CFTC and SEC collaboration opens new trading avenues for regulated equity derivatives in the US.
US investors can begin accessing perpetual futures tied to individual stocks through eligible regulated exchanges for the first time, following a regulatory development announced by CFTC Chairman Michael Selig on Tuesday.
The contracts, called Equity Perps, may trade on designated contract markets that are also registered with the SEC as national securities exchanges under the notice-registration framework for security futures products.
Selig said the move would bring equity perpetual futures into the US regulatory system, giving traders access to instruments used for risk management and price discovery without having to rely on offshore and potentially unregulated platforms. He said the CFTC’s regulatory framework would provide protections for domestic market participants as these products enter regulated US markets.
The development draws on the Commodity Futures Modernization Act of 2000 and the CFTC-SEC Memorandum of Understanding, according to Selig.
He said differences between the agencies’ regulatory approaches had previously created uncertainty around security futures and equity perpetual futures, leaving them without a clear path to market. The CFTC and SEC have since improved coordination and are seeking to provide regulatory clarity for innovative products while reducing disputes over their respective jurisdictions.
