The Securities and Exchange Commission and Commodity Futures Trading Commission have opened a joint review of key US derivatives rules. The agencies are seeking public feedback on how swaps, security-based swaps and newer financial products should be defined.
The request arrived as CME Group challenged the CFTC’s approval of perpetual futures for Kalshi and Coinbase. The dispute centers on whether contracts without expiry dates qualify as futures or should follow the separate rules that apply to swaps.
The SEC and CFTC announced the joint request for comment on June 18. It asks whether definitions created under Title VII of the Dodd-Frank Act still match current products, trading methods and market structures. The review covers swaps, security-based swaps, mixed swaps and products that combine features from several categories.
Regulators are also seeking views on exclusions from the swap definition, alternative compliance options and areas where the two agencies’ authority may overlap. The agencies said clearer definitions could reduce uncertainty for trading venues, clearing firms, brokers and other regulated companies.
SEC Chairman Paul Atkins said clarification was ‘long overdue’ for several Title VII matters, including event-based products. Meanwhile, CFTC Chairman Michael Selig said older uncertainties had ‘stifled fair competition and responsible innovation.’ Both statements indicate that the agencies may consider changes, although no final rule has been proposed.
The public comment period will remain open for 60 days after the request appears in the Federal Register. Exchanges, crypto companies, investor groups, legal experts and other interested parties may submit responses. Regulators will review those comments before deciding whether to issue guidance or propose new rules.
CME filed a lawsuit against the CFTC and Selig in federal court in Washington. The exchange operator wants the court to cancel the CFTC’s May 29 decision allowing Kalshi to list a cash-settled Bitcoin perpetual contract as a futures product.
The lawsuit also challenges a policy statement that allows regulated futures exchanges to offer similar contracts. On the same day, the CFTC said it would not object to Coinbase providing eligible US investors with access to perpetual futures offered through its foreign derivatives platform.
CME argues that perpetual contracts should be classified as swaps under Dodd-Frank. Unlike standard futures, perpetual contracts have no set expiration date. They often use regular funding payments to keep contract prices close to the value of the underlying asset.
The CFTC rejected CME’s position and described the lawsuit as ‘frivolous.’ That response shows that the two sides dispute both the legal classification and the process used to approve the products. Kalshi and Coinbase were not named as defendants in the case.
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The final classification will determine which laws apply to perpetual products. A futures designation places a contract under rules for designated contract markets. A swap classification may bring different clearing, reporting, registration and customer eligibility requirements.
These differences matter for crypto platforms seeking to offer leveraged products in the United States. Perpetual contracts account for a large share of crypto derivatives trading outside the country, while US access has remained limited under existing federal rules.
Still, the joint request does not propose an immediate ban or approval for any product. It asks the public to comment on legal definitions and possible compliance options. Any formal regulatory change would require further agency action.
Market participants will now follow the public consultation and the CME’s court case. Both processes address the same unresolved question: whether newer contracts fit current futures rules or require treatment as swaps under Dodd-Frank.