Financeupdated 1h ago2 min read
Archive photo · 5 December 2024CFTC Approves Perpetual Futures Tied to Individual US Stocks on CFTC-Registered Exchanges
“The hasty roll out of financial products that circumvent well established regulatory frameworks erodes investor protection”
“He said the latest approval would allow US market participants to use perpetual futures for risk management and price discovery”
Photo: Dclemens1971, CC BY 4.0 · Cropped for layout
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CFTC approved listing of equity perpetual futures tied to individual stocks on US exchanges. They operate under Regulation 40.3 with joint CFTC-SEC oversight.
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CFTC clears equity perps
The Commodity Futures Trading Commission approved perpetual futures trading tied to individual US stocks on CFTC-registered exchanges, extending perpetuals beyond digital commodities into traditional securities. CFTC Chairman Michael Selig said the contracts were deemed approved under Commission Rule 40.3 and framed as security futures products under the Commodity Futures Modernization Act of 2000.
Selig also said the move would allow US market participants to access perpetual futures under US regulatory safeguards rather than being "forced to turn to offshore platforms, often unregulated." The CFTC did not specify which exchanges would list the contracts, and it did not provide a timeline for when trading would begin.
Legal fight over jurisdiction
The Capital Markets Alliance, backed by Cboe and Citadel Securities, filed a federal lawsuit in the US District Court for the Southern District of New York seeking to overturn the CFTC’s approval and prevent the contracts from trading while the case proceeds. Adam Ford, secretary of the Capital Markets Alliance, argued that "The hasty roll out of financial products that circumvent well established regulatory frameworks erodes investor protection".
The Capital Markets Alliance said the products qualify as security based swaps under the Securities and Exchange Commission’s exclusive jurisdiction and claimed the CFTC violated the Administrative Procedure Act by failing to explain its decision or adequately consider the impact on investors and securities markets. A CFTC spokesperson called the lawsuit a troubling attempt to interfere with regulated markets, Reuters reported, while the CFTC defended its approval by saying the contracts were approved as security futures under the Commodity Futures Modernization Act of 2000.
What comes next
The CFTC’s approval builds on prior steps, including the May approval of the first truly perpetual Bitcoin futures on a regulated exchange granted on May 29 to KalshiEX. The CFTC also relied on a shared supervision framework under the Commodity Futures Modernization Act of 2000, with trading subject to the Commodity Exchange Act, federal securities laws, and regulatory frameworks of both the CFTC and the SEC.
The Capital Markets Alliance lawsuit sought to prevent the approvals from taking effect while the case proceeds, and it targeted the CFTC’s decision to allow perpetual derivatives tied to individual stocks to begin trading on qualifying regulated exchanges. Finance Magnates said the approval extends perpetual futures in the US beyond digital assets and into traditional securities, while it also noted that the CFTC did not identify which exchanges received approval, which stocks would be available, or when trading would begin.