The SEC sides with the CFTC in court over perpetual futures on US stocks, against a group whose members include Cboe and Citadel Securities

The Securities and Exchange Commission has stepped into the court fight over perpetual futures on individual US stocks, and it has come down on the side of the Commodity Futures Trading Commission. In a friend-of-the-court brief filed this week, the SEC supported the CFTC against the Capital Markets Alliance, an industry group whose members include Cboe and Citadel Securities, The Block reported.

The alliance sued in New York to overturn the CFTC's clearance of the products, arguing they belong under the SEC and that the CFTC broke administrative law. The SEC called the alliance's portrayal of "a CFTC gone rogue, and an SEC gone missing" mistaken, according to Ledger Insights. The SEC also said the CFTC's rule changes remain subject to its review and that the two agencies work together often, The Block reported. Earlier, a judge refused the alliance an emergency order but said it would probably win on the law, Ledger Insights reported.

The brief stops short of a verdict on the products themselves. The SEC did not say whether the contracts are futures or swaps, Ledger Insights reported, but noted it can decide whether to overturn the Kalshi, Coinbase and Bitnomial exchange rules, with a December 31 deadline. Better Markets, which argues the products are securities swaps the SEC should regulate, and former SEC commissioner Allison Herren Lee also filed briefs, The Block reported. No date for a ruling on the injunction has been reported.