H.R. 10951: No Bets on Wildfires Act

This bill would amend federal commodities law to stop regulated trading platforms from offering certain financial contracts tied to wildfires.

What it would do

• It adds a new rule under the Commodity Exchange Act saying that a registered entity cannot list, trade, or clear any agreement, contract, transaction, or swap that involves a wildfire.
• The ban applies to wildfire-related contracts “caused by whatever means,” meaning it would cover wildfires regardless of how they start.
• In practical terms, this would prevent regulated derivatives markets from offering products that let people bet on or hedge wildfire-related outcomes.

Plain-English effect

The bill would make it illegal for certain federally regulated trading venues to offer financial instruments whose value depends on wildfires. These kinds of contracts can sometimes be used to manage risk, but they can also function like bets on whether a wildfire will happen or how severe it will be.

What it would not do

• It would not directly ban all wildfire-related financial activity in the broader economy.
• It would not prohibit insurers, property owners, or others from responding to wildfire risk in other ways outside of these regulated trading contracts.
• It would only apply to contracts offered through entities covered by the Commodity Exchange Act and this section’s requirements.

Relevant Companies

None found