US Regulators Launch Derivative Review Amid Perpetual Futures Dispute

The US Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) have launched a joint review of derivative regulations, seeking public comments on key aspects of derivatives definition and interpretation. This move aims to bring clarity to the financial markets, which have seen the emergence of crypto derivatives among others.

The regulators are asking for comments from the public on topics such as definitions of 'swaps' and 'security-based swaps,' as well as how new financial products should be treated under existing regulations. CFTC Chairman Michael S. Selig stated that this consultation will help address unanswered issues related to Title VII of the Dodd-Frank Act, fostering healthy competition and responsible innovation.

SEC Chairman Paul Atkins also endorsed the initiative, highlighting the need for clarity in definitions, particularly with regards to event-based products. The review comes amid a growing dispute between the CFTC and SEC over perpetual futures, with CME Group suing the CFTC over its approval of Kalshi's perpetual futures contracts.