US derivatives regulators are asking the public to help them redraw the line between “swaps” and other products just as that line lands in federal court. The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) jointly opened a comment process to clarify key derivatives definitions, days after CME Group sued the CFTC over its approval of crypto perpetual futures.
In a joint press release, the agencies said they are seeking input on “potential opportunities to further update, clarify, and harmonize certain derivatives product definitions and interpretive issues.” The request focuses on how U.S. rules define swaps, security‑based swaps, mixed swaps, and “novel or emerging products,” and it asks whether the current language still fits today’s markets. Regulators also want feedback on jurisdictional boundaries, swap exclusions, and possible alternative compliance paths for products that fall between the two agencies.
According to the notice, the comment period will remain open for 60 days after the request is published in the Federal Register. During that window, exchanges, crypto firms, lawyers, and the broader public can weigh in on where they think the swap line should sit. The goal, the agencies said, is to ensure that Title VII of the Dodd‑Frank Act still “appropriately reflect[s] evolving market structures, financial products, and trading practices.”
CME Lawsuit Raises the Stakes
This review lands while CME Group challenges the CFTC in court over its treatment of crypto perpetual futures. CME’s lawsuit argues that the agency “overrode Congress’s definition of the term ‘swap’” when it approved Kalshi’s bitcoin perpetual contracts as futures rather than swaps. The exchange says those products should fall under the Dodd‑Frank swap framework, with a different set of rules and reporting duties.
CME’s complaint claims the CFTC “bypassed congressional requirements” and created a path for new competitors without using the swap rules Congress wrote after 2008. At the same time, CME CEO Terry Duffy has publicly insisted that perpetual contracts are “essentially swaps” and warned that misclassifying them could increase market risk. The new comment process does not decide that case, but it underscores how unsettled the legal categories remain.
The joint request also invites views on event contracts, prediction markets, and other emerging products that do not fit cleanly into old buckets. Regulators explicitly ask whether certain instruments should be treated as swaps, security‑based swaps, or something else entirely when referencing crypto prices, macro data, or sports outcomes.
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