The CFTC and SEC have requested public input on the definitions of swaps and other derivative instruments.
This move comes amid a conflict with the Chicago Mercantile Exchange (CME Group). On June 17, CME Chairman Terrence Duffy announced plans to sue the CFTC, triggered by the agency's approval of perpetual futures launched by the platform Kalshi.
Regulators aim to clarify rules for new financial products, including prediction market contracts and perpetual futures. They want to assess whether current regulations align with the evolving market structure.
CFTC Chairman Michael Selig stated that this initiative will help eliminate legal uncertainties in the Dodd-Frank Act that hinder fair competition.
His SEC counterpart, Paul Atkins, noted that updating the rules for event contracts has long been overdue.
The feedback collection period will last for 60 days.
A CFTC representative commented to The Block that the lawsuit is "unfounded" and accused CME of trying to combat progress through the courts. According to him, dominant players are simply afraid of fair competition.
Criticism also came from representatives of the decentralized exchange Hyperliquid. The Hyperliquid Policy Center stated that CME controls about 92% of the derivatives market in the US and is attempting to maintain its monopoly.
"Americans have been going offshore for years to trade perpetual futures. This is the first truly new product on the regulated US market in a decade. Competition benefits users, and innovation deserves clear rules," the organization remarked.
It is worth noting that in May, the CFTC acknowledged its lawsuit against Gemini was erroneous. The Commission stated that the methods of the previous leadership were "inappropriate."