SEC and CFTC Open Joint Comment Period To Align Portfolio Margin Rules Across Securities, Derivatives

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) opened a joint public consultation on whether portfolio margin rules should be better aligned between securities and derivatives markets, with the stated objective of reducing fragmentation and potentially broadening cross-margining arrangements.

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The agencies said the comment period will remain open for 60 days after the request is published in the Federal Register, and they asked stakeholders to comment on how cross-margining could be implemented, including collateral treatment, risk management, customer protections, and possible effects on liquidity and competition.

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The consultation frames portfolio margin frameworks as the mechanism that determines how margin requirements are calculated for positions held by market participants, and it argues that evaluating positions strictly within separate silos can force firms to post more collateral than necessary for hedged exposures.

SEC Chair Paul Atkins said cross-margining can "unlock liquidity" that may otherwise remain constrained in segregated accounts, while the SEC and CFTC also pointed to operational impact when jurisdictional boundaries constrain risk management and market efficiency.

The request for comment also arrives as crypto derivatives offerings expand through regulated channels, following the May 29 CFTC approval of Bitcoin (BTC) perpetual futures for prediction market platform Kalshi and the clearance of Coinbase Financial Markets to provide eligible U.S. institutional clients access to certain Deribit-listed crypto options and perpetual futures.

In the consultation, the SEC and CFTC are requesting input on cross-margining, collateral treatment, risk management, customer protections and the potential effects on market liquidity and competition, as they seek to coordinate oversight across securities and derivatives markets.

SEC Chair Paul Atkins tied the proposal to liquidity, saying "Cross-margining offers a clear opportunity to unlock liquidity that remains frozen in separate accounts," and he added that harmonizing the agencies’ frameworks could help prevent jurisdictional overlap from limiting innovation and market efficiency.

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CFTC Chair Mike Selig, meanwhile, questioned how existing frameworks translate to crypto derivatives, saying cryptocurrency perpetual futures were not a "natural fit" for traditional commodity markets such as agriculture.

The consultation’s timing is linked to recent regulatory approvals that expanded crypto derivatives access, including Coinbase beginning offering eligible U.S. institutional clients access to certain Deribit-listed crypto options and perpetual futures "the same day" through its integration with Deribit.

The same pattern continued when Kraken launched CFTC-regulated perpetual futures for eligible U.S. users through its recently acquired Bitnomial platform, expanding domestic derivatives offerings beyond CME-listed crypto futures.

Beyond liquidity, the consultation asks for feedback on collateral treatment, including how assets should be handled when margin is calculated at the portfolio level rather than per account or per product category, and it also seeks views on risk management requirements tied to portfolio margin approaches.

The agencies’ framing emphasizes that portfolio margin approaches depend on models and assumptions about correlations and hedging effectiveness, and it says that robust approaches to risk measurement and collateral governance will be expected as rules become more harmonized.

The consultation also highlights that preserving oversight and investor protections remains part of the compliance challenge, because margin treatment affects operational planning, capital efficiency, and the ability to offer risk-managed products to clients under consistent standards.

The broader regulatory structure described in the consultation is that the SEC regulates securities and security-based swaps while the CFTC regulates futures, swaps, and other commodity derivatives, and the request aims to reduce regulatory friction when trading strategies span both categories.

The consultation’s scope includes topics such as the current portfolio margining model and practices, customer protection considerations, cross-margining and cross-product hedging, and operational and technical implementation issues, with the public comment period set to run for 60 days after publication in the Federal Register.