Key Highlights
- Ondo Finance has submitted three comment letters to the SEC and CFTC covering perpetual futures, portfolio margining, and market data reporting.
- The firm argued that several existing market-structure rules were designed around older technological and settlement constraints and should be reassessed as blockchain infrastructure evolves.
- Ondo said perpetual futures can achieve continuous price convergence through funding rates and mark-to-market mechanisms, removing the need for traditional fixed expiration dates.
Ondo Finance, a decentralized finance (DeFi) platform, has submitted three comment letters to the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission addressing perpetual futures, portfolio margining, and market data reporting.
The letters, filed recently, examine three separate rule sets. According to Ondo, each rule was developed for market structures that operated under earlier technological constraints.
The company stated that technology now allows certain market-structure problems to be addressed directly and that regulation should evaluate whether proposed solutions function effectively rather than require them to replicate prior methods.
Ondo noted that many established market conventions originated as responses to the technology available at the time they were introduced. Those conventions, the company said, function as implementations rather than fixed objectives.
Product design and convergence mechanisms
One letter focuses on product design. Traditional futures contracts use fixed expiration dates to promote price convergence. Ondo stated that perpetual futures can achieve continuous convergence through funding rates and mark-to-market requirements. The company argued that existing security futures law already accommodates this design approach.
Ondo Perps, a product operated by the firm since July, was cited as an example of this structure operating in practice.
Risk measurement and margin requirements
A second letter addresses margin frameworks. Traditional margin rules were constructed around slower settlement cycles and less frequent observation of positions. Ondo stated that current infrastructure can settle exposure more frequently and measure related positions and collateral with greater precision.
The company argued that margin requirements should reflect the actual risk of a position and should recognize real-time measurement capabilities rather than remain tied to older settlement intervals.
Market data and recordkeeping
The third letter concerns market data reporting. Conventional reporting systems reconstruct trading activity from separate private records after transactions occur. Ondo stated that on-chain and attested infrastructure can generate a shared, verifiable record as part of the transaction process itself.
The company argued that regulators should be permitted to rely on that primary record instead of requiring a secondary system to recreate the same information.
Earlier comment on equity market rules
The three letters follow an earlier filing by Ondo. On August 12, the company submitted a comment letter to the SEC regarding a proposal to rescind Rules 611 and 610(e) of Regulation NMS.
In that letter, Ondo supported the removal of both rules while stating that any replacement framework should account for alternative execution models and tokenized securities alongside traditional equity markets.
Rule 611, also called the trade-through rule, generally bars trading centers from filling orders at prices inferior to protected quotations shown on other venues in the national market system. Rule 610(e) covers restrictions related to locked and crossed quotations.
Onshoring of related market activity
Ondo also addressed the offshore trading of perpetual referencing U.S.-listed stocks. The company stated that such activity currently occurs entirely offshore. It argued that both the SEC and the CFTC have identified onshoring of this type of market as a priority and that the existing legal framework already supports bringing the activity under U.S. oversight.
Ondo said it looks forward to continued engagement with both agencies on the application of existing rules to products that operate under current technological conditions.
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