The Commodity Futures Trading Commission has cleared perpetual futures tied to individual US stocks, opening a route for the products to trade on US venues registered with both the CFTC and Securities and Exchange Commission. The decision, announced Nov. 3 by CFTC Chairman Michael Selig, treats the contracts as security futures products approved under Regulation 40. 3 and the Commodity Futures Modernization Act of 2000.
Perpetual futures let traders take positions on an asset’s price without owning it and without a fixed expiration date. The structure became prominent in cryptocurrency markets, but the new clearance extends it to traditional equities.
The decision followed September applications from Coinbase, Kalshi and Bitnomial, the exchange operated by Kraken parent Payward, to offer contracts linked to individual US stocks. Com later proposed weekday, around-the-clock trading. The CFTC had already approved a Bitcoin perpetual futures contract for Kalshi in May and granted Coinbase relief connected to certain crypto perpetuals listed on an affiliated foreign exchange. Selig did not identify which exchanges would list stock contracts or say when trading would begin.
The approval immediately became the subject of a federal court fight. The Capital Markets Alliance, whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association, sued to block the products, arguing that they are security-based swaps under SEC jurisdiction and that the CFTC did not adequately explain its legal reasoning or consider investor effects. Cboe said the products should remain within the securities-law framework and requested injunctive relief.
3, Judge Valerie Caproni denied the alliance’s request for an emergency temporary restraining order, but found that the plaintiffs were likely to succeed on their claim that the CFTC lacked authority to approve single-stock perpetual derivatives as security futures. The order said the contracts do not appear to involve a sale for future delivery of a single security and instead appear to fit the statutory definition of swaps. The judge also said the public interest favored preventing a major disruption to equity markets, while concluding that the alliance had not shown the immediate, irreparable harm required for emergency relief. The case continues, with briefing on a preliminary injunction scheduled for November 6 and 10, leaving the products’ legal status and launch timing unresolved.