Securities Regulation Daily Wrap Up, DERIVATIVES—S.D.N.Y.: SEC says it’s reviewing CFTC’s approval of single-stock perpetual futures, (Nov 12, 2026)
The SEC said it “respectfully takes no position” pending a 60-day review of a CFTC approval of equity perpetual contracts.
The SEC has submitted a proposed amicus brief in a lawsuit challenging the CFTC’s recent approval of perpetual contracts on individual equity securities. The SEC said it is reviewing the CFTC’s approval pursuant to its own authority over security futures and currently takes no position on whether the CFTC rule changes should be abrogated and required to undergo notice-and-comment rulemaking (Capital Market Alliance Association v. CFTC, No. 1:26-cv-09608-LGS (S.D.N.Y. Nov. 9, 2026)).
The SEC said it generally coordinates and collaborates with the CFTC on “issues of common regulatory interest” including equity perpetuals, and that defining a product as a security future “does not create an end-run around the regulatory regime.”
The SEC said its review will run through December 31, 2026.
Challenge to CFTC approval. CFTC Chairman Michael Selig issued a statement on November 3 that perpetual futures contracts on individual equity securities were “deemed approved by the Commission” and could begin trading for the first time on CFTC-registered exchanges.
Immediately, the Capital Market Alliance Association, a trade association of exchanges and intermediaries, filed a lawsuit claiming that the CFTC’s approval violated the Administrative Procedure Act and threatened irreparable harm to the group, investors, and the public.
“By approving these products for trading without a word explaining how its action comports with the statutory framework, the CFTC has permitted an end-run around Congress’s deliberate statutory protections and invited a parallel, synthetic market in U.S. stocks to grow outside the exclusive jurisdiction of the Securities and Exchange Commission (SEC),” the group wrote.
Listing of equity perpetuals. The CFTC’s approval responded to a request on September 18 by three exchanges (Coinbase, KalshiEx, and Bitnomial) registered with both the CFTC and SEC seeking approval of rule changes to list “equity perpetuals.”
The exchanges described the products as providing “continuing cash-settled exposure to changes in the price of an individual stock and use recurring funding payments designed to keep the contract price aligned with the stock price.”
Equity perpetuals invoke both CFTC and SEC jurisdiction because they involve security futures, a distinct category of instruments under the joint jurisdiction of the CFTC and the SEC. Security futures are subject to certain restrictions including trading only on SEC-registered national securities exchanges or associations and dual-registration requirements for intermediaries.
Not an “end-run.” In its brief, the SEC said that defining a product as a security future “does not create an end-run around the regulatory regime as the Association claims.”
“That depiction—of a CFTC gone rogue, and an SEC gone missing—is mistaken,” the SEC wrote.
The SEC said it has “substantial” enforcement and regulatory authority over security futures, including “enforcing the central fraud, manipulation, and insider-trading prohibitions of the federal securities laws, overseeing the intermediaries that handle security futures transactions, and setting the rules governing their ongoing trading.”
SEC review. The SEC said the CFTC’s approval started a 60-day SEC review period that runs through December 31, 2026.
Within that time, the SEC may abrogate the rule change and require that it be refiled and reviewed under the SEC’s ordinary notice-and-approval procedures if it appears that the rule change “unduly burdens competition or efficiency, conflicts with the securities laws, or is inconsistent with the public interest and the protection of investors.”
“Because that review period has not yet closed, the SEC respectfully takes no position in this brief on whether the rule changes should be abrogated,” the SEC wrote.
The SEC noted that the exchanges also filed corresponding rule changes with the SEC and that it has published those filings for public comment. (See Coinbase Derivatives, KalshiEX, and Bitnomial.) The SEC had acknowledged receipt a few days earlier of notice filings by Coinbase, KalshiEX, and Bitnomial of registration as a national securities exchange.
This is case No. 1:26-cv-09608-LGS.
Attorneys: J. Russell McGranahan for the Securities and Exchange Commission.
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