Brazil Launches Predictive Derivatives Market Following SEC Approval

Key Points

• Brazil’s SEC approved predictive derivatives for B3 listing. Sports markets cannot participate.
• B3 targets Q1 2026 for product launch. Investors need R$10m (€1.6m) minimum to participate.
• Binary options will track US dollar movements. Ibovespa index and Bitcoin also serve as underlying assets.
• Contracts require opposing positions between traders. Winners receive R$100 in matched scenarios.
• Law No. 14,790/2023 governs sports-based outcomes. People call this the Bets Law.

Brazil prepares to launch predictive derivatives. The Securities and Exchange Commission approved the first products for the B3 exchange listing. This marks a shift in financial market regulations.  will introduce these products within months. Valor International reported this development this week. Sports markets remain excluded from approved structures. Legal classifications create these boundaries. Brazil lacks specific laws for prediction market segments. Regulatory oversight stays divided between agencies.

Regulatory Framework, Product Structure, and Trading Boundaries

The SEC classified financial indicator markets as derivatives. Sports markets fall under different legal systems. B3 will launch predictive market derivatives in Q1 2026. Professional investors with R$10m (€1.6m) can access these contracts. Binary options connect to the US dollar, the Ibovespa index, and Bitcoin. Investors choose yes or no outcomes. Traders might bet on the US dollar dropping below R$5. Others could wager on Ibovespa exceeding 200 points monthly. One investor stakes R$40 on Ibovespa reaching 200 points in March. Another investor places R$60 against this outcome. The winner collects the full R$100. B3 president Gilson Finkelsztain sees these as financial instrument extensions. Institutional investors control most market activity. Individual participation grows as access improves. Masagão calls binary contracts simple entry points for investors.

Brazil Classifies Sports Prediction Markets as Betting Activities

Brazilian regulators treat sports prediction markets as betting activities. Securities and lottery laws create this division. Payouts based on uncertain future events qualify as lottery activities. Financial derivatives need specific criteria to avoid this classification. Sports matches lack underlying financial assets. The SEC cannot regulate them as securities. Platforms offering sports outcomes follow Law No. 14,790/2023. This Betting Law defines fixed-odds betting systems. Bettors know exact returns relative to stakes during transactions. Regulators view prediction market shares similarly to fixed-odds bets. Fixed payouts make them functionally identical. Companies presenting as exchanges still face betting regulations. The Secretariat of Prizes and Betting oversees sporting contracts. Private companies like Futuriza test regulatory boundaries. They plan to launch next month without betting labels. These platforms copy the Kalshi model for operations. They claim to offer derivatives rather than betting products. Brazilian courts haven’t ruled on these arguments yet.