(d). To the extent the DCM relies on Part 38/40 filings and independent reports to satisfy this paragraph, it shall comply with the DCM production, mapping, redaction, access, working‑papers, and retention requirements of §208(d).

Objections: - The Exchange Operator: Defect - The paragraph mandates MTTD/MTTR and staffing‑coverage documentation and weekly/monthly exception reports but does not define MTTD/MTTR or an acceptable method to establish them (ground truth for "detection" is often investigator‑level and may not exist for every analytic rule). As drafted this can be untestable or produce inconsistent assessor judgements; surveillance performance cannot be proven at order entry (it is an operational metric). Fix - Add concise, operational definitions and allowed proof alternatives: define MTTD as time from event timestamp (or seeded‑test timestamp) to the timestamp of the first generated alert; define MTTR as time from alert to first remediation action timestamp. Permit proof by one of (A) historical incident logs showing event→alert→remediation - The Participant Advocate: Defect - the DCM alignment clause compels production of surveillance artefacts to assessors but does not put participants on notice, at the point they open an account or execute orders, of which surveillance rules/alert types can produce automatic holds, order reversals, restrictions, or other settlement‑affecting actions, nor does it give participants an in‑flow control or immediate contest path when surveillance drives an adverse action. Fix - require the DCM to publish, at account opening and as a machine‑readable summary linked in the order confirmation before the first order, the set of surveillance rule identifiers/alert types that may directly cause an automatic or provisional action affecting participant trades or balances, together with whether those actions are automatic or discr

Amended to: (d) Alignment for a registered designated contract market (DCM). Where the covered operator is a DCM registered under the Commodity Exchange Act, the operator may satisfy paragraphs (a‑1) and (b) by producing the surveillance program, surveillance logs, monitoring reports, and related materials produced to or required to be made available to the Commission under 17 C.F.R. Part 38 and other federal requirements, subject to the following additional evidentiary requirements: (1) Definitions. For the purposes of this paragraph: (A) "Event timestamp" means the timestamp assigned by the DCM to the market event that is the subject of detection (for order/trade analytics, the order entry or trade execution timestamp; for seeded tests, the seed injection timestamp). (B) "Mean time to detect (MTTD)" means, for a specified analytic or alert type, the arithmetic mean of the intervals measured from the event timestamp to the timestamp of the first generated alert attributable to that event. (C) "Mean time to respond (MTTR)" means, for a specified analytic or alert type, the arithmetic mean of the intervals measured from the timestamp of the first generated alert to the timestamp of the first recorded remediation action taken in response to that alert. (D) "Remediation action" means a recorded action that mitigates, resolves, documents escalation of, or otherwise addresses the alerted condition (including investigator adjudication, order hold/suspension, trade review, reversal, referral to compliance, or similar recorded actions). (2) Mapping. The DCM shall provide a contemporaneous mapping that ties each surveillance rule, analytic, alert type, monitoring report, and independent‑monitor deliverable to the corresponding PMCPS‑M §405(a‑1) element(s). The mapping shall identify each rule or analytic identifier, the historical thresholds or configuration values in effect, the dates those configurations applied, and the version history of the analytic logic sufficient for an assessor to determine what code, parameter, or configuration produced each historical alert. (3) Metrics and exception reporting. The DCM shall produce weekly and monthly exception reports for the prior twelve months and shall produce metrics sufficient for an assessor to verify continuous monitoring. These metrics shall include MTTD and MTTR as defined above, alert volumes by rule/analytic, and staffing‑coverage documentation showing monitoring roles and schedules consistent with CFTC Staff Advisory 26‑16. Proof of MTTD/MTTR and detection/response performance may be shown by one or more of the following, as applicable to the analytic or alert type: (A) Historical incident logs that record event timestamp → alert timestamp → remediation action timestamp for real incidents; (B) Seeded‑test records that show seed injection timestamp → generated alert timestamp → adjudication/remediation timestamp; or (C) Where neither (A) nor (B) is practicable for a particular analytic because ground truth is investigator‑level or inherently adjudicative, analyst adjudication logs together with the analytic's design, calibration records, and periodic calibration or validation reports sufficient for an assessor to reconstruct detection and response timelines. The DCM may supply statistically representative samples where full population disclosure is infeasible; the DCM shall document the sampling method. (4) Independent integrity monitor deliverables. If the DCM relies on an independent monitor retained under PMCPS‑M §405(b), the DCM shall produce the monitor's engagement letter, methodology, workplan, reports issued in the prior twelve months, evidence of remediation for each recommendation, and the monitor's personnel qualifications. Where these materials were produced to the Commission, the DCM shall nevertheless produce the mapping required by subparagraph (2) and working papers or summaries sufficient for an assessor to verify that the monitor performed the services claimed. (5) Participant‑impact mapping and evidentiary proof of notice. The DCM shall include in its mapping a contemporaneous identification, for each surveillance rule, analytic, and alert type, whether and how that rule/analytic is capable of producing automatic or provisional actions that may directly affect participant orders, positions, or account balances (examples of such actions include holds, automatic reversals, provisional suspensions, or immediate restrictions). The DCM shall produce evidence that participants were provided notice of such potential actions in the normal course of business consistent with the DCM's published participant‑notice policy. Acceptable evidentiary examples include account‑opening acknowledgment logs, system publication timestamps for the referenced summary, system‑generated order confirmation or pre‑trade distribution logs referencing the published notice, or other automated distribution logs. This paragraph requires maintenance and production of contemporaneous evidentiary records of notice; it does not prescribe the content or exact distribution mechanism of participant‑facing disclosures. (6) Redaction and secure access. Where materials produced under this paragraph would reveal proprietary or confidential information, the DCM may produce redacted copies together with a redaction log and a secure unredacted‑access arrangement as described in §208(d)(3). The DCM shall retain and produce access logs and produce them on request. (7) Commission directives, stays, and contemporaneous compliance. Where the Commission or its staff has issued a directive, stay, advisory, or other order affecting the DCM's surveillance or listing practices, the DCM shall produce the directive or advisory and contemporaneous evidence of compliance with it. The DCM shall include, as part of the mapping in subparagraph (2), any compensating controls applied during the period of a directive or stay. (8) Cross‑reference to §208(d). To the extent the DCM relies on Part 38/40 filings and independent reports to satisfy this paragraph, it shall comply with the DCM production, mapping, redaction, access, working‑papers, and retention requirements of §208(d). Author: I added operational definitions for MTTD, MTTR, event timestamp, and remediation action and specified acceptable proof alternatives (historical incident logs, seeded tests, or analyst adjudication plus calibration records) to resolve the Exchange Operator's objection about untestable/undefined metrics. I also added a participant‑impact mapping requirement plus an evidentiary requirement that the DCM maintain contemporaneous records demonstrating that participants were provided notice consistent with the DCM's participant‑notice policy, but I did not prescribe participant‑facing wording or exac

