Chicago, November 3rd / PRNewswire / -- Cboe Global Markets, Inc. ( Cboe : CBOE ) Today, a statement was issued supporting the legal action taken by the Capital Markets Alliance ( Capital Markets Alliance, abbreviated as CMA ). This action questions the decision of the U.S. Commodity Futures Trading Commission ( CFTC ) to approve U.S. stocks and ETF perpetual derivatives. The members of CMA include Cboe, Citadel Securities, and Healthy Markets Association.
Cboe Global Markets CEO Craig Donohue stated: " Cboe has joined this initiative alongside some of the largest market participants and investor advocates in the United States, because we believe that the actions of CFTC threaten the regulatory framework that has protected investors and regulated the U.S. securities market for over the past 90 years."
Donohue said, "Single-stock perpetual derivatives are the latest example of a concerning trend, where securities products are traded on CFTC platforms rather than under the appropriate regulatory frameworks and customer protection systems established by Congress. Whether these products are linked to a single issuer, broad securities indices, corporate events, or other securities-related outcomes, they should be traded on registered securities platforms and subject to the investor protection, regulation, and safeguards required by U.S. securities laws. Cboe and other parties, including legislators, have raised concerns about these developments through public comments and industry forums, but to no avail."
Donohue indicates that Cboe is not afraid of competition. "For over 50 years, Cboe has been successfully competing in the world's most competitive markets, and we welcome new entrants and innovation. If it were just a business issue, Cboe could bring these products to its operated trading and clearing platforms that are regulated by CFTC. We support the mission and purpose of CFTC to supervise products within the scope of authority granted to it by Congress."
"But this issue is related to the protection of investors in securities trading and the rule of law. Investors are entitled to the specific protections established by Congress for the securities market, and regulatory agencies also have the responsibility to enforce the framework created by Congress. When securities products are allowed to trade outside of this framework, it leads to regulatory arbitrage, circumventing federal and state laws, and undermines the integrity of these markets."
“CFTC has approved a large number of applications for securities-related products, which deviate from decades of precedent and its own previous determinations. However, no clear and public explanation has been provided for the legal basis behind these approvals. Through this action and our request for relief from the ban, we hope to resolve the uncertainties caused by these actions and to uphold the laws and principles that make the U.S. capital market the strongest and most trusted in the world.”
About Cboe Global Markets
Cboe Global Markets ( Cboe : CBOE ) is a leading global market operator with a long history of innovation in the field of stock and index derivatives. Since the launch of the world's first listed options exchange in 1973, Cboe has been creating milestone products, including the introduction of S&P 500® index options and the creation of the VIX ® index – a globally leading market volatility indicator – which has reshaped the way investors manage risk and seize opportunities. Today, Cboe operates derivative, stock, and foreign exchange markets, providing trading, clearing, and investment solutions to customers around the world. For more information, please visit www.cboe.com.
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