Perpetual futures tied to individual stocks have been cleared to trade on U.S.-regulated exchanges for the first time, the Commodity Futures Trading Commission said Tuesday. The move brings a product previously associated with offshore crypto venues into the equity market.
CFTC Chairman Michael S. Selig said the contracts, which he called “Equity Perps,” were deemed approved under Commission Regulation 40.3 as security futures products. They may be listed on exchanges with a CFTC designated contract market registration and a notice registration with the Securities and Exchange Commission as a national securities exchange for security futures.
The contracts will be governed by the Commodity Exchange Act, federal securities law and the rules of both agencies. The CFTC statement did not name any exchange or specific contracts, or give a launch date. Those details are expected from the designated contract markets.
Perpetual futures have no expiration date. Instead, traders on opposing sides make periodic funding payments intended to keep contract prices aligned with the underlying asset’s spot price. The structure has been widely used in crypto derivatives, with much of the trading taking place on platforms outside U.S. jurisdiction.
The equity decision follows the CFTC’s approval of Kalshi’s bitcoin perpetual, BTCPERP, on May 29. Kalshi launched the product soon afterward, and added gold and silver perpetuals in September. Selig described the latest approval as extending that earlier decision beyond digital commodities and into traditional securities.
The framework for security futures dates to the Commodity Futures Modernization Act of 2000, which established a joint CFTC-SEC regime. The agencies signed a memorandum of understanding on March 11 to coordinate rulemaking and enforcement.
The CFTC’s interpretation of perpetual futures has also faced legal opposition. CME Group sued the agency in June over the Kalshi approval, arguing that contracts using exchanged funding payments should be classified as swaps under Dodd-Frank rather than as futures. That case remains pending, and equity-linked contracts could raise additional objections involving the SEC’s jurisdiction.
Selig has argued that U.S. regulation can offer market participants an alternative to offshore venues. The equity approval places the products within the oversight frameworks of both agencies, including their rules for margin, clearing and surveillance. The CFTC’s statement did not specify when trading will begin.
Sources: Bitcoin Magazine.