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SEC enters CMA v. CFTC: Cboe-backed group wants SDNY to vacate equity-perp approvals

A Cboe- and Citadel Securities-backed industry group sued the CFTC Nov 3. The Block reports the SEC filed a brief backing the CFTC. Coinbase, Kalshi and Payward applications are at issue.

by 4 min read
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The Capital Markets Alliance Association (CMA), an industry group whose membership includes Cboe and Citadel Securities, sued the CFTC in the Southern District of New York on Nov 3, 2026 (case 1:26-cv-09608), the same day the CFTC deemed applications from Coinbase Derivatives, Kalshi and Payward approved for single-stock perpetual-futures listings. The court denied CMA's motion for a temporary restraining order the same day. The Block reported on Nov 11 that the SEC has now filed a brief in the case supporting the CFTC, calling CMA's "CFTC gone rogue, SEC gone missing" framing mistaken.

What the CMA is challenging

Per the Cleary Gottlieb memo dated Nov 5, equity perpetual contracts became eligible to trade on dually-registered designated contract markets on Nov 3. The CMA complaint argues:

  • The CFTC's approval violated the Administrative Procedure Act: the agency did not explain its decision adequately.
  • Single-stock perpetual contracts are security-based swaps, not futures, which would place them under SEC rather than CFTC jurisdiction.
  • The court should vacate the approvals and halt trading while the case proceeds.

Cboe's own letter to the CFTC — dated per its PDF metadata to Oct 30 — argues stock perpetuals involve "no future delivery," that funding payments are not final settlement, and that the security-futures rules presuppose expiration, so the contracts "fall outside the Commission's jurisdiction."

The SEC's reported entry

The Block's account of the SEC brief:

  • The filing disputes the CMA's depiction of a rogue CFTC and missing SEC.
  • The SEC states that CFTC rule changes are subject to SEC review, and that the two agencies collaborate on oversight — a posture it describes as important for perpetual equity derivatives.
  • An amicus brief against the CMA was filed by Coinbase, Payward, Kalshi, DRW Holdings, Paradigm and Jump Trading.
  • Former SEC Commissioner Allison Herren Lee and Better Markets filed amicus briefs on the opposite side, arguing stock perpetuals belong under SEC jurisdiction.

The brief itself is not yet posted on the SEC's public newsroom at time of publication. SEC Chairman Paul Atkins said separately that the SEC's recent approval order on a related product category "does not address — and does not foreclose — CFTC jurisdiction over KPI contracts," a line the industry has read as coordination, not turf.

Who filed what, and for what products

  • Kalshi: submitted roughly 58 proposed equity-linked contracts.
  • Payward (Kraken's parent): filed for an initial slate of 10 US stocks, with filings before both the CFTC and SEC.
  • Coinbase Derivatives: one of the first exchanges to request Commission approval for single-stock perpetuals.
  • The product: cash-settled perpetual-futures contracts referencing individual US-listed equities. Funding payments replace expiry; CFTC's May 2026 bitcoin-perpetual framework is the precedent the agency leans on.

Why the fight matters

Stock perpetuals are the first product category where the CFTC and SEC are being asked to split a market that neither agency has ever listed before. A win for the CMA — ruling the contracts are security-based swaps — would move them to SEC-registered exchanges (Cboe, Nasdaq ISE, NYSE's options venues) and out of the CFTC-regulated venues now listing them. A loss consolidates the derivatives-side framework the CFTC built in 2025–26 for crypto perpetuals around a broader base that includes equities.

It is also the second time this year a trade-group suit has tested the CFTC's perpetual-futures authority in federal court. In CME v. Selig (D.D.C. 1:26-cv-02157), the Chicago Mercantile Exchange challenged earlier crypto-perpetual approvals; the Hyperliquid Policy Center filed an amicus brief backing the CFTC in September.

What to watch

  1. SDNY briefing schedule in case 1:26-cv-09608. The TRO has been denied; a preliminary-injunction schedule is the next procedural lever the CMA has.
  2. SEC filing posting. The Block's description of the SEC brief is the only public summary at this hour; look for the filing itself on the SDNY docket or SEC newsroom.
  3. Whether the CMA amends to seek class-action status or adds Cboe or Citadel Securities as named plaintiffs.
  4. Trading launch timelines. Coinbase and Kalshi have the regulatory green light; actual go-lives are the market event, and will test whether a court intervention lands before product launch.

Sources

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