CFTC says equity perps can trade on US exchanges, but gives no date

CFTC Chairman Michael Selig said on Nov. 3 that perpetual futures on individual stocks "can begin trading for the first time on CFTC-registered exchanges." The statement names no exchange, no stocks and no start date.

Perpetual futures, or perps, are futures contracts with no expiry. A trader can hold a position as long as margin allows, and periodic funding payments keep the contract price close to the underlying asset.

What the CFTC actually said

In the statement, Selig said the contracts "were deemed approved by the Commission, pursuant to Commission Regulation 40.3, as security futures products" under the Commodity Futures Modernization Act of 2000. That puts them under the rules of both the CFTC and the SEC. The accompanying press release says the exchanges in question are designated contract markets that are also registered with the SEC as notice-registered national securities exchanges for security futures. An exchange without both registrations does not qualify.

Selig presented the move as a way to bring trading back from "offshore, and often unregulated, venues." He tied it to two earlier steps: the May 29 approval of Kalshi's bitcoin perpetual contract and a March memorandum of understanding between the CFTC and the SEC. CME Group challenged that approval in court in June, in the dispute with CME over bitcoin perpetual contracts.

What the statement leaves out

Selig does not say which exchange will list a first contract, which stocks it will track or when trading would begin. He also does not say who has filed. The securities industry group SIFMA said on Nov. 3 that it had sent the SEC and CFTC a comment letter on rule filings by four designated contract markets to list equity perpetuals as security futures. Its press release does not name the four.

For readers outside the US, the product itself is not new. Coinbase already offers stock perps to non-US traders. The CFTC statement is about building a similar product inside the US rulebook, and it arrives while the agency is also handling its recent fight with Utah over prediction markets.

SIFMA argues that equity perpetuals "differ meaningfully" from the single-stock futures the security futures framework was built for. It wants the agencies to settle whether they are security futures, swaps or security-based swaps. Its letter asks the CFTC to stay the filings, or the SEC to abrogate them under Section 19(b)(1) of the Securities Exchange Act, so the contracts would be refiled with public notice and comment.