S003

As submitted: Remove: PMCPS-M §304(d): "A covered operator shall contribute to the funding of problem gambling research, prevention, and treatment. The contribution shall be calculated as a stated percentage of gross gaming revenue or an equivalent measure, shall be disclosed publicly, and shall be paid to an entity independent of the covered operator."

Objections: - The State Gaming Regulator: The replacement text requires "annual" disclosure of voluntary contributions but does not define what "voluntary" means or whether an operator must affirmatively search for or solicit funding arrangements. An operator could disclose only contributions it happens to make without a duty to establish or participate in any research or treatment program. The consumer-protection purpose is lost. Fix: Amend the replacement to require that a covered operator shall (a) publicly disclose annually any contributions, grants, or funding it has made or committed to for problem-gambling research, prevention, or treatment; and (b) cooperate with any adopting authority's request for operator participation in, or funding of, research or treatment programs where that authority has lawful power to direct - The Settlement and Integrity Specialist: The replacement approach you propose-requiring disclosure of voluntary contributions and cooperation with authority-administered programs-is not a replacement; it is a different obligation. You have identified that §304(d) is outside my remit (it is a consumer-protection and fiscal-policy matter, not a settlement/integrity matter), and you propose to remove it and substitute a disclosure duty. That substitution belongs to the consumer-protection seat, not to you as the author. If you believe §304(d) should be removed, propose only the removal, with a clear statement that you are not proposing a replacement. If you wish to propose the disclosure alternative, that suggestion must come from or be co-authored by the consumer-protection seat. As drafted, S003 conflates removal with substitution

Amended to: Delete PMCPS-M §304(d) in its entirety. No replacement text is proposed. Author: I removed §304(d) only and do not substitute any new obligation. This answers the Settlement & Integrity Specialist's objection by limiting this seat's action to removal (consumer-protection or fiscal obligations are outside the Derivatives Regulator remit). It also addresses the State Gaming Regulator's concern by not attempting to define "voluntary" or to impose duties to solicit or participate in funding arrangements; if the committee wishes to require disclosure, mandated contributions, or cooperation with adopting authorities, the consumer-protection seat must propose the substantive repl

S004

As submitted: Amend PMCPS-M § 301(i) to require that a covered operator shall establish and publish its complete declination-explanation taxonomy before the covered operator begins reporting under § 602(a)(10), rather than "before the operator first reports." Add a new sentence: "The taxonomy shall be filed with the covered operator's assessor and any applicable regulatory authority not less than thirty calendar days before the covered operator submits its first quarterly report under § 602(a)(10)." Amend § 602(a)(10) to add a conforming cross-reference: "reported in aggregate and de-identified consistently with applicable privacy law, aggregated by the taxonomy published under § 301(i) and filed under that section, and presented in bands with any cell containing fewer than five participants suppressed."

