FalconX Seeks Regulatory Clarity on Single-Security Perpetuals

FalconX Bravo, a registered swap dealer on the CFTC's roster, has asked US regulators to classify certain perpetuals tied to single securities or narrow-based security indexes as security-based swaps under SEC rules.

The filing, submitted on August 12, includes comparable contracts offered through DeFi protocols and would bring registration, reporting, capital, margin, segregation, and execution requirements for affected dealers and platforms.

FalconX's proposal does not extend to Bitcoin perpetuals or crypto perpetuals generally. Contracts listed as security futures products on markets authorized by both agencies stay in the joint regime, which carries listing and market safeguards covering the underlying security or index, clearing, margin, position limits, surveillance, and trading halts.

The firm also asks the SEC to reduce duplicated requirements for firms already overseen by the CFTC. It requests an amendment to Rule 18a-10, raising its combined-notional threshold for alternative compliance from 10% to 49%, while keeping the fixed-dollar cap and other requirements intact.