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CFTC Opens Equity Perps Trading and Gets Sued Hours Later
The CFTC's approval relies on a 2000 law that created a joint framework for products sitting between commodity and securities regulation.
Dextape brief
The Commodity Futures Trading Commission has approved perpetual futures tied to individual American stocks for listing on its registered exchanges. Chairman Michael Selig announced the move on November 3. He said these contracts are classified as security futures products under a 2000 law, so they fall under both commodity and federal securities rules. Exchanges must also notify the Securities and Exchange Commission. Selig linked the decision to a memorandum of understanding between the two agencies signed earlier this year. Afterward, the Capital Markets Alliance, a group backed by Cboe and Citadel Securities, sued. It argues the CFTC exceeded its legal authority and intruded on the SEC's jurisdiction over stocks. A CFTC spokesperson called the case troubling. CME Group previously said it would challenge the earlier Bitcoin perpetuals approval.
Why it matters: The decision would let US traders reach stock perpetuals without offshore venues, and the lawsuit puts the division of authority between the CFTC and SEC in dispute.
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