The Securities and Exchange Commission and the Commodity Futures Trading Commission have issued a joint request for public comment on updating, clarifying and harmonizing definitions governing derivatives products, in a rare coordinated effort to resolve long-standing ambiguities in how the two regulators separate market oversight. Announced on June 18, 2026, the consultation requires comments on whether the current definitions, definitions and legal frameworks still reflect the way derivatives are created and sold, and the comment period will be valid for 60 days after publication in the Federal Register.
Both agencies have marked the project as overdue. SEC Chairman Paul Atkins said that clarification of the defining issues under Title VII of the Dodd-Frank Act, including the management of event-based products, was long overdue, and asserted that cooperation between regulators would create a level playing field that would allow established firms and new entrants to compete regardless of which agency they are registered with. CFTC Chairman Michael Selig said the joint application addressed long-standing ambiguities within Title VII that have hindered fair competition and responsible innovation, and welcomed cooperation between the two agencies in clarifying the lines of the law. The dual framing reflects a deliberate attempt to present the process as a genuine partnership rather than a turf negotiation.
The core of the consultation goes to the heart of how derivatives are policed. It seeks comment on the definitions of change and change based on security – the boundary that determines which regulator has jurisdiction – including the scope of certain exceptions to the definition of change, the management of mixed changes, and how novel or emerging products should be classified. It also asks about legal and interpretative questions, areas that need further clarification in the interpretive guidelines, and possible approaches to alternative regulatory compliance. The separation of oversight between the SEC, which regulates securities-based instruments, and the CFTC, which oversees commodities and many other derivatives, has produced overlapping and sometimes conflicting boundaries since Dodd-Frank was enacted in response to the financial crisis.
Time is of the essence given the live disputes over exactly these boundaries. The question of how to classify new instruments is becoming pressing as crypto-link and event-linked products reach the US markets – most prominently in the recent controversy over perpetual futures, where the CME Group has moved to challenge the CFTC's approval of such contracts on the grounds that they should be treated as exchanges under Dodd-Frank rather than as futures. That dispute veers precisely along the defining lines that this negotiation needs to clarify, and a unified SEC-CFTC framework would reduce the scope for companies to exploit, or sue, the gaps between the two regimes.
The proposals have direct implications for how derivatives businesses are structured and managed. The classification of the product as an exchange, a security-based exchange or a future determines its responsibilities for clarification, reporting, limitation and location, as well as the registration of the company that must hold it – so any harmonization will readjust the compliance requirements for all trading desks, exchanges, clearing houses and the growing population of crypto-derivatives platforms. Greater certainty about the lines of the law can reduce the legal risk of introducing new products, while the prospect of alternative ways of complying with the rules points to a simpler, more flexible situation than the current fragmented situation.
How the two agencies work on the responses will determine whether this is a real simplification or another layer of consultation in a process that has continued since the passage of Dodd-Frank. The tone of the collaboration between Atkins and Selig, and the apparent focus on emerging products, points to a regime that is trying to find markets that have evolved faster than laws define them. Whether the SEC and CFTC can translate the joint comment request into consistent, long-lasting definitions — rather than maintaining the overlapping boundaries that have created litigation and uncertainty — is the test firms across the derivatives market will now be watching.
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