- The stock perps approval was challenged within hours. A new group called the Capital Markets Alliance sued the Commodity Futures Trading Commission on Tuesday in the US District Court for the Southern District of New York, seeking to throw out the agency’s approval of single-stock perpetual futures. The suit was filed on the same day the CFTC announced the green light.
- Big names are behind it. A spokesman said the group’s members include Cboe, Citadel Securities and the Healthy Markets Association, and it says it is backed by leading exchanges, broker-dealers and investment firms. The lawsuit appears to be the only significant action the group has taken so far.
- The fight is over jurisdiction. The group argues stock perps are security-based swaps that belong under the Securities and Exchange Commission, and that the CFTC violated the Administrative Procedure Act by not explaining its policy or why it contradicts an earlier stance. American Securities Association CEO Chris Iacovella said the CFTC “sidestepped the SEC’s jurisdiction and Congress’ ban on selling security-based swaps to retail investors.”
- The CFTC is pushing back. “It is troubling that an anonymous group is seeking to use litigation to interfere with CFTC regulated markets,” an agency spokesman told CoinDesk. “Our markets should be governed by law, not litigation campaigns intended to block innovation.”
What Happened?
CFTC Chairman Mike Selig said Tuesday that the new policy “builds on that milestone by extending the availability of the perpetual futures contract instrument in the U.S. beyond digital commodities and into traditional securities.” The stock perps are designed to trade the same way as the agency’s recent roadmap for crypto perps. That move came about five months after the CFTC first cleared a path for bitcoin perps, hoping to bring a thriving overseas market to the US.
Why It Matters?
The lawsuit puts the CFTC’s broader push to bring perps onshore at legal risk just as it expands beyond crypto. It also pits established market players against the new product: CME Group sued over the earlier crypto perps decision, arguing that contracts with no end date are not really futures but swaps, which carry different regulatory treatment. If courts agree that stock perps are security-based swaps, they would fall under the SEC and face Congress’ ban on selling those products to retail investors, as the American Securities Association argues.
What’s Next?
The case will test whether the CFTC can defend its reading of the rules in federal court, and the agency’s answer on why the policy departs from its earlier stance will be central under the Administrative Procedure Act. Investors should watch for a request to pause the policy while the case proceeds, which could delay any exchange launches. The SEC’s response will also matter, since the dispute turns on which regulator should oversee the products.
Affected Tickers and Coins: CBOE, CME, BTC
Source: CoinDesk
