Polymarket has received approval from the National Futures Association for its affiliated entity, PM Derivatives, LLC, to operate as a Futures Commission Merchant. The broker will operate on a fully collateralised basis, requiring customers to fund their positions in full at the time of each trade.

The approval comes amid continued regulatory scrutiny of prediction markets in the US. In August, the Commodity Futures Trading Commission warned regulated firms against using American-style bookmaker odds to list, solicit or advertise derivatives.

It said prices should instead be displayed in nominal or percentage terms that reflect market pricing, warning that bookmaker-style formats could mislead customers about the nature of the contracts.

The registration completes three key components of Polymarket's US derivatives infrastructure: an exchange, a clearinghouse and a broker. Each function operates through a separate affiliated entity.

QCX LLC, doing business as Polymarket US, operates the exchange, while QC Clearing LLC serves as the clearinghouse. PM Derivatives will handle the brokerage function.

Its FCM status adds an intermediated layer to Polymarket's existing direct exchange model. The registration allows PM Derivatives to accept and carry customer orders and funds as a broker, subject to CFTC and NFA requirements.

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It also provides Polymarket with another regulated route to work with distribution partners.

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