Washington’s two market regulators are usually at odds over jurisdiction. This time, one is backing the other in court.
The SEC has submitted an amicus brief in support of the Commodity Futures Trading Commission, which faces a lawsuit over its approval of single-stock perpetual futures. The suit was brought by the Capital Markets Alliance Association, an industry group whose members include Cboe and Citadel Securities.
The case has implications beyond a single product. It concerns which agency has authority over a new type of derivative linked to individual stocks. It will also determine whether crypto-native venues such as Coinbase Derivatives and Kalshi can list the contracts.
What the lawsuit is actually about
First, the product itself. A conventional futures contract has a deadline: it expires on a specified date, when the trade settles. A perpetual future has no expiry date, allowing a position to remain open indefinitely.
The CFTC approved these single-stock contracts following a 45-day review under its Regulation 40.3. It classified them as security futures under the Commodity Futures Modernization Act of 2000. That classification lets them trade on exchanges that satisfy the applicable requirements.
The Capital Markets Alliance Association disputes that classification. Filed on November 3, 2026, its lawsuit names the CFTC and its chairman, Michael S. Selig. The group says the contracts are actually security-based swaps, putting them under SEC jurisdiction.
The argument turns on delivery. A traditional futures contract creates an obligation to deliver at a future date. The plaintiffs say a contract without an expiration date never creates such an obligation. If nothing ever comes due, they argue, calling the contract a future stretches the definition too far.
The court has already offered an initial assessment, with a mixed outcome for both sides. It indicated that the plaintiffs are likely to succeed on their argument that the products are security-based swaps. But it denied their request for a temporary restraining order, finding they had not demonstrated irreparable harm.
Who lined up on which side
The SEC’s brief is notable in part because it challenges the plaintiffs’ framing. The lawsuit argues that these products should be overseen by the SEC. The SEC has now told the court it supports the CFTC’s approval.
Security futures already occupy an unusual position: both agencies oversee them, an uncommon arrangement in US market regulation. The SEC’s support suggests the agencies are, for now, comfortable with that shared oversight.
Other amicus briefs have come from expected camps. Coinbase Derivatives and Kalshi filed briefs backing the CFTC. Better Markets and a group of former SEC officials filed briefs against the approval.
The crypto connection is apparent in the list of eligible venues. Coinbase Derivatives, KalshiEX and Bitnomial Exchange are among the platforms that could list these contracts. Two of the firms are also supporting the CFTC in court, making their interest in the outcome easy to understand.
The incumbents versus the newcomers
The plaintiff group’s membership is notable. Cboe operates major US options and equities venues. Citadel Securities is one of the largest market makers in US stocks.
Those defending the approval largely come from the crypto and prediction-market sectors. Coinbase Derivatives and Kalshi built their US businesses under CFTC oversight. Bitnomial operates under the same regulatory framework.
Implications for markets and platforms
If the plaintiffs prevail and the contracts are classified as security-based swaps, the regulatory landscape would change substantially. Securities rules generally provide stronger investor protections than the framework currently applied to these products. That could lead to greater scrutiny of how the contracts are offered and who can access them.
For platforms such as Coinbase Derivatives, Kalshi and Bitnomial, that could mean revising or withdrawing a product line approved through the CFTC process.
The court’s preliminary signal is the key uncertainty to watch. A judge who believes the plaintiffs are likely to prevail on the merits has not yet ruled on the merits themselves. Platforms listing these products are operating in that uncertainty, with approval in place but a legal question unresolved.
The SEC’s brief strengthens the CFTC’s position, but courts interpret statutes, not agencies’ preferences. The definition of a future under the 2000 law will likely carry more weight than any regulator’s comfort with the outcome.
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