River Markets expects to begin accepting institutional customer funds within weeks after its affiliated River Finance LLC secured federal futures commission merchant (FCM) registration.
The National Futures Association (NFA), which handles registrations on behalf of the Commodity Futures Trading Commission (CFTC), approved River Finance’s FCM registration and NFA membership on Nov. 5. The approval will allow the existing prediction market prime brokerage to expand its services beyond trade execution and technology into handling customer funds.
“The FCM registration is a major step toward building the institutional infrastructure prediction markets need,” River Markets co-founder and CEO Oscar Levy told NEXTPredict.io.
“River Markets already provides execution, market data, and portfolio visibility across exchanges. River Finance, our registered affiliate, is intended to add the regulated customer-funds and clearing layer, so firms can trade without managing a separate funding and operational setup at each exchange.”
Levy said River Finance expects to begin accepting customer funds “in a few weeks,” initially offering custody, execution and round-the-clock transfers between exchanges. Financing is also a priority, while the introduction of cross-margining services will depend more heavily on regulatory developments.
In a Nov. 9 post on X, Levy described the registration as River Markets’ “biggest milestone to date,” claiming River Finance had completed “the fastest FCM registration” in the CFTC’s recent history.
River builds on existing prime brokerage platform
River Markets launched its institutional trading platform in May, providing hedge funds, proprietary trading firms and market makers with access to multiple prediction market exchanges through a single system.
Its existing services include smart order routing, trade execution, risk management and market data. Customers maintain their own accounts at individual exchanges, while River’s technology allows them to compare prices, execute trades and monitor positions across venues.
In an Oct. 21 interview with Prediction Markets Report, Levy explained that River helps institutional customers establish exchange accounts before connecting them through its platform.
The company uses algorithms to identify comparable contracts across exchanges, accounting for differences in settlement rules, before routing orders to venues offering the best available execution.
Levy said the technology can get trading firms operational in under a week, compared with the six to 12 months they might otherwise spend developing their own infrastructure.
River currently operates on a software-as-a-service model, charging tiered platform access fees for its trading interface, application programming interface (API), risk management and data services.
Levy said that while exchanges increasingly seek to control the entire retail trading experience, institutional customers have different priorities.
“We cannot have best price discovery if we don’t have access to all of the liquidity pools, and really that’s the direction in which we are going,” he said.
River Markets expands institutional reach
River Markets was founded by Levy and fellow quantitative trader Antonin Parrot, who began developing prediction market trading algorithms while working in traditional finance.
In the October podcast interview, Levy said the pair became major market makers in their trading niches before recognizing the need for infrastructure to support institutional participation.
“So we really realized the need for an intermediary layer for both market access and capital efficiency. And that’s exactly what we set out to build with River Markets,” he said.
The company announced an $8.5m seed funding round in August, led by Haun Ventures with participation from Y Combinator, Coinbase Ventures and other investors.
River has since expanded its connections to prediction market exchanges. On Oct. 20, it announced an agreement with Crypto.com Exchange and OG.com to provide institutional traders with access to OG.com’s federally regulated event contracts and Crypto.com’s digital asset liquidity.
The agreement was structured as a memorandum of understanding, with the integrations planned rather than fully launched at the time of the announcement. River said its technology had already routed more than 150 million contracts.
A week later, River added Novig to its institutional trading platform, allowing clients to access the exchange through its existing terminal and API alongside Kalshi, Polymarket, Polymarket US and Crypto.com.
River targets growing institutional prediction market sector
River’s strategy partly depends on the continued expansion of federally regulated prediction market exchanges, which maintain separate pools of liquidity and customer accounts.
In the October podcast interview, Levy said he expects more designated contract markets (DCMs) to enter the industry, creating additional opportunities for firms that can connect trading activity across competing venues.
River’s customers already include both prediction market-native trading firms and traditional financial institutions looking to enter the sector.
Levy also identified the fully collateralized nature of prediction market contracts as an obstacle for institutional participants, particularly those holding positions tied to events months or years in the future.
The company’s plans for financing and other brokerage services could help address some of those capital constraints as institutional participation grows.
“For us, it’s very clear that the volumes are going to keep on growing, sophistication is going to keep on growing, and we are confident that we are going to be the link between institutional capital and prediction markets over the coming years, and we’re very excited to fill this gap,” Levy said.