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SEC sides with CFTC on who oversees stock perpetual futures
The Securities and Exchange Commission has backed the Commodity Futures Trading Commission in a court fight over who regulates single-stock perpetual futures in the US. The outcome decides which agency oversees trading in these products.
The Securities and Exchange Commission has stepped into a court fight on the side of the Commodity Futures Trading Commission. The question is which agency should oversee perpetual futures on individual US stocks. A perpetual future is a contract with no set end date.
Judge Colleen McMahon declined to give the CFTC deference, which means she did not defer to its judgment. She said the agency's October rules cannot be reconciled with each other.
In a case involving Novig, which offers sports event contracts, she found that New York can require a state gambling license. Novig lost its bid to block that requirement. The finding was made at the preliminary-injunction stage, an early step in a case.
In a separate ruling, a judge described the CFTC's swap rules as inherently contradictory. The disputes are still at an early stage.
Background
A preliminary injunction is a court order that applies early in a case, before a full trial.
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