Objections: - The Minimal Intervention Advocate: Defect: The suggestion amends §301(i) to require filing the taxonomy "not less than thirty calendar days before the covered operator submits its first quarterly report" and adds a conforming cross-reference to §602(a)(10). However, §301(i) currently states the taxonomy "shall remain stable for each calendar year." The suggestion does not explain what happens if an operator files the taxonomy on day 30 before the first report, then discovers in month 6 that the taxonomy is inadequate or that new declination reasons have emerged. Does "stable for each calendar year" mean the operator cannot revise it mid-year? If so, the thirty-day advance-filing requirement locks the operator into a taxonomy that may become unfit before year-end. If the operator may revise mid-year, the thirty-day requi

Amended to: Amend PMCPS-M § 301(i) to require that a covered operator shall establish and publish its complete declination-explanation taxonomy before the covered operator begins reporting under § 602(a)(10), rather than "before the operator first reports." Add a new sentence: "The taxonomy shall be filed with the covered operator's assessor and any applicable regulatory authority not less than thirty calendar days before the covered operator submits its first quarterly report under § 602(a)(10). A covered operator may revise the taxonomy mid-year upon written notice to its assessor and any applicable regulatory authority, provided that any revision takes effect no earlier than the next calendar quarter following the notice and applies prospectively only to declinations reported in that quarter and thereafter." Amend § 602(a)(10) to add a conforming cross-reference: "reported in aggregate and de-identified consistently with applicable privacy law, aggregated by the taxonomy published under § 301(i) and filed under that section as in effect for the reporting period, and presented in bands with any cell containing fewer than five participants suppressed." Author: ** The objection identified a genuine conflict: if the taxonomy must be "stable for each calendar year" under the current § 301(i) language, a thirty-day advance-filing requirement would lock the operator into an inflexible taxonomy for nine months, creating exactly the fitness problem the Minimal Intervention Advocate described. The amendment preserves the thirty-day filing requirement for the first report-a regulatory need borrowed from Ohio Admin. Code ch. 3772-12 § 3772-12-05.1 and N.J.A.C. 13:69O-1.6, which require advance notice of house rules and changes to the gaming commission. It als

S005

As submitted: Amend PMCPS-M § 502(e)(2) to require that for every settlement using a resolution source, the covered operator shall retain a contemporaneous archival capture meeting one of two standards: (A) Machine-accessible source (mandatory cryptographic capture). The capture shall include: (i) the complete response body returned by the source, in its original format; (ii) the full HTTP request issued, including headers and any query parameters; (iii) the retrieval timestamp in Coordinated Universal Time, recorded by the covered operator's system clock; (iv) a cryptographic hash (SHA-256 or stronger) of the response body, computed and recorded at retrieval; (v) the HTTP status code and all relevant transport metadata; and (vi) a chain-of-custody log recording the identity of the system component that performed the retrieval, any intermediate systems through which the response passed, and the identity of the person who stored the capture. (B) Non-machine-accessible source (attestation and contemporaneous record). Where the resolution source cannot be machine-accessed, the capture shall include: (i) a contemporaneous signed transcript, recording, or other documentary record of the item consulted, created at or within four hours of retrieval; (ii) the retrieval timestamp in Coordinated Universal Time; (iii) the identity and title of each person who performed the retrieval or witnessed it; (iv) the method of retrieval (e.g., telephone call to a named official, in-person observation of a published posting, email from a named source); (v) a signed attestation by the person performing the retrieval that the transcript or record is accurate and complete; and (vi) a chain-of-custody log recording the identity of each person who has accessed the record since retrieval. Amend PMCPS-M § 502(e) to add a new paragraph (e-1): "Verification and audit trail. For every settlement, the covered operator shall create and retain an immutable, timestamped record linking the archival capture required by paragraph (e)(2) to the settled contract, the settlement value published, and the settlement transaction identifier. This linkage record shall be retained in tamper-evident form and shall be produced to an assessor or any applicable regulatory authority on request. The covered operator shall not modify, delete, or redact any archival capture or linkage record except upon a written order from an applicable regulatory authority or a court of competent jurisdiction, and shall retain and produce contemporaneous documentation of any such order and of the redaction performed." Add to PMCPS-M § 601(a) a new item (14): "the archival captures and chain-of-custody records required by § 502(e)(2) and the linkage records required by § 502(e-1), retained in tamper-evident, cryptographically signed form, with timestamps and hashes verifiable by an assessor without access to the covered operator's live systems, for not less than five years from the date of settlement."

