Capital Markets Alliance sues over CFTC approval of stock perpetual futures

The Capital Markets Alliance (CMA) has filed a lawsuit in the U.S. District Court for the Southern District of New York to challenge the Commodity Futures Trading Commission (CFTC) decision to allow perpetual futures on individual stocks. The CMA, which includes members such as Cboe, Citadel Securities, and the Healthy Markets Association, argues that these products bypass existing securities regulations.

Perpetual futures are derivatives without an expiration date, allowing investors to maintain positions without renewing contracts. While the CFTC maintains that this move supports market innovation and risk management, the CMA contends that these contracts should be classified as security-based swaps under the jurisdiction of the Securities and Exchange Commission (SEC) rather than as commodity futures.

The CFTC has responded by stating that the lawsuit attempts to hinder market innovation. The agency noted that exchanges providing these products must also file with the SEC, suggesting that the move does not bypass regulatory oversight. This legal dispute marks a significant clash between traditional financial regulations and trading structures popularized in the cryptocurrency markets.