Six Firms Back CFTC Authority Over Stock Perpetual Contracts

Six companies — Coinbase, Kalshi, Payward, DRW Holdings, Jump Trading and Paradigm Operations — filed a proposed amicus brief on November 9, 2026 defending the CFTC's authority over single-stock perpetual contracts in a federal case that could determine which agency polices an emerging class of equity derivatives. The filing, submitted to the U.S. District Court for the Southern District of New York, challenges the Capital Markets Alliance Association's claim that the products belong under a different regulatory regime.

The case, Capital Markets Alliance Association v. Commodity Futures Trading Commission, No. 1:26-cv-09608-LGS, turns on a narrow statutory question: whether perpetual contracts referencing large-cap U.S. stocks are security futures under CFTC jurisdiction or security-based swaps reserved for the SEC.

How did the dispute start?

Coinbase Derivatives, KalshiEX and Bitnomial Exchange applied on September 18, 2026 to list perpetual contracts tied to individual large-cap U.S. stocks. The CFTC deemed those applications approved on November 2, 2026 through its product-review process. A November 3, 2026 clearance covered the first equity perpetual futures for eligible domestic trading venues.

The Capital Markets Alliance Association sued on November 2, 2026, alleging the CFTC exceeded its authority, inadequately explained its decision and ignored consequences for securities markets. The group's members include Cboe and Citadel Securities, and it asked the court to set aside the approvals and block their effect during litigation.

Association secretary Adam Ford said launching products outside existing regulatory standards risks undermining investor protections and market oversight. That claim lacks quantification; the filing articulates risk in principle rather than documented harm. In plain words, the alliance asserts a jurisdictional error but has not yet shown concrete damage.

What does the amicus brief argue?

The six firms argue the Commodity Exchange Act permits perpetual contracts to fit the security futures framework even without a fixed expiration date. "A security future—by definition—cannot be a swap," they wrote. Their reasoning avoids resemblance tests and instead asks whether the products satisfy the legal criteria for security futures.

The products retain core futures features: standardized terms, margin requirements and centralized clearing. Funding payments keep contract prices tied to the referenced stock, and traders exit positions without waiting for maturity. Only the missing expiration date separates them from conventional futures.

The firms contend the security futures regime already supplies joint CFTC and SEC oversight. Participating exchanges must retain CFTC designation and meet SEC registration requirements. Coinbase submitted SEC registrations in September 2026 for its derivatives exchange and brokerage operations. Payward, which acquired Bitnomial earlier in 2026, DRW, Jump Trading and Paradigm described existing or potential interests in trading equity perpetuals.

Coinbase general counsel Molly Abraham backed the filing on November 10, 2026, citing the regulatory framework Congress established in 2000. Vice Chairman Ryan VanGrack separately argued that U.S. investors deserve access under joint agency oversight, noting that global markets already trade equity perpetuals. Both statements endorse a framework; neither addresses the statutory ambiguity the court flagged. In plain words, industry support is strong but does not resolve the definitional question.

What has the court said?

Judge Valerie Caproni denied the alliance's temporary restraining order on November 3, 2026, finding the alleged harm insufficiently immediate to justify emergency intervention. The approvals remain in effect.

Her preliminary legal assessment, however, favored the plaintiff. Caproni questioned whether contracts lacking delivery of a security on a specified future date satisfy the statutory definition of security futures, and found the products appeared to fit the definition of security-based swaps, generally regulated by the SEC.

The court directed further briefing on a preliminary injunction request, which the six firms asked the court to reject. The CFTC's opposition was due November 6, 2026, with the alliance's response scheduled for November 10, 2026, subject to changes by the assigned judge.

The upcoming injunction ruling will indicate whether the first U.S. equity perpetual futures can keep trading while the classification fight proceeds — and which of the two agencies will ultimately govern them.