The CFTC has greenlit the first-ever perpetual futures tied to individual U.S. stocks, clearing the way for the crypto-style, no-expiration contract model to trade on regulated American equity derivatives venues. What the approval means On Nov. 3 the Commodity Futures Trading Commission announced that perpetual contracts on single equity securities — dubbed “Equity Perps” — may begin trading on CFTC-registered exchanges that have also registered with the SEC as national securities exchanges for security futures trading. Chairman Michael Selig said the move brings the perpetual structure “into a regulated framework” for U.S. investors, highlighting its uses in risk management and price discovery. Legal and regulatory framework The CFTC said the contracts are deemed approved under Commission Regulation 40.3 as security futures products under the Commodity Futures Modernization Act of 2000. That classification places equity perpetuals under the Commodity Exchange Act and relevant federal securities laws, subjecting them to oversight by both the CFTC and the SEC. The approval was granted via the agency’s deemed-approval process, in which products are treated as approved when the statutory review period (initially 45 days, with possible extensions) ends without a notice of non-approval. Who has filed Three firms filed rule proposals ahead of the clearance: Kalshi, Coinbase Derivatives and Bitnomial. Each has outlined contract mechanics, margin proposals and eligibility criteria: - Kalshi: Proposes perpetuals with no preset expiration and a minimum customer margin floor of 15.50% of current market value — meaning a $10,000 position would require $1,550 in margin (about 6.45x exposure). Long and short holders would exchange funding payments tied to the spread between the perpetual and the underlying stock. Kalshi’s filings also require underlying securities to meet strict liquidity and size thresholds, including at least $100 billion market capitalization, more than 20 million shares of estimated deliverable supply, and $450 million in average daily trading value over six months. Its proposed trading hours run Sunday 6:00 p.m. ET through Friday 5:00 p.m. ET, with a daily maintenance break from 5:00–6:00 p.m. Trading would halt for regulatory pauses on the underlying security. - Coinbase Derivatives: Filed rules for cash-settled perpetual futures on individual stocks and ETF shares, proposing margin requirements generally at or above 15% of current market value. Coinbase’s application — which follows its prior offering of stock perpetuals offshore — outlined plans for more than 50 single-stock perpetuals and said contract-specific materials would specify trading hours, pricing methods and funding arrangements. - Bitnomial: Proposed a customer-margin floor of 15.25% for unhedged positions, while allowing clearing firms and intermediaries to require higher collateral. Its filing also notes the SEC may, after consulting the CFTC, abrogate a CFTC approval within 60 days and require refiling under the standard securities-exchange review process. Context and precedent The CFTC tied this announcement to its May 29 decision that approved Kalshi’s Bitcoin perpetual futures contract, which references a regulated Bitcoin spot price. In a same-day policy note, the agency said perpetual contracts referencing other assets should be reviewed case-by-case because contract features depend on the nature of the underlying market. Market reaction and pushback Not everyone agrees with the regulatory treatment. Cboe argued in an Oct. 14 letter that stock perpetuals should not be handled as security futures and urged the SEC to subject the rules to the standard securities-exchange review. Advocacy group Better Markets raised similar concerns on Nov. 2, warning that high leverage can quickly wipe out investor deposits and stressing that perpetual holders do not have stock ownership rights. Broader industry moves Separately, Intercontinental Exchange (parent of the NYSE) disclosed on Oct. 29 an agreement with Trade[XYZ] to build a dedicated U.S. market and clearing structure for Hyperliquid-based perpetuals, covering equities, crypto, commodities and FX — subject to regulatory approvals. Why it matters for crypto and equities Perpetual futures are a cornerstone of the crypto derivatives ecosystem because they allow continuous exposure (no expiry) and use periodic funding payments to anchor contract prices to the underlying. Bringing that structure into regulated U.S. equity markets could expand product choice for institutional and retail traders, but it also raises novel regulatory, market-structure and investor-protection questions that the CFTC and SEC will continue to wrestle with. What’s next Eligible exchanges that have completed both CFTC and SEC registration steps may begin listing these products within the statutory review windows. Continued scrutiny from the SEC, industry rivals and public-interest groups means expect further debate and potential refinements as trading begins. Read more AI-generated news on: https://app.chaingpt.org/news