CME Chief Executive Terrence Duffy said the derivatives provider planned to sue the U.S. Commodity Futures Trading Commission (CFTC) after it approved perpetual futures products earlier this month.
The CFTC’s approval of Kalshi’s perpetual futures product did not meet the requirements of the Dodd-Frank Act governing swaps, he told CNBC on Wednesday.
“Under the Dodd-Frank Act, it clearly defines what a swap is and what a future is, and when there’s two parties exchanging payments to each other, that’s deemed a swap,” he said. “So, if anything, these products that he supposedly approved as futures are not futures, they would be swaps, and if they’re swaps, and let’s say, as you know, there’s different requirements in order to participate in the swap market.”
Duffy, who is stepping down from his role next year, said CME would “need to understand what the rules of the road are first” before it would consider listing perpetual futures contracts of its own, but that those rules are not “very clear” at present.