Clear Street’s Kalshi partnership follows planned March clearing start

Clear Street’s anticipated late-March start for clearing Kalshi trades is no longer a future milestone. The firm announced a strategic partnership with the prediction-market exchange on May 1, becoming the first institutional Futures Commission Merchant to join Kalshi’s exchange and clearing house.

The earlier timetable, reported by Hedgeweek, said Clear Street was preparing to provide institutional clients access to Kalshi’s markets and expected to begin clearing trades in late March. Clear Street’s subsequent announcement does not state whether clearing began on that timetable, but says the partnership provides institutional trading access, regulated clearing and settlement, block trading for large risk transfers, and swap solutions for ETF issuers.

Clear Street said its institutional clients had sought clearing, risk-management and swap-product capabilities for prediction markets. Its platform is intended to place those products on the same infrastructure as its equities, options, futures, fixed-income, derivatives and digital-asset businesses.

Kalshi’s event contracts operate around the clock, according to Clear Street. Such contracts allow investors to trade on the outcomes of economic, political and other real-world events, while Kalshi has presented them as tools for both forward-looking information and investment-risk management.

The move reflects growing hedge-fund interest in event-based trading. Hedgeweek reported that Marex Group was separately preparing to offer institutional access to Kalshi in the months after Clear Street’s expected late-March start, after large hedge funds approached Marex seeking prediction-market access.

Institutional adoption still faces regulatory uncertainty. State regulators have challenged prediction-market operators under gambling laws, while concerns over insider trading and the treatment of event contracts have prompted calls for clearer oversight. The Commodity Futures Trading Commission has asserted primary jurisdiction over the sector, while the Securities and Exchange Commission has indicated interest.

Kalshi is the largest federally regulated prediction market overseen by the CFTC, according to a Federal Reserve paper published in February. Its authors found that Kalshi markets can provide a high-frequency, continuously updated and distributionally rich benchmark for macroeconomic expectations, with potential value to researchers and policymakers.