CFTC Opens Door to U.S. Stock Perpetual Futures in Major Derivatives Expansion
The Commodity Futures Trading Commission (CFTC) has approved a framework allowing perpetual futures linked to individual stocks to trade on U.S.-regulated exchanges for the first time.
The decision, announced Tuesday, marks a major expansion of perpetual futures beyond cryptocurrencies and into traditional equity markets. The CFTC classified the contracts, known as Equity Perps, as security futures products under Commission Regulation 40.3.
The products can be listed on exchanges registered with the CFTC as designated contract markets and also registered with the Securities and Exchange Commission (SEC) as national securities exchanges for security futures.
The approval brings the contracts under the Commodity Exchange Act, federal securities laws and the regulatory requirements of both agencies. However, the CFTC has not named any exchanges or specified which stocks will be available for trading. Individual exchanges are expected to announce listing plans and launch dates.
Perpetual futures are derivatives contracts without expiration dates. Unlike traditional futures, which settle on a predetermined date, perpetual contracts use periodic funding payments between buyers and sellers to keep their prices close to the underlying asset's market value.
The product has become one of the largest segments of crypto derivatives trading, although much of its activity has historically taken place on offshore platforms.
The latest decision follows the CFTC's approval of Kalshi's Bitcoin perpetual futures contract, BTCPERP, on May 29. Kalshi subsequently launched the product and expanded its offering to include gold and silver perpetual contracts in September.
The latest approval extends that approach from digital assets to traditional securities, opening another potential market for perpetual futures in the United States.
The regulatory framework also builds on the Commodity Futures Modernization Act of 2000, which established a shared oversight structure between the CFTC and SEC for security futures. Both agencies signed a memorandum of understanding on March 11 to improve coordination on rulemaking and enforcement.
However, the legal status of perpetual futures remains contested. CME Group filed a lawsuit against the CFTC in June over the approval of Kalshi's Bitcoin perpetual contract, arguing that its funding-payment structure makes it a swap under the Dodd-Frank Act rather than a futures contract. The case remains unresolved.
Introducing stock-based perpetual futures could bring additional legal questions, particularly because the SEC would also have oversight responsibilities.
The announcement also comes shortly after the $6.3 billion security breach at Binance on October 29, which saw attackers drain funds from the exchange's hot wallets in approximately 20 minutes. Binance has since reopened withdrawals and said it has replenished around 95% of the affected assets.
The incident has renewed discussions about the risks of offshore crypto platforms and the need for stronger oversight.
The CFTC has also proposed a voluntary federal registration framework for crypto exchanges, with potential requirements covering cybersecurity, proof of reserves and asset custody. However, making such registration mandatory would require congressional approval.
By allowing equity perpetual futures on dual-registered exchanges, the CFTC is seeking to bring a product popular on offshore platforms into a market governed by U.S. margin, clearing and surveillance requirements.
The move could give American traders access to a wider range of derivatives products while creating new opportunities for regulated exchanges to compete with offshore trading platforms.