Wealthsimple‘s new prediction markets app lets users bet on corporate figures before companies report them, raising fresh insider-trading concerns among securities lawyers. Markets include whether Dollarama, Loblaw and Lululemon will beat or miss their upcoming same-store sales, how Air Canada‘s passenger load factor will come in, and where Shopify‘s merchandise volume will land.
Gregory Hogan, a partner in Cassels Brock & Blackwell’s capital markets group, called these “very attractive bets for someone who might have that information ahead of time.” Adam Garetson, a partner at Gowling WLG, added more bluntly that Canada’s insider-trading laws “weren’t built for prediction markets.”
Dollarama, Loblaw and Air Canada each said their existing employee codes already bar staff from misusing confidential information; Air Canada added that it monitors emerging trends and updates its code as needed. Shopify pointed to rules that block employees from using inside information for personal gain.
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Wealthsimple says it safeguards against this, checking trading through KYC screening on every account and independent monitoring by its exchange and clearing partners, and keeping anyone suspected of holding non-public information about a market from trading on it.
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But the banks are being more cautious — RBC now prohibits any employee bound by its personal trading rules from wagering on prediction markets, while Scotiabank bars staff from using the platforms to speculate on markets, indices or individual companies. BMO says its conduct rules already address misuse of non-public information.
The Canadian Investment Regulatory Organization authorized Wealthsimple to offer event contracts in March; Interactive Brokers Canada had received similar approval the year before. The regulator limited the category to economic, environmental and financial indicators, ruling out bets on sports, politics or entertainment, and has said its scrutiny centers on whether Wealthsimple maintains adequate controls, supervision and monitoring.
Wealthsimple launched the app in late July, giving Canadians access to roughly 4,000 event contracts through a partnership with the US exchange Kalshi.
