Citadel Securities has asked US regulators to keep the SEC as the primary overseer of event contracts tied to public companies and their securities. The market maker warned that CFTC self-certification could otherwise let equity-linked prediction-market products bypass SEC jurisdiction.
Citadel Securities has asked US regulators to reaffirm the SEC's role as primary overseer of event contracts linked to US public companies and their securities. The firm made the request in a September 9 submission to a joint SEC-CFTC consultation on how the agencies define "swap" and "security-based swap" — a distinction that could decide which regulator supervises certain equity-linked prediction-market products.
Citadel's filing in the SEC-CFTC docket
The letter was submitted under File No. S7-2026-21, the SEC's joint request for comment with the CFTC on the definitions of "swap" and "security-based swap," as well as alternative compliance. The request focuses on event contracts linked to US public companies and their securities, not on placing all event contracts under SEC oversight.
KPI contracts and the jurisdictional test
Citadel's letter said contracts tied to company key performance indicators, or KPIs, may constitute security-based swaps. The Block reported that Citadel specifically pointed to KPI contracts tied to public companies and said equity-linked products should remain within the SEC's regulatory and surveillance framework. Because the submission was made in a definitions proceeding, it presents Citadel's view of the jurisdictional boundary rather than a regulatory decision.
Citadel's objection to CFTC self-certification
The firm also warned that the CFTC's self-certification process could be used to bypass SEC jurisdiction, letting equity-linked event contracts reach the market without SEC oversight applying. The dispute therefore concerns regulatory routing as much as product design: it wants such contracts to remain subject to the SEC's oversight and surveillance framework rather than pass through the CFTC path without that determination.
The CFTC's event-contract rulemaking agenda
The filing follows the CFTC's June proposal of rules for evaluating event contracts as part of a broader federal framework for prediction markets, after the agency said it had observed rapid growth in contracts listed by CFTC-registered entities. The CFTC proposal and the SEC-CFTC definitions docket concern related but distinct parts of the regulatory landscape, overlapping on the question of how federal oversight should be allocated when a contract is structured around a corporate outcome connected to a publicly traded company.
Source: Crypto Daily™
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