American Securities Association asks court to halt single-stock perpetuals, citing retail risk

3 min

The American Securities Association asked the court to weigh retail-investor risk while adjudicating the legality of US single-stock perpetuals. ASA’s November 10 filing, announced November 12, supports interim relief that could pause trading as the case proceeds. The CFTC defends the products as a regulated domestic alternative to offshore markets.

ASA highlights retail-investor risk during litigation

ASA’s motion and proposed amicus brief emphasize potential retail harm and equity-market stress. It cites leverage, forced liquidations and trading during thin liquidity sessions as risks that could transmit losses into underlying shares. ASA requests a pause on the products during the lawsuit. The filing presents arguments but does not establish that harm has occurred or resolve the contracts’ legal classification. ASA publicized the filing on November 12, while the court-stamped documents are dated November 10.

CFTC’s rationale for a domestic, regulated pathway

Chairman Michael Selig’s November 3 statement describes a framework that uses designated contract markets that are notice-registered with the SEC for security-futures products. The CFTC argues regulated US availability supports risk management and price discovery and relies on CFTC-SEC coordination. The policy trade-off is framed as regulated access versus whether the chosen legal category preserves required investor protections. Previous coverage noted crypto and trading firms backing the CFTC; ASA adds a retail-focused counterargument.

Prior TRO ruling and implications for interim relief

Judge Valerie Caproni’s November 3 order denied a temporary restraining order due to lack of imminent, irreparable harm, while indicating the plaintiff was likely to succeed on a statutory-authority argument at that early stage. ASA’s submission targets the harm prong for interim relief. The court will determine the weight of ASA’s arguments.

Contract design and scope of filings

The SEC’s September notice of Nadex specifications describes perpetual contracts with no fixed expiry, cash settlement and no ownership of the underlying security. That notice covers a specific venue and filing and does not define every contract in dispute. Kalshi’s separate security-futures listing standards illustrate that similar product names can differ in terms and regulatory posture.

What could change next

The next key event is the court’s decision on interim relief. Any restrictions on the products depend on the terms and timing of a court order. Advocacy announcements do not establish legal effect.