Stock perpetual futures face a federal lawsuit seeking to overturn their U.S. approvals. The Capital Markets Alliance sued the Commodity Futures Trading Commission (CFTC) on November 3. Its members include Cboe Global Markets and Citadel Securities.
The lawsuit followed CFTC Chairman Michael Selig’s announcement earlier on November 3. He said stock perpetual futures could begin trading on qualifying U.S. exchanges.
Alliance Challenges Regulatory Classification
The Southern District of New York case seeks to halt trading during litigation. The alliance argues perpetual futures are security-based swaps under exclusive Securities and Exchange Commission (SEC) oversight.
The lawsuit also alleges Administrative Procedure Act violations. It cites unexplained approvals and inadequate assessment of investor and market risks. Alliance secretary Adam Ford warned that bypassing established rules weakened investor protections.
CFTC Defends Stock Perpetual Futures Framework
Selig said perpetual futures were deemed approved as security futures. He cited the Commodity Futures Modernization Act of 2000 and joint CFTC-SEC oversight. Eligible exchanges must also file a registration notice with the SEC before trading security futures.
Traders use stock perpetual futures for leveraged exposure without share ownership or fixed expiry dates. Selig said regulated U.S. trading offered an alternative to offshore platforms.
A CFTC spokesperson criticized the lawsuit as interference with regulated markets. The dispute follows CME Group’s June challenge to crypto perpetual contracts offered by Kalshi and Coinbase.
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