Cboe-Backed Coalition Sues CFTC to Scrap Single-Stock Perps Approvals

The Capital Markets Alliance took the Commodity Futures Trading Commission to court on Nov. 3, trying to tear up approvals that let Coinbase Derivatives, KalshiEX and Bitnomial Exchange list single-stock perpetual contracts. The trade group filed in the Southern District of New York under case number 1:26-cv-09608. Its members include Cboe, Citadel Securities and the Healthy Markets Association, and Cboe confirmed it is part of the fight in a separate statement.

The alliance's core argument: these products are security-based swaps, which puts them under the SEC's exclusive jurisdiction. Because the contracts never expire and carry no obligation to deliver the underlying stock in the future, CMA says they are swaps, not futures. It also accuses the CFTC of violating the Administrative Procedure Act by failing to explain the classification, square it with how it treated perpetuals before, or properly weigh risks to investors and securities markets.

The timeline matters here. The applications were filed Sept. 18, and per the complaint the CFTC's 45-day review clock ran out on Nov. 2 with no rejection and no extension. CFTC Chairman Michael Selig confirmed a day later that the equity perps were deemed approved under Regulation 40.3 and could start trading.

Selig sees it differently. In his approval-day statement he said the contracts are security futures, sitting under both CFTC and SEC frameworks, and that eligible exchanges must notice-register with the SEC to offer them. So the real scrap is about which securities regime runs the show, not whether the SEC gets a seat at the table.

What CMA wants is blunt: vacate the approvals and declare the products security-based swaps. It is asking for a temporary restraining order plus preliminary and permanent injunctions, and a stay that would freeze the approvals while the case plays out. The requested injunction also aims to block the CFTC from letting the same contracts slip in as security futures through another door, including exchange self-certification.

There is money on the line, and CMA says so in the complaint, arguing the new products could siphon off customers, transactions and revenue from its members' securities businesses. The ruling could ripple beyond these three applicants too. ICE and TradeXYZ aren't being challenged directly, but their separately announced plan for a U.S.-regulated perpetuals market built on Hyperliquid, equity markets included, still needs regulatory sign-offs, and ICE has said approval for leveraged trading is among them.