Objections: - The Derivatives Regulator: Defect - For a registered DCM this paragraph effectively prescribes a new, mandatory evidentiary format (cryptographic capture, tamper‑evident storage, and a prohibition on any modification except by court/order) that can conflict with existing recordkeeping, retention, and production obligations under the Commodity Exchange Act and 17 C.F.R. Part 38 and Part 40 (including the DCM's obligations to maintain records in the forms and locations prescribed by the Commission, and to produce unredacted material to the Commission on request). It also substitutes a single technical standard (SHA‑256, cryptographic signing) as the only acceptable proof of integrity without allowing DCMs to rely on demonstrably equivalent tamper‑evident practices already used to satisfy Part 38/40. Fix - Carve out re - The Minimal Intervention Advocate: Defect:** The suggestion requires cryptographic hashing and chain-of-custody logging for every settlement using a resolution source, and adds a new §502(e-1) requiring "immutable, timestamped" linkage records in "tamper-evident form." It then adds a new §601(a)(14) retention obligation. However, the suggestion does not specify what "tamper-evident form" means, what cryptographic standard the operator must use to make the linkage record immutable, or how an assessor verifies tamper-evidence without access to the operator's live systems. The reference to "Nevada Gaming Control Board Notice 2026-47" and "17 C.F.R. § 38.1050" suggests a standard exists, but the suggestion does not cite the specific technical requirement or explain how it applies to a non-gaming, non-DCM covered operator.

Author stood on the text. Stood on the text as written. The objections conflate two distinct regulatory regimes and misread the scope of this suggestion. To the Derivatives Regulator's objection: This suggestion does not apply to registered DCMs. PMCPS-M § 202(b) restricts the entire Part 200-500 framework to covered operators that are not registered with the CFTC. A registered DCM is excluded by definition. The Derivatives Regulator's concern about conflict with 17 C.F.R. Part 38 and Part 40 is therefore inapplicable. If a DCM is also operating a designated contract market under state law or another framework that incorporates PMCPS-M by reference, that operator must comply with both regimes; PMCPS-M does not displace federal obligations, and the operator bears the burden of reconciling them-that is not a de

S006

As submitted: Remove: PMCPS-M § 301(d)(3): the optional one-time liquidation at a firm reference price for excluded participants

Objections: - The Participant Advocate: Defect - deleting the optional one‑time liquidation at a firm reference price removes a participant option that can be materially protective where an excluded participant lacks market access to close positions promptly (for example, after exclusion is applied mid‑session). Fix - do not remove §301(d)(3); instead require that the operator present the optional reference‑price liquidation offer to the excluded participant at the moment the exclusion is imposed (and include the offer in the per‑order / exclusion notification machine‑readable evidence). The disclosure must state the precise reference‑price method and data sources used, and the participant must give explicit, recorded consent (separately from the exclusion) before the operator may liquidate at that reference price. Once the part

Amended to: Revise PMCPS-M § 301(d)(3) as follows: (3) If an operator imposes exclusion on a participant, the operator must, at the moment exclusion takes effect, present to the excluded participant an offer to liquidate all open positions at a firm reference price. The offer must: (A) State the precise reference-price methodology, the data sources and timestamps used to calculate it, and the calculation itself; (B) Remain open for a period the operator specifies in advance in its operating procedures, which period must be no less than one business day; (C) Require the participant's explicit, separately recorded consent before any liquidation occurs, distinct from the exclusion notice itself; (D) Be provided in the machine-readable exclusion notification format required by PMCPS-M § 301(c); (E) Be retained by the operator as evidence of offer, acceptance, and execution, with timestamps and participant identifier; (F) Apply only if the participant affirmatively accepts; if the participant does not accept within the stated period, positions remain open subject to PMCPS-M § 301(d)(1) and (2). The operator must not liquidate positions under this subsection without contemporaneous recorded consent and must not use reference prices that differ materially from those disclosed in the offer. Author: ** This amendment preserves the participant protection the Participant Advocate identified-the optional one-time liquidation at a firm reference price when market access is impaired by mid-session exclusion-while answering the objection by making the offer mandatory to present, requiring explicit separate consent with full disclosure of methodology and data sources, and creating a verifiable evidence trail (timestamps, calculation, consent recording, execution record). The operator retains discretion to set the offer window in its procedures, but cannot liquidate without affirmative participan

