Verdx seeks Canadian licence for prediction-market-only dealer

Verdx, a venture led by former Vanguard Canada chief executive Atul Tiwari, has applied to become an investment dealer and a member of the Canadian Investment Regulatory Organization, with the aim of creating a Canadian platform devoted exclusively to prediction markets.

The application is under regulatory review, with no timetable for either approval or a launch. If licensed, Verdx intends to operate as an order-execution-only dealer, facilitating customer trades without providing investment advice, and to serve both retail and institutional investors.

Prediction markets allow investors to trade event contracts whose payout depends on whether a specified future event occurs. Forecast contracts generally pay a fixed amount, commonly $1, if the event occurs and nothing if it does not.

Verdx would not run the exchange on which contracts are listed. It is seeking a host exchange because CIRO-approved event contracts must be traded and cleared through specified U.S. exchanges and clearing houses regulated by the Commodity Futures Trading Commission. The company intends to connect customers to qualifying contracts traded and cleared through regulated U.S. venues.

The Canadian market’s permitted products are narrow. Regulated dealers can offer contracts tied to economic indicators, financial markets and climate trends, while sports and entertainment bets fall outside the present securities-regulatory framework. Contracts generally must mature no sooner than 30 days and cannot use leverage; political and election contracts are prohibited under CIRO’s current conditions.

Verdx enters a market in which Interactive Brokers Canada received CIRO approval to offer forecast contracts in 2025. Wealthsimple has also confirmed it received approval but had not announced a launch, while Questrade is seeking similar permission.

Tiwari launched Vanguard’s Canadian business in 2011 and left in 2018, when it managed more than $30 billion. Before founding Verdx, he also helped establish and run BMO’s ETF business. He has compared the aggregation of views and probabilities in a prediction-market price with the aggregation of securities prices in an ETF.

Verdx’s operating team includes Jim Andriopoulos, previously chief financial officer at Wells Fargo, and Michael Williams, who held chief compliance and risk roles at Richardson Wealth and HSBC. Its advisers include former Ontario Securities Commission chair Ed Waitzer, NEO Exchange founder Jos Schmitt and former Royal Bank of Canada global chief compliance officer David Lang.

Tiwari said Verdx began largely as a self-funded venture and is raising seed capital through his network. The company plans educational modules on event contracts and their trading, and sees certain products, such as contracts linked to extreme weather, as potential hedges against costs including flood-related expenses or insurance deductibles.

CIRO’s order-execution-only guidance, published March 12, permits dealers to provide informative resources and decision-making supports where they do not endorse a particular investment decision and safeguards are in place. The rules retain the prohibition on recommendations.

The regulatory framework also includes restrictions. The Canadian Securities Administrators banned advertising and trading binary yes-or-no contracts with retail investors when they mature in less than 30 days in 2017. In 2025, the Ontario Securities Commission settled with Polymarket operators over non-compliance with that ban. The CSA and CIRO have said they continue to monitor the sector, may take further action and intend to issue additional guidance on the application of securities or derivatives law.

The global market has expanded rapidly. CertiK estimated that worldwide prediction-market trading rose from US$15.8 billion in 2024 to US$63.5 billion in 2025, while the Pew Research Center put combined monthly volume on Kalshi and Polymarket at US$53 billion in July. Tiwari estimated that Canadian annual trading volume could reach $40 billion to $50 billion within roughly five years.

Critics have raised concerns that prediction markets can blur investing and gambling and may create insider-trading risks. A Globe and Mail editorial argued that Canada should not broaden the market without clearer financial utility, pointing to a Canadian study that found gambling-disorder emergency-room visits nearly doubled after Ontario permitted private online-gambling platforms in 2022.