Chapter 1. Purpose, authority and interpretation
These Rules govern participation in markets operated through Kapolly. They are intended to support fair access, transparent price formation, objective market outcomes, protection of participant assets and effective market integrity controls.
Kapolly may operate only the functions and jurisdictions for which it has a documented legal and regulatory basis. Nothing in these Rules represents that a licence has been granted where it has not.
1.1 Core definitions
| Term | Meaning |
|---|---|
| Authoritative Source | The source identified in a contract specification for determining the relevant outcome or value. |
| Contract | A standardised Kapolly event contract listed under these Rules. |
| Contract Rules | The market-specific terms, including question, outcome condition, source, timing, correction treatment and settlement method. |
| Exchange | The Kapolly market operating function provided by the approved legal entity for the relevant jurisdiction. |
| Member / Participant | A person or entity approved to use the trading services. |
| Market | An individual tradable YES/NO instrument with its own order book. |
| Order | A participant instruction to buy or sell a stated quantity at stated terms. |
| Position | A participant’s resulting economic interest in a Contract. |
| Restricted Person | A person prohibited or limited from trading a market under law, these Rules or a market-specific restriction. |
| Settlement Value | For a standard whole binary contract, $1.00 for the winning side and $0.00 for the losing side. |
| Trading System | The electronic system used to accept, prioritise, match, cancel and record Orders. |
Chapter 2. Governance and regulatory controls
- Kapolly will maintain clear responsibilities for market operations, compliance, surveillance, finance, technology, security and complaints.
- Material conflicts of interest must be identified, managed and recorded.
- Staff permissions must be role-based. A person who can draft a market should not unilaterally finalise a disputed outcome or alter customer balances.
- Emergency authority must be limited, logged and reviewable.
- Kapolly will maintain a country access register and may disable a country or product class independently.
Chapter 3. Admission of participants
Kapolly may approve, condition, limit or refuse participation based on legal eligibility, identity, country, sanctions, financial crime, market integrity, security, operational capability or other legitimate regulatory criteria.
Different permissions may apply to retail members, institutional members, authorised representatives and approved market makers.
3.1 Continuing obligations
- Maintain accurate KYC and account information.
- Protect authentication credentials and authorised user access.
- Comply with these Rules, contract rules, applicable law and lawful Kapolly instructions.
- Provide information reasonably required for compliance, surveillance or dispute review.
- Pay disclosed fees and settle valid obligations.
- Notify Kapolly when a conflict, source relationship or regulatory status changes.
Chapter 4. Market admission and contract design
No user may directly create a live tradable market. Suggestions may be submitted for review.
A market may open only after Kapolly approves legality, objective measurability, source quality, manipulation risk, insider risk, operational feasibility, economic purpose, wording and jurisdiction eligibility.
4.1 Minimum contract specification
- Plain YES/NO question.
- Exact condition that makes YES correct.
- Primary authoritative source and any permitted fallback.
- Opening and closing time or event condition.
- Expected determination time and latest resolution treatment.
- Correction, postponement, cancellation and disruption rules.
- Any early close condition.
- Applicable countries and restricted participant classes.
- Position, exposure or other market-specific limits.
4.2 Initial excluded categories
Unless a regulator expressly authorises otherwise, Kapolly’s initial live framework excludes sportsbook style markets, casino style products, lotteries, jackpots, parlays and entertainment first markets. Political, conflict, death, violence and other heightened public interest categories require separate legal, regulatory and market integrity approval before activation.
Chapter 5. Trading system and order execution
Orders must pass account, country, market status, balance, collateral, position, restricted person and technical validation before acceptance.
Standard price priority is best price first. Orders at the same price are prioritised by the time accepted by the Trading System, subject to any published order type rule.
5.1 Orders
- Kapolly may support marketable and limit orders and other order types disclosed before use.
- An unfilled order may be cancelled by the participant while cancellation remains technically and legally available.
- A cancellation request is not effective until confirmed by the Trading System.
- Kapolly may reject an order that is invalid, insufficiently funded, prohibited, outside limits, malformed or submitted while the market is not open.
5.2 Fully collateralised pair creation
When the matching process creates a new complementary YES and NO pair, the two sides must contribute exactly $1.00 of settlement collateral before fees for each whole pair. The system must reject any operation that would create an uncollateralised settlement obligation.
Secondary trading may transfer or extinguish existing exposure according to the ledger and matching rules, but it may not create hidden house exposure.
5.3 Market transparency
Kapolly will display appropriate current market information such as best available prices, recent activity, volume and market status, subject to technical limitations, data licences and applicable law.
5.4 Trading hours, pauses and maintenance
Market hours are determined by the contract rules and exchange status. Kapolly may pause one market, a product class, a country or the whole Trading System where required for orderly operation, security, legal compliance or a defined emergency.