S008

As submitted: Add a narrowly scoped, least‑cost, verifiable upstream‑assertion pathway and a running‑platform transition for identity/location verification to PMCPS‑M §403 and §601, cross‑referencing the assertion model in §207(a‑1). Insert the following new subparagraphs: Add to PMCPS‑M §403 a new paragraph (e‑1): "(e‑1) Acceptable methods and upstream assertions. To satisfy the 'verify' obligations in paragraph (b) and the 'location verification' obligation in paragraph (c) at the point of first order, a covered operator shall use one of the following verifiable means: (1) Direct venue verification: the operator performs an identity and location check in real time before accepting the first order, using industry-standard electronic identity verification (ID‑V) with evidence retained as required by §601. (2) Upstream assertion token: where third‑party gateways, UI providers, or sponsored access paths perform verification upstream of order acceptance, the covered operator may accept a cryptographically signed verification assertion token from an accredited verifier or the submitting gateway, provided the operator (A) verifies the token signature and nonce before accepting the first order; (B) logs the verification result and the token metadata; and (C) retains linkage metadata tying the token to the participant account and order. Tokens must include the minimum assertions: full legal name, date of birth, age‑check pass, jurisdictional location assertion, the assertion issuer identity, issuance timestamp, and a cryptographic signature. The operator shall reject the order where token verification fails. (3) Layered-location fallback: because technical location signals can be spoofed, the operator shall combine at least two independent sources of location evidence (for example, IP geolocation, device GPS, billing address + payment instrument BIN) and log the components used in the decision. Where the evidence set is inconclusive, the operator shall block trading in the disallowed jurisdiction." Add to PMCPS‑M §403 a transitional paragraph (e‑2): "(e‑2) Transition for running platforms. A covered operator already offering covered contracts on the effective date may use documented compensating controls for up to six months while implementing (e‑1). Compensating controls must include immediate temporary hard caps on per‑order notional and per‑account exposure for accounts without a verified assertion token, a policy preventing opening new large positions until verification, contemporaneous logging of each unverified order, and a written migration plan submitted to the assessor within thirty days. The system shall continue to fail safe by rejecting orders where a required control is unavailable." Add to PMCPS‑M §601(a) a new retention item (14): "(14) verification assertion tokens, verification logs, token metadata, and linkage records created under §403(e‑1), retained in tamper‑evident form for not less than five years."

Objections: - The Settlement and Integrity Specialist: The upstream-assertion pathway and token model in §403(e-1)(2) are sound and verifiable. However, the transition in §403(e-2) permits "compensating controls" (hard caps and logging) for six months without requiring the operator to demonstrate that those controls actually prevent the harms that §403(b) and (c) are designed to prevent. A running platform under compensating controls could open new accounts, accept orders from unverified participants in restricted jurisdictions, and log the violations-all within the six-month window. The transition should require that compensating controls be effective (i.e., the operator must demonstrate that capped orders do not result in unverified participants trading in disallowed jurisdictions), not merely present. Amend §403(e-2) to require: "Compensa

Amended to: Add to PMCPS‑M §403 the following new subparagraphs, and add to PMCPS‑M §601(a) the new retention item (14): "(e‑1) Acceptable methods and upstream assertions. To satisfy the 'verify' obligations in paragraph (b) and the 'location verification' obligation in paragraph (c) at the point of first order, a covered operator shall use one of the following verifiable means: (1) Direct venue verification: the operator performs an identity and location check in real time before accepting the first order, using industry‑standard electronic identity verification (ID‑V) with evidence retained as required by §601. (2) Upstream assertion token: where third‑party gateways, UI providers, or sponsored access paths perform verification upstream of order acceptance, the covered operator may accept a cryptographically signed verification assertion token from an accredited verifier or the submitting gateway, provided the operator: (A) verifies the token signature and nonce prior to accepting the first order from the submitting account; (B) confirms that the token includes, at minimum, assertions for: full legal name, date of birth (or age‑check pass), asserted jurisdictional location at issuance time, assertion issuer identity, issuance timestamp, and a cryptographic signature that binds the token to a submission identifier or account identifier; (C) logs the verification result and token metadata; and (D) retains linkage metadata tying the token to the participant account and the specific order as required by §601. The operator shall reject the order where token verification fails or where the token metadata does not match the submitting account or order. (3) Layered‑location fallback: because technical location signals can be spoofed, where a single signal is used the operator shall combine at least two independent sources of location evidence (for example, IP geolocation and device GPS, or billing address plus payment‑instrument BIN) and log the individual components and the decision rule used. Where the combined evidence set is inconclusive for the jurisdictional decision required by paragraph (c), the operator shall block trading in the disallowed jurisdiction." "(e‑2) Transition for running platforms. A covered operator already offering covered contracts on the effective date may use documented compensating controls for up to six months while implementing the measures in (e‑1). Compensating controls shall include at minimum: immediate temporary hard caps on per‑order notional and per‑account position exposure for accounts without a verified assertion token; a prohibition on opening new large or margin‑enabled positions for accounts lacking verification; contemporaneous logging of each unverified order and its disposition; and a written migration plan documenting the schedule and milestones to implement (e‑1), submitted to the assessor within thirty days of the effective date of the transition. To ensure compensating controls are effective rather than merely present, the operator shall, within seven days of beginning the compensating‑controls period, execute an initial effectiveness validation and thereafter perform ongoing periodic validations as follows: (1) Initial validation (within seven days): produce and retain (per §601) an automated report showing that for the seven calendar days immediately preceding validation there were zero executed trades that resulted in new or materially enlarged positions for accounts lacking verification in jurisdictions disallowed under paragraph (c); and execute at least three representative simulated or instrumented submission attempts that mimic unverified sources from disallowed jurisdictions and demonstrate the system blocked or rejected those submissions. The operator shall retain the raw logs of those simulated attempts and the automated report, and shall submit a summary of the results and the migration plan to the assessor within fourteen days of beginning compensating controls. (2) Ongoing validation: thereafter, on a weekly basis while compensating controls remain in use, the operator shall generate and retain an automated summary report indicating (A) the count of unverified orders received, (B) the disposition of those orders (blocked, rejected, accepted but capped), and (C) evidence that no accepted unverified orders in disallowed jurisdictions produced executed fills that opened or enlarged positions contrary to paragraph (c). The operator shall retain the underlying logs for each weekly summary and make them available to the assessor on request. (3) Failure and escalation: if at any time the automated reports or logs show an occurrence of an unverified account in a disallowed jurisdiction obtaining an executed trade that opens or materially enlarges a position contrary to paragraph (c), the operator shall immediately suspend acceptance of unverified orders for that jurisdiction and shall not resume acceptance until the root cause is remediated and validated by a repeat of the initial validation steps documented in (1). The operator shall retain all remediation and validation evidence under §601. The system shall continue to fail safe by rejecting orders where a required control or validation function is unavailable." Add to PMCPS‑M §601(a) a new retention item: "(14) verification assertion tokens, verification logs, token metadata, linkage records created under §403(e‑1), and compensating‑controls validation reports and underlying logs required under §403(e‑2), retained in tamper‑evident form for not less than five years." Author: I changed the transition paragraph (e‑2) to require demonstrable effectiveness of compensating controls rather than mere existence. This answers the Settlement and Integrity Specialist's objection by adding specific, low‑cost, verifiable measures: an initial automated report covering the recent historic window, a small set of internal simulated submission tests, weekly automated summaries while controls remain in place, and an immediate suspension + remediation requirement on any failure. These measures are operationally minimal (they reuse existing logging and test capabilities common to trad

