CFTC and SEC have requested public input on the definitions of swaps and other derivatives.
The regulators’ actions come amid a conflict with the Chicago Mercantile Exchange (CME Group). On June 17, CME CEO Terrence Duffy announced plans to sue the CFTC. The issue arose after the agency allowed the Kalshi platform to launch perpetual futures.
The regulators aim to clarify rules for new financial products, including prediction market contracts and perpetual futures. They seek to determine if current regulations align with the evolving market structure.
CFTC Chairman Michael Selig stated that the initiative will help eliminate uncertainties in the Dodd-Frank Act that hinder fair competition.
His SEC counterpart, Paul Atkins, added that clarifying rules for event contracts is long overdue.
The feedback period will last 60 days.
A CFTC representative told The Block that the lawsuit is “unfounded” and accused CME of attempting to stifle progress through litigation. According to the representative, dominant players are simply afraid of fair competition.
Representatives from the decentralized exchange Hyperliquid joined the criticism. The Hyperliquid Policy Center stated that CME controls about 92% of the U.S. derivatives market and is trying to maintain its monopoly.
“Americans have been going offshore for years to trade perpetual futures. This is the first truly new product on the regulated U.S. market in a decade. Competition benefits users, and innovation deserves clear rules,” the organization noted.
Earlier, in May, the CFTC admitted that its lawsuit against Gemini was erroneous. The Commission stated that the methods of its previous leadership were “inappropriate.”
