US Court Denies Preliminary Injunction Request to Block Single-Stock Perpetual Contract Trading

TechFlow reported that on November 5, according to a ruling by the U.S. District Court for the Southern District of New York, a judge denied the temporary restraining order sought by the Capital Markets Alliance Association, which requested suspending the U.S. Commodity Futures Trading Commission (CFTC)'s approval of single-stock perpetual derivatives.

The court found that the plaintiffs failed to show that the absence of emergency relief would cause their members imminent, irreparable harm. However, the judge also said the plaintiffs' argument that the CFTC lacks authority to approve the products as securities futures may succeed, and the contracts appear to meet the definition of swaps regulated by the U.S. Securities and Exchange Commission (SEC).

Under the ruling, the CFTC must respond to the preliminary injunction application by November 6, and the plaintiffs must reply by November 10; the schedule may be adjusted by the judge presiding over the case.

Source: TechFlow