Cboe Seeks Injunction Against CFTC Approval of Equity Perpetuals

Cboe Global Markets announced (C67.DE ) on November 3, 2026 that it had joined a Capital Markets Alliance legal action challenging the Commodity Futures Trading Commission’s approval of perpetual derivatives on U.S. stocks and exchange-traded funds. The action includes a request for injunctive relief. The alliance includes Cboe, Citadel Securities and Healthy Markets Association.

Chief Executive Craig Donohue’s rationale is that the CFTC’s actions threaten to erode the regulatory framework that has protected investors and governed U.S. securities markets for more than nine decades. Cboe’s objection covers products tied to individual issuers, broad-based security indices, corporate events and other securities-related outcomes, which it wants traded on registered securities platforms with the investor protections, oversight and safeguards required under securities laws.

Donohue addressed the competitive implications directly: “If this were simply a commercial issue, Cboe could bring these products to market on CFTC regulated trading and clearing platforms that it operates.” Cboe instead casts the issue as investor protection and the rule of law, alleging that trading securities products outside that framework creates regulatory arbitrage, bypasses federal and state laws and undermines market integrity.

The statement also accuses the CFTC of authorizing numerous securities-related product filings that break with decades of precedent and its own prior determinations without clearly explaining the legal basis publicly. Earlier concerns raised through public comments and industry forums, including by legislators, failed to resolve the dispute.

The Approval Being Challenged

CFTC Chairman Michael S. Selig’s same-day statement supplies the regulatory position being challenged: perpetual futures on individual equity securities could begin trading for the first time on CFTC-registered exchanges. Those venues are designated contract markets dually registered with the Securities and Exchange Commission (SEC) as notice-registered national securities exchanges for security futures products. The contracts were deemed approved under Commission Regulation 40.3 as security futures products under the Commodity Futures Modernization Act of 2000 and are subject to the Commodity Exchange Act, federal securities laws and both agencies’ frameworks. Selig’s policy rationale is to support risk management and price discovery while keeping activity in regulated U.S. markets rather than offshore venues.

Why Cboe Says the Contracts Are Swaps

The legal theory predates the alliance action. In an October 14, 2026 letter to the SEC, Cboe asked the agency to abrogate four proposed rule changes for single-stock perpetual contracts, require them to be refiled under Section 19(b) of the Securities Exchange Act of 1934 and disapprove them. The proposals came from Bitnomial Exchange, Coinbase Derivatives, KalshiEX and North American Derivatives Exchange.

The dispute turns on the statutory definition of a security future: a contract of sale for future delivery of a single security or narrow-based security index. Cboe argues that the perpetual contracts have no final settlement date and never require delivery or final cash settlement, while recurring funding payments based on the difference between contract and underlying-security prices are not an adequate substitute. On that reading, the contracts transfer economic risk in a single security without conveying ownership, making them security-based swaps subject to SEC jurisdiction rather than security futures.

Cboe’s letter extends the objection beyond definitions, arguing that Stock Perpetual order and trade data would sit outside the Consolidated Audit Trail even as related hedges in securities markets would be reported and surveilled, creating a reporting gap and a risk of undetected cross-market manipulation. It also challenges the proposed listing standards: listed options have defined expirations and existing series run off if an underlying security no longer meets maintenance standards, while a perpetual contract never runs off. That could leave leveraged exposure to equities that no longer satisfy the standards applied to comparable listed options.

Healthy Markets Association submitted its own objection on October 29, 2026, asking the SEC to abrogate the proposals and the CFTC to reject the related filings. It argued that the products have no contractually listed expiration or delivery date and instead rely on periodic payments and adjustments to align prices with referenced assets; the resulting regime would have materially different leverage, trade-reporting, surveillance and transparency treatment from equities and other equity derivatives.

With the CFTC saying trading can begin and the alliance seeking injunctive relief, the dispute is no longer confined to comment letters. The classification question now carries immediate consequences for which surveillance, reporting and investor-protection rules govern perpetual exposure to individual U.S. stocks.