Cboe, Citadel-backed group sues US regulator over single-stock 'perps'
CBOE•The Capital Markets Alliance, backed by Cboe and Citadel Securities, sued the CFTC to block it from authorizing perpetual futures contracts on individual companies’ stocks. The CFTC said properly registered markets could begin trading the contracts on Tuesday.
1. Lawsuit challenges CFTC
The Capital Markets Alliance filed a federal lawsuit seeking to block the CFTC from authorizing perpetual futures contracts on individual companies’ stocks. The lawsuit says the CFTC sidestepped laws enacted by Congress and invited a synthetic market in US stocks to grow outside the SEC’s exclusive jurisdiction.
2. Contracts and response
Perpetual futures have no expiry date, allowing traders to hold positions indefinitely without rolling them over, and can involve high leverage that increases potential gains and losses. A CFTC spokesperson called the lawsuit “troubling” interference with CFTC-regulated markets and said markets should be governed by law, not litigation campaigns intended to block innovation.
