Cboe and Citadel backed group sues CFTC over US stock perpetual futures approval

The Capital Markets Alliance argues that perpetual derivatives tied to individual stocks fall under SEC jurisdiction rather than the CFTC's authority. The Capital Markets Alliance, an industry group backed by Cboe and Citadel Securities, filed a federal lawsuit Tuesday challenging the Commodity Futures Trading Commission’s approval of perpetual derivatives tied to individual US stocks. The lawsuit, filed in the US District Court for the Southern District of New York, seeks to overturn the approvals and prevent the CFTC from allowing the contracts to trade while the case proceeds. The group argues that the products qualify as security based swaps, placing them under the Securities and Exchange Commission’s exclusive jurisdiction. It also claims the CFTC violated the Administrative Procedure Act by failing to explain its decision or adequately consider the impact on investors and securities markets. “The hasty roll out of financial products that circumvent well established regulatory frameworks erodes investor protection and undermines the integrity and resiliency of the American financial system,” said Adam Ford, secretary of the Capital Markets Alliance. CFTC defends approval of st...