On 18 June 2026, the United States Securities and Exchange Commission and the United States Commodity Futures Trading Commission jointly issued a Request for Comment titled Joint Request for Comment on Further Definition of “Swap” and “Security Based Swap” and on Alternative Compliance. The initiative seeks public input on whether existing Title VII definitions, interpretations and jurisdictional boundaries under the Dodd Frank Act continue to reflect modern market structures, digital infrastructure and emerging financial products. The request focuses on areas including swaps, security based swaps, mixed swaps, event contracts, innovative financial products and potential alternative compliance frameworks. The consultation follows increasing industry requests for greater regulatory certainty regarding products that may fall within the jurisdiction of both agencies.
SEC and CFTC Launch Joint Review of Title VII Product Definitions
The Request for Comment forms part of a broader cooperation initiative between the Securities and Exchange Commission and the Commodity Futures Trading Commission aimed at improving regulatory coordination in areas of overlapping jurisdiction. According to the agencies, financial markets are becoming increasingly interconnected through technological innovation, digital infrastructure, automated systems and new trading models. These developments have created regulatory questions regarding products that may engage both securities and derivatives frameworks. The agencies stated that the consultation is intended to evaluate whether existing regulatory definitions, interpretations and jurisdictional structures remain appropriate in light of evolving market practices and financial innovation.
Event Contracts Become a Central Focus of the Consultation
One of the most notable aspects of the Request for Comment is its focus on event contracts and prediction market products. The agencies acknowledge that market participants have raised questions regarding whether certain event contracts should be classified as swaps, security based swaps, mixed swaps or products excluded from the statutory definition of a swap. The consultation expressly seeks views on how these products should be treated under the Title VII framework.
The consultation asks whether additional regulatory guidance is necessary to establish objective criteria for distinguishing between:
- Swaps.
- Security based swaps.
- Mixed swaps.
- Securities.
- Products excluded from the swap definition.
The request also seeks comment on the characteristics that event contracts share with, or differ from, other regulated financial products.
Review of Security Based Swap Definitions
The agencies are seeking comments on several components of the statutory definition of a security based swap.
These include:
- The Narrow Based Security Index prong.
- The Single Security prong.
- The Event Contract prong.
- The treatment of contracts linked to securities and securities indices.
- The interaction between event contracts and securities law exclusions.
Particular attention is given to circumstances where an event directly affects the financial statements, financial condition or financial obligations of a securities issuer. The agencies ask whether further guidance is necessary regarding the application of this element of the security based swap definition.
Clarification of Statutory Exclusions Under Review
The Request for Comment also examines several statutory exclusions from the swap definition contained in the Commodity Exchange Act.
The agencies seek input on whether additional guidance is needed regarding:
- Securities options.
- Notes and debt instruments.
- Security forwards.
- Futures contracts.
- Security futures products.
- Other products potentially excluded from the swap framework.The consultation specifically asks whether certain event contracts referencing securities or securities indices should be treated as securities options rather than swaps or security based swaps.
Alternative Compliance Frameworks Under Consideration
Beyond product definitions, the agencies are also seeking views on alternative compliance mechanisms.
The Request for Comment asks whether compliance with one regulator's framework could, in appropriate circumstances, satisfy substantially similar requirements imposed by the other regulator where economically related products engage both regulatory regimes.
The agencies are seeking views on:
- Joint registration frameworks.
- Coordinated reporting obligations.
- Deemed filing mechanisms.
- Shared supervisory approaches.
- Coordinated surveillance and enforcement arrangements.
Statements from SEC and CFTC Leadership
US SEC Chairman Paul S. Atkins stated:
“Clarification is long overdue on Title VII definitional issues, including event based products. Through good faith cooperation efforts, we can create a level playing field where established firms and new entrants alike can compete and innovate on equal footing regardless of whether they are registered with the SEC or CFTC.”
US CFTC Chairman Michael S. Selig stated:
“Today’s joint request for public comment presents an opportunity to address longstanding ambiguities within Title VII of Dodd Frank that have stifled fair competition and responsible innovation.I appreciate the partnership of the SEC and Chairman Atkins as we work together to further clarify jurisdictional lines and enhance cooperation between our agencies.”
Regulatory Significance
The consultation arrives at a pivotal time for United States financial regulation. Questions regarding event contracts, prediction markets, digital asset products and other innovative financial instruments have increasingly highlighted the boundaries between Securities and Exchange Commission and Commodity Futures Trading Commission jurisdiction. The Request for Comment signals a willingness by both agencies to revisit the foundational product classification framework established under Title VII of the Dodd Frank Act in 2012. The outcome may influence the future regulatory treatment of event contracts, prediction markets, digital financial products and other emerging instruments that operate at the intersection of securities and derivatives regulation.
Next Steps
Comments on the Joint Request for Comment on Further Definition of “Swap” and “Security Based Swap” and on Alternative Compliance must be submitted within 60 days following publication in the Federal Register. To Submit comments click here. The Securities and Exchange Commission and Commodity Futures Trading Commission have encouraged market participants, industry bodies, academics and other stakeholders to provide data driven submissions addressing the questions raised in the consultation.
