CME to sue CFTC over Kalshi perpetual futures approval, the exchange said it will sue the Commodity Futures Trading Commission after the agency approved Kalshi’s perpetual futures product and that the action raises key regulatory interpretations under the Dodd‑Frank Act.
Chief executive Terrence Duffy, who plans to step down next year, said the Dodd‑Frank Act defines a swap as two parties exchanging payments, so products approved as futures could be swaps subject to different participation requirements, and that CME needs clarity on the rules before listing similar perpetual futures contracts.
The regulatory dispute centers on the Commodity Futures Trading Commission’s approval of Kalshi’s perpetual futures product and CME’s plan to sue the agency after that approval. Under the Dodd‑Frank Act, a swap is defined as two parties exchanging payments, so products approved as futures could instead qualify as swaps if they meet that definition. If those products are swaps, they would be subject to different requirements to participate in the swap market. The exchange has said it needs clarity on the applicable rules before listing similar perpetual futures contracts of its own, but those rules are not very clear at present.
Terrence Duffy, who plans to step down next year, criticized the CFTC’s handling of the matter and suggested the agency misrepresented certain facts. He cited the CFTC’s release on 24/7 trading and noted that the agency described that as a rule when it was not a rule. CME has framed the issue as one of regulatory interpretation under the Dodd‑Frank Act, and the company has expressed skepticism about the clarity and correctness of the CFTC’s statements. Duffy also conveyed that there are many problems with the current situation as described by the exchange.
CME has raised practical concerns about listing perpetual futures contracts because it says the applicable regulatory rules are unclear. The company has said it needs to understand “the rules of the road” before listing perpetual futures of its own, but it finds those rules not very clear at present.
Under the Dodd‑Frank Act, a swap is defined as two parties exchanging payments, and products approved as futures could instead qualify as swaps if they meet that definition. If those products are swaps, they would be subject to different requirements to participate in the swap market. Because of that potential reclassification, CME has indicated it requires clarity on the regulatory framework before proceeding.
Terrence Duffy, who plans to step down next year, has expressed skepticism about the CFTC’s handling of the matter and suggested the agency misrepresented certain facts. He cited the CFTC’s release on 24/7 trading, saying the agency described that as a rule when it was not a rule. Those statements are part of CME’s practical concerns about regulatory clarity and the conditions under which it would list perpetual futures contracts.
Legal and regulatory tensions persist between the exchange and the regulator over approval and classification of perpetual futures, centered on differing interpretations of applicable statutes and unclear rule guidance. The dispute has produced ongoing uncertainty about the regulatory framework governing such contracts and about the proper procedural and compliance steps for market participants.
