CFTC Says Equity Perpetual Futures Can Start Trading on Dually Registered Exchanges

Perpetual futures on individual stocks can now begin trading in the United States, the Commodity Futures Trading Commission said on 3 November. In a statement, Chairman Michael S. Selig said the contracts, which he called "Equity Perps," may trade on designated contract markets that are also registered with the Securities and Exchange Commission as notice-registered national securities exchanges for security futures.

The chairman's rationale is that US participants should be able to use these products "within the protections of the CFTC's proven regulatory framework, rather than being forced to turn to offshore, and often unregulated, venues." He framed the move as the end of a period in which products such as security futures and equity perpetuals were left in what SEC Chairman Paul S. Atkins described as a regulatory "no man's land" because the two agencies were not aligned. The statement relies on the Commodity Futures Modernization Act of 2000 and a CFTC-SEC memorandum of understanding.

The release is the regulator's own account of its action, not independent confirmation of how the market will work. It does not name any exchange that plans to list the contracts, set out margin or leverage rules, or give a start date. Those details will determine whether the change simply moves existing offshore demand onto regulated venues or widens retail access to leveraged single-stock exposure.

Analysis: the clearest beneficiaries are the dually registered exchanges that gain a product category they can now offer, and any platform that can build compliant access for it. The people who carry the risk are retail traders who may find that a regulated label is taken as a signal of safety, even though perpetual contracts with leverage can produce rapid losses. The alternative the CFTC chose was to keep these products outside US markets, and that option had its own costs, chiefly that US users would continue to trade on venues with weaker oversight.

What would change this assessment is the rulebook: investor-protection standards, leverage limits, disclosure requirements and whether the SEC's position matches the CFTC's on the same contracts. Until those are published and an exchange actually lists an Equity Perp, the decision is a permission, not a functioning market.