Cboe Challenges CFTC Approval of Perpetual Derivatives to Protect U.S. Securities Framework

Cboe Global Markets, Citadel Securities, and the Healthy Markets Association have launched a legal challenge against the CFTC’s approval of single-stock perpetual derivatives. This move signals a significant escalation in the jurisdictional battle between securities and commodities regulators, highlighting concerns over investor protection and the potential for regulatory arbitrage in the U.S. capital markets.

What was announced

Cboe Global Markets has formally supported a legal action filed by the Capital Markets Alliance (CMA) against the Commodity Futures Trading Commission (CFTC). The litigation contests the CFTC’s recent approval of single-stock perpetual derivatives on U.S. equities and exchange-traded funds (ETFs). The CMA, which includes Cboe, Citadel Securities, and the Healthy Markets Association, argues that these products are being permitted to trade on CFTC-regulated platforms despite their nature as securities.

The legal action seeks injunctive relief to resolve what the alliance describes as a break from decades of regulatory precedent. According to the challenge, the CFTC has authorized multiple filings for securities-related products without providing a clear legal basis for doing so. These products include derivatives tied to individual issuers, broad-based security indices, and corporate events. Cboe contends that such instruments should be subject to the specific investor protections and oversight required under U.S. securities laws, rather than the commodities regime. The alliance claims that allowing these products to trade outside the established securities framework creates regulatory arbitrage and undermines market integrity. This move follows previous attempts by Cboe and various legislators to address these concerns through public comments and industry forums.

"Cboe has joined this action alongside some of the largest U.S. market participants and investor advocates because we believe 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,"

Craig Donohue, CEO of Cboe Global Markets

The companies involved

Cboe Global Markets is a leading global market operator and a pioneer in the development of equity and index derivatives. The company provides infrastructure for trading and clearing across a diverse range of asset classes. Joining Cboe in the Capital Markets Alliance is Citadel Securities, a prominent global market maker that provides liquidity to a wide array of financial institutions and retail investors. Citadel Securities is a major participant in the U.S. capital markets, often at the center of high-volume trading and market structure evolution.

The alliance also includes the Healthy Markets Association, an investor-focused organization that advocates for transparency and fairness in the financial markets. These organizations represent a coalition of exchange operators, liquidity providers, and investor advocates. While Cboe operates its own CFTC-regulated trading and clearing platforms and has a long history of competition in global markets, it maintains that the products in question fall outside the CFTC's intended authority. The collective action by these entities signifies a unified front against what they perceive as an erosion of the regulatory boundaries between securities and commodities.

What FF News has reported before

FF News has previously covered the expanding operational footprint of both Cboe and Citadel Securities. In October 2026, we reported that Cboe Clear Europe Expands SFT Service to Include U.S. Equities Clearing, highlighting the firm's growth in clearing services. We also tracked Citadel Securities’ involvement in the modernization of market infrastructure, specifically when BNY and Citadel Securities Complete First Tokenized U.S. Treasury Triparty Repo Transaction. These reports reflect the ongoing efforts of these firms to innovate within the clearing and settlement space while navigating complex regulatory environments.

What this means

This legal action marks a critical juncture in the ongoing jurisdictional dispute between the SEC and the CFTC. By challenging the CFTC’s authority over single-stock perpetual derivatives, the Capital Markets Alliance is forcing a judicial review of where securities regulation ends and commodities oversight begins. The core issue is regulatory arbitrage; if identical underlying assets can be traded under different rules, it creates an uneven playing field that could weaken long-standing investor protections. The outcome of this case will likely determine whether the U.S. maintains a unified securities oversight model or shifts toward a more fragmented system, potentially increasing compliance complexity for the entire fintech sector.