Robinhood Secures CFTC Licenses to Build Proprietary Futures Exchange

This transaction grants Robinhood immediate access to critical federal regulatory licenses. The new entity will operate as a joint venture and is scheduled to commence trading operations in 2026.

Acquiring the License Stack

The strategy relies on purchasing existing regulatory approvals rather than building them from the ground up. By acquiring MIAXdx, the joint venture secures status as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO) under the oversight of the Commodity Futures Trading Commission (CFTC).

In the trading ecosystem, a DCM license allows an entity to operate the exchange where buyers and sellers meet. The DCO license authorizes the entity to clear and settle those trades, effectively managing the transfer of funds and contracts.

Controlling both the exchange and the clearinghouse allows Robinhood to manage the entire lifecycle of a trade, from execution to settlement, without relying on external third-party infrastructure.

The structure of the new exchange involves three key participants:

• Robinhood: Serves as the controlling partner, providing the user base and front-end distribution.

• Susquehanna International Group (SIG): Joins as a primary partner and day-one liquidity provider. SIG’s role is to act as a market maker, ensuring there is consistent buy and sell interest to facilitate smooth execution for retail traders.

• MIAX: Retains a strategic interest in the platform through a 10% equity stake in the new exchange.

Scaling the Prediction Sector

The driving force behind this infrastructure expansion is the rapid adoption of prediction markets. This asset class allows users to trade contracts based on the outcome of specific events, such as elections, economic data releases, or weather patterns, rather than the price of a stock or commodity.

According to company data, prediction markets have become Robinhood’s fastest-growing product line by revenue. In the single year since the product launched, the platform has recorded 9 billion contracts traded across more than one million unique customer accounts.

JB Mackenzie, VP and General Manager of Futures and International at Robinhood, noted that the investment in proprietary infrastructure is a direct response to this “strong customer demand.”

By owning the exchange, Robinhood gains the ability to list new types of contracts at its own pace. Currently, brokers must wait for third-party exchanges to certify and list event contracts.

With a proprietary DCM, Robinhood can design, self-certify, and list new markets faster, offering a wider variety of “Yes/No” event contracts to its user base.

The exchange will not be exclusive to Robinhood; it plans to service other Future Commission Merchants (FCMs) as well.