S013

As submitted: Narrow PMCPS-C § 104(d)(1) by requiring demonstrable price-discovery utility as a gate condition for continuous-price commodity contracts Replace PMCPS-C § 104(d)(1) with the following text: "A product whose payout is the continuous, point-in-time price, rate, level, or index value of a commodity, security, or index, meaning the contract settles at the underlying level rather than by reference to a discrete threshold or occurrence, does not satisfy this Gate, provided that the contract's settlement mechanism and economic characteristics make it substantially equivalent to a regulated financial instrument whose primary regulatory framework governs continuous-price settlement, and the covered operator documents that the contract serves a price-discovery function materially distinct from the underlying cash or derivatives market and is not designed primarily to replicate retail wagering on price movement.**" Add to PMCPS-C § 105(b) a new paragraph (b-5): "Where a product is excluded under § 104(d)(1), the determination shall record the covered operator's documentary evidence that the contract satisfies the substantial-equivalence test and the price-discovery utility test, including (i) a comparison of the contract's liquidity, order-book depth, and spread to the underlying instrument's corresponding metrics, (ii) identification of the price-discovery value the contract provides that is not already supplied by the underlying market, and (iii) where the covered operator is not a registered designated contract market, a contemporaneous attestation by a person independent of the covered operator confirming the price-discovery assessment."

Objections: - The State Gaming Regulator: The price-discovery gate requires "demonstrable" utility "materially distinct from the underlying cash or derivatives market," but does not specify who bears the burden of proof or what standard an assessor applies to reject a claimed price-discovery function. A DCM could assert price discovery without serious evidence and an assessor would have no administrable standard to challenge it. Fix: Add to §105(b-5) a requirement that where the covered operator is not a registered DCM, the independent attestation must affirmatively conclude that the contract's price-discovery contribution is material and distinct, and must state the specific metrics or market data supporting that conclusion; an assessor may reject the determination and require reclassification if the attestation is conclusory