Treatment of resting orders after a pause must follow the published system rule and any market-specific notice.
Chapter 6. Prohibited trading and conduct
- Fraud, deceit or material misrepresentation connected to trading.
- Manipulation or attempted manipulation of a market, source or outcome.
- Wash trading, circular trading, self dealing intended to create a false appearance of activity, spoofing or layering.
- Coordinated use of accounts to evade limits, surveillance or eligibility rules.
- Trading by a person who controls the outcome, holds material non-public information or is otherwise restricted.
- Misuse of confidential Kapolly or third party information.
- Interference with the platform, denial of service, unauthorised access or exploitation of a technical defect.
- Fraudulent funding, chargeback abuse, money laundering, sanctions evasion or other unlawful financial activity.
- Obstructing or knowingly misleading a Kapolly investigation.
Chapter 7. Position, exposure and risk controls
Kapolly may establish position limits, exposure limits, velocity limits, concentration controls, reporting thresholds and enhanced restrictions by market, participant class or country.
Kapolly may require information about a large or unusual position and may restrict new exposure where necessary for market integrity or legal compliance. Risk reducing actions must not be used to increase a participant’s exposure.
Chapter 8. Market outcome, review and settlement
Market outcome is determined from the published contract rules and authoritative source, not from the market price or Kapolly’s opinion about what should have happened.
The standard workflow is source capture, authenticity check, rule calculation, maker review, independent checker review, preliminary publication where applicable, dispute review, finalisation and settlement.
8.1 Corrections and extraordinary events
A source correction, postponement, cancellation, data failure, legal prohibition or material change in the underlying event will be handled under the contract rules. If the rules do not provide a workable answer, Kapolly may use the formal market review process, publish its reasoning and take only the action permitted by law and these Rules.
Chapter 9. Funds, fees and asset protection
Participant funds, exchange revenue, settlement collateral, pending deposits, pending withdrawals and reconciliation suspense must be separately identifiable in the financial books of record.
Kapolly will not treat customer money as exchange operating revenue. Any safeguarding, bank or custody structure required for an enabled jurisdiction will be disclosed as required by law.
Chapter 10. Market makers and institutional access
Kapolly may approve liquidity providers under a separate programme. Eligibility, quoting obligations, eligible markets, spreads, size, uptime, incentives, data access and limits must be documented.
Market maker status does not permit manipulation, wash trading, privileged access to non-public market outcomes or undisclosed house trading.
Chapter 11. Surveillance, investigations and enforcement
Kapolly will monitor orders, cancellations, fills, linked accounts, KYC information, market lifecycle events and funding patterns for signs of prohibited conduct or unusual risk.
Surveillance alerts do not by themselves establish misconduct. Material disciplinary decisions require review by authorised personnel under documented procedures.
11.1 Investigative powers
- Request relevant account, employment, beneficial ownership, funding or communication information where lawful.
- Preserve records and place proportionate temporary restrictions while an investigation is active.
- Coordinate with regulators, exchanges, payment providers or law enforcement where authorised.
- Cancel or correct orders and trades only where the Rules permit.
- Refer suspected offences or regulatory breaches to the competent authority.
11.2 Sanctions
- Warning or written direction.
- Market specific restriction.
- Position or exposure reduction where authorised.
- Trading or withdrawal hold.
- Suspension or termination of access.
- Fee, restitution or other financial consequence where permitted by law and agreed rules.
- Referral to a regulator, exchange, court or law enforcement.
Chapter 12. Complaints, market disputes and appeals
Kapolly will maintain accessible channels for complaints. A market outcome challenge must identify the market, disputed rule application and supporting source material and must be filed within the published review period.
A person subject to material disciplinary action will be given notice of the basis and a reasonable opportunity to respond, except where immediate temporary action is required to protect the market or comply with law.
Chapter 13. Operational resilience and emergencies
An emergency may include a serious cyber incident, market data corruption, payment system failure, material technical defect, external legal order, source failure or event that threatens fair and orderly operation.
Kapolly may pause affected functions, cancel invalid orders, extend review periods, restrict access or activate recovery procedures. Emergency actions must be logged, proportionate and reviewed.
Chapter 14. Records, confidentiality and regulatory reporting
Kapolly will retain searchable records of material orders, trades, balances, market rules, source snapshots, determinations, account restrictions, investigations and staff actions for the period required by applicable law and internal retention policy.
Confidential information may be shared with authorised regulators, courts, service providers, advisers and counterparties where lawful and necessary.
Chapter 15. Amendments, notices and hierarchy
Kapolly may amend these Rules prospectively subject to regulatory approval or notice requirements that apply. Material versions will be dated and archived.
Contract specific rules govern the determination of a particular market. These Market Rules govern exchange conduct. The Participant Agreement governs the contractual relationship with the user. Mandatory law prevails over all Kapolly documents.