Wealthsimple will launch a prediction markets app in partnership with Kalshi Inc. this summer after securing approval from the Canadian Investment Regulatory Organization, becoming the country’s second investment dealer authorized to offer the contracts.
The Toronto-based firm received approval in March and follows Interactive Brokers Group Inc., which announced the launch of Canadian prediction markets more than a year ago. Wealthsimple manages more than C$100 billion ($72.4 billion) in assets under administration.
Through its standalone Wealthsimple Predict application, the company plans to offer nearly 4,000 contracts listed on the Kalshi prediction exchange. Wealthsimple will be authorized to provide trading on economic indicators, financial markets, and climate data, while determining which contracts are available to customers.
Market rules remain restrictive
Canada has taken a more limited approach to prediction markets than the United States. Trading on sports and election outcomes is not permitted, and all prediction market contracts must have a minimum settlement period of 30 days.
“We expect that the trajectory of this growth should be no different than what we’ve seen in the US and then around the world, given a lot of other financial products grow the same way in Canada,” Wealthsimple Vice President of Investing Products Swapnil Parikh said in an interview. “But we do expect that there’s a large burden on our side to provide the education to our customers as we introduce this asset class.”
Partnership brings Kalshi contracts to Canada
The launch will be carried out in partnership with Kalshi Inc., making Wealthsimple one of the first financial firms to offer the event contracts in Canada.
Prediction markets have grown globally in recent years, allowing participants to trade contracts tied to the outcome of real-world events through yes-or-no propositions.
Kalshi, which operates its own prediction markets platform, was valued at more than $22 billion in its latest funding round. The company has also entered partnerships with firms including Coinbase Global Inc. and Robinhood Markets Inc.
According to Piper Sandler, Kalshi and its largest global competitor, Polymarket, recorded more than $10 billion in combined trading volume during the week ending June 15.
“We wanted to work with a regulated exchange that trades futures that are approved by the CFTC,” Parikh said of Kalshi. “We are not trading on-chain; we are not trading through crypto markets. These contracts are no different than other futures contracts that exist in the US.”
Wealthsimple said it will monitor trading activity for signs of manipulative and deceptive conduct and report any concerns to securities regulators.
The company said Canadian securities regulators maintain relationships with their US counterparts and noted that Kalshi has safeguards designed to address such risks.
Insider trading has been one area of concern surrounding prediction markets. Before regulated offerings became available in Canada, some residents accessed these products through other channels.
Last year, the Ontario Securities Commission penalized Polymarket for allowing Ontario residents to use its platform between 2020 and 2023. Following the action, Polymarket parent company Blockratize Inc. received a two-year market ban in Canada’s most populous province.