Citadel Securities has formally requested that the SEC assert jurisdiction over event contracts linked to the performance of US public companies. In a letter submitted to both the SEC and the CFTC on September 9, the firm argued that certain trading platforms are bypassing SEC oversight by utilizing the CFTC’s self-certification process.
The firm contends that KPI-linked binary options, which pay out based on metrics like quarterly revenue or operational data, function as securities. Citadel Securities claims that platforms use the CFTC’s streamlined approval mechanism to launch these products by the next business day, avoiding the more rigorous scrutiny required by the SEC.
Stephen John Berger, global head of government and regulatory policy at Citadel, stated that trading venues should not be permitted to unilaterally select their regulator. The firm highlighted concerns regarding insider trading, noting that contracts tied to non-public corporate data create risks for market abuse that are better addressed under SEC disclosure rules.
Citadel also urged the SEC to establish clear guidelines for equity-linked perpetual derivatives and to accelerate the review process for new product proposals. The firm emphasized that its current regulatory concerns are focused exclusively on traditional equity-linked products and do not involve digital assets or cryptocurrency tokens.
