Outgoing CME chief executive Terrence Duffy said the company will file a lawsuit against the CFTC after the regulator approved perpetual futures products earlier this month. Duffy argued that the products do not qualify as futures under the Dodd-Frank Act. The CFTC responded by calling the planned action frivolous.
Duffy, who is stepping down next year, told CNBC on Wednesday that perpetual futures involve two parties exchanging payments and therefore meet the definition of swaps rather than futures. He said CME needs clearer rules before considering its own contracts in the category.
The CFTC approved Kalshi's perpetual futures product this month. Duffy said the approval did not meet Dodd-Frank requirements and that the agency had misrepresented certain facts, including its description of 24/7 trading rules.
In an emailed statement, a CFTC spokesperson said the exchange had chosen lawfare over marketplace competition and that incumbents fear competing on a level playing field. The spokesperson added that the agency looks forward to dismissing the lawsuit.
Duffy is scheduled to file the suit in the District of Columbia on Thursday.