Amended to: Replace PMCPS-C § 104(d)(1) with the following text: "A product whose payout is the continuous, point-in-time price, rate, level, or index value of a commodity, security, or index, meaning the contract settles at the underlying level rather than by reference to a discrete threshold or occurrence, does not satisfy this Gate, provided that the contract's settlement mechanism and economic characteristics make it substantially equivalent to a regulated financial instrument whose primary regulatory framework governs continuous-price settlement, and the covered operator documents that the contract serves a price-discovery function materially distinct from the underlying cash or derivatives market and is not designed primarily to replicate retail wagering on price movement." Add to PMCPS-C § 105(b) a new paragraph (b-5): "Where a product is excluded under § 104(d)(1), the determination shall record the covered operator's documentary evidence that the contract satisfies the substantial-equivalence test and the price-discovery utility test, including (i) a comparison of the contract's liquidity, order-book depth, and spread to the underlying instrument's corresponding metrics, (ii) identification of the price-discovery value the contract provides that is not already supplied by the underlying market, and (iii) where the covered operator is not a registered designated contract market, a contemporaneous attestation by a person independent of the covered operator. The independent attestation must affirmatively conclude that the contract's price-discovery contribution is material and distinct, state the specific metrics or market data supporting that conclusion, and identify any material gaps between the contract's price-discovery function and that of the underlying market. An assessor may reject the determination and require reclassification if the attestation is conclusory, relies on unsupported assertions, or fails to address material differences in liquidity, spreads, or information asymmetry between the contract and the underlying instrument." Author: ** The objection correctly identified that "demonstrable" and "materially distinct" lacked an administrable standard for assessor review. The amendment supplies that standard by requiring the independent attestation to affirmatively conclude (not merely assert), cite specific metrics or market data, and identify gaps-giving an assessor concrete grounds to reject conclusory claims. This preserves the price-discovery gate while making it verifiable against evidence, which is this board's stated priority.

S014

As submitted: Replace the mandatory independent integrity monitor requirement in PMCPS-M § 405(b) with a rebuttable presumption and an evidence-driven reinstatement trigger, conditioned on demonstrable surveillance effectiveness Replace PMCPS-M § 405(b) in its entirety with the following text: "(b) Baseline: Independent integrity monitor. A covered operator shall engage an independent integrity monitor that is not an affiliate and has no financial interest in the covered operator's trading volume, unless the covered operator obtains a written waiver from its assessor under paragraph (b-1). (b-1) Waiver pathway. An assessor may grant a written waiver of the independent monitor requirement where the covered operator demonstrates, by producing evidence specified in paragraph (b-2), that automated surveillance under § 405(a) and the disclosure and incident reporting under § 405(a-1) and § 405(c) provide equivalent protection against the harms addressed by this section. A waiver is valid for twelve months and requires annual renewal. An assessor shall revoke a waiver and require reinstatement of an independent monitor within thirty days if (i) an incident under § 603(e) reveals conduct prohibited by § 401 that the covered operator's surveillance did not detect, (ii) the covered operator fails to complete an accepted remediation plan, or (iii) the assessor's annual assessment under § 604(c) identifies material gaps in surveillance rule coverage, detection accuracy, or mean time to respond. (b-2) Evidence required for waiver. A covered operator seeking a waiver shall provide the assessor with (i) the surveillance methodology and rulebook under § 405(a-1), demonstrating that each surveillance rule has detected at least one true positive and one false positive in the preceding twelve months, or, for a new rule deployed less than twelve months before the waiver request, contemporaneous evidence from testing that the rule is capable of detecting both; (ii) mean time to detect and mean time to respond metrics for each surveillance rule, with comparison to industry benchmarks where available; (iii) the incident reports filed under § 405(c) in the preceding twelve months, with remediation records; (iv) a written assessment by the assessor that surveillance and reporting gaps, if any, do not materially impair detection of conduct prohibited by § 401; and (v) a written commitment that the covered operator will reinstate an independent monitor within thirty days if the assessor identifies material gaps in a subsequent annual review under § 604(c) or if an incident under § 603(e) occurs. (b-3) Sunset and re-evaluation.** The waiver pathway in paragraph (b-1) shall sunset on [date 36 months from the effective date of these Standards] unless, before that date, an adopting regulatory authority or the Institute publishes evidence that covered operators operating under a waiver have experienced materially lower rates of undetected market abuse, manipulation, or settlement disputes as compared to operators maintaining an independent monitor, or that assessor-driven reinstatement has proven as effective as baseline monitoring in preventing such conduct. If no such evidence is published, the independent monitor requirement in paragraph (b) shall become mandatory for all covered operators without a waiver in effect as of the sunset date." Retain the current § 405(b) text (the independent monitor's scope, deliverables, and reporting obligations) as a new paragraph (b-4), to be operative for all covered operators not holding a valid waiver under paragraph (b-1).

