The Commodity Futures Trading Commission (CFTC) has cleared a path for U.S. derivatives exchanges to convert certain long-dated perpetual-style futures into true perpetual contracts, potentially expanding the availability of the products in domestic markets.
The CFTC’s Division of Market Oversight issued conditional no-action relief on October 3, announced on October 5, allowing designated contract markets to remove expiration dates from existing perpetual-style futures tied to broad-based security indexes. The relief applies provided exchanges meet a series of customer-protection and procedural requirements.
The move follows the CFTC’s recent determination that perpetual futures can qualify as futures contracts under the Commodity Exchange Act and comes as U.S. derivatives venues seek to offer products that have largely traded on offshore platforms.
CFTC clears route to true perpetual contracts
Under the relief, exchanges can amend eligible contracts by removing their expiration dates, turning existing perpetual-style products into true perpetual futures. Unlike conventional futures, perpetual contracts do not have a fixed expiration date. Instead, they generally use periodic funding payments to keep the contract price aligned with the underlying asset.
The CFTC’s latest letter applies specifically to perpetual-style futures referencing broad-based security indexes. It does not extend the relief to perpetual-style contracts referencing other types of assets.
The action followed an October 1 request from Coinbase Derivatives, a CFTC-registered designated contract market, which sought permission to make the changes without waiting through the standard 10-business-day process under the agency’s rules.
The CFTC said the relief is available to Coinbase Derivatives and other DCMs that meet the conditions outlined in the letter.
CFTC broadens crypto market-structure push
The latest relief comes as the CFTC also seeks public input on a potential federal framework for leveraged retail crypto trading. On October 5, the agency issued an advance notice of proposed rulemaking asking how Section 2(c)(2)(D) of the Commodity Exchange Act should apply to crypto asset transactions.
The notice proposes frameworks known as Regulation CTX and Regulation CAM. The CTX framework would cover certain leveraged retail crypto transactions, while CAM would create a tailored designated contract market category for exchanges offering those products.
CFTC Chairman Michael Selig has linked the initiative to the agency’s broader effort to establish a federal crypto market structure using existing authorities. The proposals would also address customer protections, including the use of futures commission merchants for retail leveraged transactions and potential conflicts involving platforms that combine trading, clearing, and custody.
The October 5 notice is an advance proposal, not a final rule. The CFTC is seeking industry feedback before deciding whether and how to proceed with future rulemaking.
Relief comes after CFTC approves index perpetuals
The regulatory development builds on the CFTC’s May 2026 order concerning perpetual futures linked to bitcoin and other digital commodities with deep, active, and continuous spot markets. In June, the agency said perpetual contracts referencing assets outside the scope of that order should undergo CFTC review under Regulation 40.3.
The agency later reviewed a broad-based security index perpetual futures contract submitted by KalshiEX. The contract was deemed approved on October 2, one day before the latest no-action letter was issued.
That approval helped establish a regulatory basis for treating the broad-based security index product as a futures contract, allowing exchanges to consider converting existing perpetual-style products that use long-dated expirations.
Exchanges face conditions for existing positions
The relief is particularly relevant for contracts that already have open interest because changing an expiration date can affect the value of existing positions. Before making the changes, a DCM must seek feedback from participants with open positions and provide at least five calendar days’ notice of the planned amendment.
Exchanges must also allow affected traders to close their positions under the existing contract terms and provide risk disclosures explaining the potential effects of the changes. The CFTC requires the exchanges to modify no other material contract terms besides the expiration date. DCMs must file the amendments under either Regulation 40.6 or Regulation 40.5 and notify the Division of Market Oversight that they intend to rely on the no-action relief.
U.S. perpetual futures market remains largely offshore
Perpetual futures have become a major part of crypto derivatives trading, but much of that activity has historically taken place on offshore exchanges. The CFTC said the regulatory uncertainty surrounding the treatment of perpetual futures in U.S. derivatives markets contributed to the use of perpetual-style contracts with long-dated expirations instead of contracts with no fixed maturity.
Those products use funding mechanisms similar to true perpetual futures, despite technically carrying expiration dates that can extend for decades. The latest relief addresses that distinction by allowing eligible contracts to have their expiration dates removed, subject to the CFTC’s conditions.
The agency’s no-action positions expire on October 20, 2026, and the letter does not change the underlying requirements of the Commodity Exchange Act or CFTC regulations.
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