One business day against 240. That gap is what Citadel wants closed

Citadel Securities asked the SEC and the CFTC on 9 September to settle which of them oversees event contracts written on US public companies, The Block reports. Underneath the jurisdictional language sits an arithmetic problem, and it is the reason the letter exists.

Two doors lead to the same product:

• CFTC route: the venue self-certifies and trading can start the next business day.
• SEC route: publication, public comment, and an affirmative decision before trading.
• SEC statutory clock: 45 days, extendable to 90, and up to 240 in all.

We checked the outer number in the statute. Section 19(b)(2) of the 1934 securities law gives the Commission 45 days from publication, allows an extension of no more than 45 more, and lets proceedings run to 180 days with one extension of 60. The practical ceiling is 240 days. One business day against 240 is the gap a venue closes by describing its product as a derivative rather than a security.

Stephen John Berger, who runs government and regulatory policy at Citadel Securities, put the objection in one sentence.

“A trading venue should not be able to effectively choose its regulator for an equity-linked product based on its own unilateral characterization of such product.”

— Stephen John Berger, The Block, 10 September 2026

Stephen John Berger, Citadel Securities, in The Block, 10 September 2026

What Citadel is asking for

Citadel asks for four things: that the SEC be affirmed as the primary regulator for contracts tied to US public companies, that self-certification stop working as a route around it, that the SEC commit to reviewing filings on time, and that the classification of equity-linked event contracts and perpetual derivatives be settled.

The third request is the one that makes the other three workable. A regulator that takes 240 days is not a regulator venues will choose voluntarily, and a promise of speed is what the SEC would have to offer in exchange for the traffic.

The issuer writes the answer key

The sharpest part of the letter is about contracts on corporate performance indicators. Citadel calls out novel insider trading risk, and the description is specific: with a KPI contract the uncertainty covers not only whether the company hits the metric, but whether and how the company reports it.

The issuer controls both the outcome and the disclosure of it. In equities that combination is what the disclosure rules exist to police. In a self-certified event contract there is no equivalent regime, because nobody decided one was needed before trading started.

Who gains if the door shuts

The letter is a market structure argument, and Citadel has a position in the market it describes. The firm makes markets in equities and options, and single-name event contracts compete with the products it already quotes. The firm also has money in this sector: it put $400 million into Crypto.com in July at a $20 billion valuation.

The route it wants closed is in active use. The crypto exchange Binance.US filed with the CFTC at the end of July to run prediction markets, and New York sued Kalshi in August over sports contracts. Every one of those cases turns on the same question of what the product is called.

Nothing obliges either agency to answer. The letter has no deadline attached, and neither regulator has said when it will respond. It does put a number on the incentive, and definitions are a weak answer to 240 against one.

This article is for informational purposes only and does not constitute investment advice.