CFTC Opens Equity Perps Trading and Gets Sued Hours Later

On November 3, CFTC Chairman Michael Selig said the agency approved perpetual futures tied to individual US stocks, called equity perps, under Regulation 40.3. They are classified as security futures products under the Commodity Futures Modernization Act of 2000 and subject to the Commodity Exchange Act and federal securities laws, with listing exchanges required to notify the SEC. Soon after, the Capital Markets Alliance, backed by Cboe and Citadel Securities, sued, saying the CFTC lacked congressional authority and invited a parallel synthetic stock market outside what it considers the SEC's exclusive jurisdiction. The dispute follows CME Group's June statement that it would sue the CFTC over Bitcoin perpetuals, with CEO Terrence Duffy arguing such contracts should be swaps under Dodd-Frank.