TD Cowen: CME has legal edge in perpetual futures lawsuit against CFTC

CME Group holds a stronger legal position in its lawsuit against the Commodity Futures Trading Commission (CFTC) regarding the approval of perpetual futures in the U.S., according to an analysis by TD Cowen. The Block reported the assessment from Jaret Seiberg, a managing director at TD Cowen's Washington Research Group. Seiberg noted that CME Group has the advantage on both procedural and substantive grounds. He explained that the lawsuit's central issue will be whether perpetual futures, which have no expiration date, can legally be classified as futures contracts. This distinction is critical, as swaps and futures are subject to different regulatory and tax rules. Swap dealers are required to register and typically use a five-business-day margin calculation, whereas futures contracts use a one-day standard and may receive tax benefits. Seiberg anticipates that CME will file for a preliminary injunction, adding that the court's hearing schedule and initial rulings will be key developments to watch.