US Regulators Seek Public Input on “Swaps” Definition Amid CME Legal Dispute

CFTC and SEC Move to Clarify Derivatives Rules

US financial regulators, including the Commodity Futures Trading Commission and the Securities and Exchange Commission, have launched a joint request for public comment to clarify key definitions under derivatives law. The initiative focuses on updating interpretations of terms such as “swaps” and “security-based swaps” under the Dodd-Frank Act.

The agencies are also seeking feedback on how new financial products should be treated, including event-based contracts used in prediction markets and crypto-related perpetual futures.

Officials said the goal is to reduce long-standing legal uncertainty and improve clarity in derivatives regulation, which they argue has limited fair competition and innovation in the sector.

CME Lawsuit Raises Market Structure Questions

The move comes as CME Group has filed a lawsuit against the CFTC over its approval of perpetual futures trading in the US. The complaint challenges the regulator’s classification of these products as futures contracts rather than swaps.

CME argues that the decision allows new competitors to enter the retail derivatives market under different rules, potentially affecting competition with established exchanges.

The CFTC has responded that it plans to seek dismissal of the case, stating that its actions align with a broader pro-innovation regulatory approach.