The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have jointly issued a request for public comment on key definitions and reporting requirements for derivatives, marking a major step in their Harmonization Initiative. The move, announced on June 18, comes days after the CME Group filed a lawsuit against the CFTC, challenging the agency’s decision to allow Kalshi to offer perpetual futures – a popular crypto derivative – classified as futures rather than swaps.
The regulators are asking market participants whether existing Dodd-Frank era rules still fit today’s trading structures, including prediction market event contracts and mixed swaps. The 60-day comment window aims to clarify jurisdictional boundaries and potentially reclassify perpetual futures, which could impose entirely different clearing and compliance requirements on platforms like Coinbase that have recently added such products.
Industry heavyweights including ICE Trade Vault, ISDA and SIFMA have already urged alignment, arguing that swaps and security-based swaps are functionally identical and that parallel compliance systems impose unnecessary costs. SEC Chairman Paul Atkins and CFTC Chairman Michael Selig both stressed the need to eliminate duplicative rules that have pushed innovation overseas. The initiative, formalized by an MOU signed in March, covers six workstreams from product definitions to trade data reporting. The SEC also finalized joint rulemaking under the Financial Data Transparency Act, effective October 1, establishing baseline data standards without altering reporting duties.
The CME lawsuit specifically accuses the CFTC of creating an illegal “short‑cut” for retail‑focused derivatives platforms, arguing that perpetual futures should be regulated as swaps. The outcome could reshape the booming crypto derivatives market, where leverage trading on non‑expiring contracts has become a mainstay for major tokens.