Objections: - The Derivatives Regulator: Defect - The draft replaces the mandatory independent integrity monitor with a waiver pathway and sunset that would allow registered DCMs to operate without an independent monitor based on an assessor waiver. This conflicts with the surveillance and market‑integrity obligations a DCM already carries under the Commodity Exchange Act and 17 C.F.R. Part 38 (i.e., the statutory and Part 38 requirements that a DCM maintain an effective, independent surveillance and compliance program and make related reports and records available to the Commission). Allowing an assessor‑granted waiver that relieves a registered DCM of an independent monitor without Commission involvement would put PMCPS‑M out of alignment with those federal obligations. Fix - Limit the waiver pathway to non‑registered covered o - The Exchange Operator: Defect - Requiring that "each surveillance rule has detected at least one true positive and one false positive in the preceding twelve months" is impracticable and risks perverse incentives: (a) establishing "true positive" requires adjudicated ground truth that may not exist, and (b) newer but valid rules would be excluded. Also the assessor‑reliance model (revocation triggers, 30‑day reinstatement) lacks a practicable evidence standard. Fix - Replace the strict historical detection‑count requirement with an outcomes‑oriented validation standard: accept (i) historical detections where an incident was triaged to confirmed outcome with timestamps, or (ii) documented validation tests (seeded incidents, red‑team exercises, or retrospective labelled backtests) showing detection/false‑alarm rat - The Settlement and Integrity Specialist: The waiver pathway in paragraph (b-1) grants an assessor discretion to waive the independent monitor requirement based on "equivalent protection," but the evidence standard in (b-2) does not define equivalence. Specifically, subparagraph (b-2)(iv) requires "a written assessment by the assessor that surveillance and reporting gaps, if any, do not materially impair detection"-but this is the assessor assessing itself, since the assessor is also responsible for §604(c) annual reviews. This creates a conflict: the same person who grants the waiver will later determine whether to revoke it. Amend (b-1) to require that the waiver decision be made by a different assessor than the one who conducts the §604(c) annual review, or require that the waiver assessment be performed by an independent third

Amended to: Replace PMCPS-M § 405(b) in its entirety with the following text: "(b) Baseline: Independent integrity monitor. A covered operator shall engage an independent integrity monitor that is not an affiliate and has no financial interest in the covered operator's trading volume, unless the covered operator obtains a written waiver from its assessor under paragraph (b-1). (b-1) Waiver pathway - scope and applicability. An assessor may grant a written waiver of the independent monitor requirement only to a covered operator that is not a registered designated contract market under the Commodity Exchange Act and 17 C.F.R. Part 38. A non-registered covered operator seeking a waiver shall demonstrate, by producing evidence specified in paragraph (b-2), that automated surveillance under § 405(a) and the disclosure and incident reporting under § 405(a-1) and § 405(c) provide equivalent protection against the harms addressed by this section. A waiver is valid for twelve months and requires annual renewal. An assessor shall revoke a waiver and require reinstatement of an independent monitor within thirty days if (i) an incident under § 603(e) reveals conduct prohibited by § 401 that the covered operator's surveillance did not detect, (ii) the covered operator fails to complete an accepted remediation plan, or (iii) the assessor's annual assessment under § 604(c) identifies material gaps in surveillance rule coverage, detection accuracy, or mean time to respond. (b-2) Evidence required for waiver. A covered operator seeking a waiver shall provide the assessor with (i) the surveillance methodology and rulebook under § 405(a-1), demonstrating that each surveillance rule has either (A) detected conduct in the preceding twelve months that was triaged to a confirmed outcome with documented timestamps, or (B) been validated through documented testing (including seeded incidents, red-team exercises, or retrospective labelled backtests) showing the rule's capacity to detect both true positives and false alarms; (ii) mean time to detect and mean time to respond metrics for each surveillance rule, with comparison to industry benchmarks where available; (iii) the incident reports filed under § 405(c) in the preceding twelve months, with remediation records; (iv) a written assessment by an assessor other than the one who will conduct the § 604(c) annual review that surveillance and reporting gaps, if any, do not materially impair detection of conduct prohibited by § 401; and (v) a written commitment that the covered operator will reinstate an independent monitor within thirty days if the assessor conducting the § 604(c) annual review identifies material gaps in a subsequent annual review or if an incident under § 603(e) occurs. (b-3) Sunset and re-evaluation. The waiver pathway in paragraph (b-1) shall sunset on [date 36 months from the effective date of these Standards] unless, before that date, an adopting regulatory authority or the Institute publishes evidence that covered operators operating under a waiver have experienced materially lower rates of undetected market abuse, manipulation, or settlement disputes as compared to operators maintaining an independent monitor, or that assessor-driven reinstatement has proven as effective as baseline monitoring in preventing such conduct. If no such evidence is published, the independent monitor requirement in paragraph (b) shall become mandatory for all covered operators without a waiver in effect as of the sunset date. (b-4) Independent monitor scope, deliverables, and reporting obligations. [Retain current § 405(b) text], to be operative for all covered operators not holding a valid waiver under paragraph (b-1)." Author: ** This amendment addresses three objections: On the Derivatives Regulator's objection: Paragraph (b-1) now explicitly limits the waiver pathway to non-registered covered operators, preserving the mandatory independent monitor for any operator subject to 17 C.F.R. Part 38. This removes the conflict with federal DCM obligations and keeps PMCPS-M in alignment with statutory requirements. On the Exchange Operator's objection: Paragraph (b-2)(i) replaces the rigid "one true positive and one false positive in the preceding twelve months" requirement with an outcomes-oriented alternative: ei