The CFTC and the SEC requested public comment on the definitions of swaps and other derivative instruments.

The regulators' actions come amid a conflict with the Chicago Mercantile Exchange (CME Group). On June 17, CME head Terrence Duffy announced his intention to sue the CFTC. The reason was the agency's authorization for Kalshi to launch perpetual futures.

The regulators plan to clarify the rules for new financial products. These include prediction-market contracts and perpetual futures. The agencies want to understand whether the current rules match the changing structure of the market.

CFTC head Michael Selig said the initiative would help eliminate uncertainty in the Dodd-Frank Act that hinders fair competition.

His colleague from the SEC, Paul Atkins, added that clarifying the rules for event contracts is long overdue.

The collection of feedback will last 60 days.

A CFTC representative, in a comment to The Block, called the lawsuit "unfounded" and accused CME of trying to fight progress through the courts. According to him, dominant players are simply afraid of competition on equal terms.

Representatives of the decentralized exchange Hyperliquid joined the criticism. The Hyperliquid Policy Center stated that CME controls about 92% of the derivatives market in the U.S. and is trying to preserve its monopoly.

"Americans went offshore for years to trade perpetual futures. This is the first truly new product on the regulated U.S. market in a decade. Competition benefits users, and innovation deserves clear rules," — the organization noted.

Recall that in May the CFTC acknowledged that its lawsuit against Gemini was a mistake. The Commission stated that the methods of the agency's previous leadership were "improper."

Source: ForkLog