CFTC Allows Perpetual Futures on Individual Stocks on US-Registered Exchanges

The Commodity FuturesФьючерсыA futures contract is a standardized exchange-traded contract to buy or sell an asset at a price agreed in advance, on a set date in the future. Trading Commission (CFTC) has allowed perpetual futuresБессрочный фьючерсPerpetual futures are derivative contracts on a crypto asset with no expiry date, whose price is kept close to the spot price by a funding rate mechanism. on individual stocks to trade on exchanges registered with the agency. The CFTC said on Tuesday, November 3, that such contracts can now trade on regulated U.S. platforms for the first time. CFTC Chairman Michael Selig linked the decision to his push to bring perpetual products onshore. For the market, this means perpetual instruments, long common mainly in crypto and on offshoreОфшорAn offshore jurisdiction is a place where a company or bank account is registered, chosen for light taxation and regulation, often outside the country where the owners or clients are based. platforms, now have a path into regulated infrastructure.

What is now permitted

Perpetual futures track the price of an underlying asset but have no expiration date. A trader can hold a leveragedКредитное плечоLeverage (margin trading) is the use of borrowed funds to increase the size of a position while committing less of your own capital. Profit and loss are calculated on the full position size. position indefinitely as long as they meet margin and funding requirements. Until now, U.S. traders had virtually no access to such products. Contracts on individual stocks can now begin trading on registered exchanges. According to Decrypt, Coinbase has already filed to list single-stock perpetuals on Apple, Tesla and Nvidia. PYMNTS cites the same outlet, so this detail rests on a single source.

Who regulates and on what basis

According to Decrypt, the contracts were approved as security futures products under the Commodity Futures Modernization Act of 2000. This means joint oversight by the CFTC and the Securities and Exchange Commission (SEC). Selig credits a memorandum of understanding between the two agencies, signed in March, with resolving the legal uncertainty. SEC Chairman Paul Atkins had earlier described such products as stranded in a regulatory 'no man's land'. According to PYMNTS, the memorandum sets a coordination mechanism for products that combine securities and derivatives.

Context: the push for perps in the US

The decision follows the approval of the first BitcoinБиткоинBitcoin (BTC) is the first and best-known decentralized cryptocurrency, running on its eponymous blockchain network with no central issuer or intermediary bank. perpetual futures on a regulated U.S. exchange. Decrypt reports that the CFTC cleared such contracts for Kalshi earlier this year. The outlet also writes that the agency has dismissed a CME lawsuit challenging crypto perpetual futures and is discussing a plan to bring crypto exchanges under federal oversight. Selig has recently argued that regulated platforms are safer than offshore ones. Last week, according to Decrypt, he cited the record Binance hack as an argument for U.S. oversight of offshore exchanges.

Risks remain

PYMNTS notes that regulation does not remove the risks of margin trading. Margin and funding requirements still apply without an expiration date. According to the outlet, the core aim of the policy is to fit these risks into the existing supervisory framework.