Citadel Securities Calls for SEC Regulation of Equity-Linked Products

Citadel Securities, a leading global market maker, has formally requested that the U.S. Securities and Exchange Commission (SEC) regulate equity-linked event contracts associated with publicly traded companies. In a comment letter submitted on September 9, the firm expressed concerns that certain trading venues are exploiting the Commodity Futures Trading Commission's (CFTC) self-certification process to avoid SEC oversight, thereby undermining regulatory standards.

The firm argues that some platforms are listing contracts that essentially function as bets on company performance metrics, such as sales figures or passenger counts, by self-certifying these products through the CFTC. This process allows trading to commence the next business day without a public comment period, in contrast to the SEC's more rigorous review process. Citadel contends that these products should be classified as securities and thus fall under SEC jurisdiction.

Stephen John Berger, Citadel's global head of government and regulatory policy, emphasized that trading venues should not have the ability to select their regulator based on their own definitions of products. The firm raised concerns about the potential for insider trading, as contracts linked to company performance metrics could be influenced by information that insiders possess before it is made public.

The request comes amid ongoing discussions about the regulatory framework for prediction markets and novel derivatives in the United States. Citadel also urged the SEC to establish clear guidelines for equity-linked perpetual derivatives, a category that has seen increased interest. The letter focused solely on traditional equity-linked products, without mentioning cryptocurrencies or digital assets.

© 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: KLEA News