Notice2026-11020
Policy Statement Concerning the Listing of Perpetual Contracts
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 3, 2026
Issuing agencies
Commodity Futures Trading Commission
Abstract
This policy statement describes the views of the Commodity Futures Trading Commission (the "CFTC" or "Commission") concerning the listing of perpetual contracts. Contemporaneously with the issuance of this policy statement, the Commission has issued an order (the "Order") permitting the listing of a perpetual contract that references the spot price of bitcoin by a designated contract market ("DCM") as a futures contract. Given the unique characteristics of perpetual contracts, which tend to vary based on the underlying asset they reference, the Commission is of the view that the case-by-case review process detailed in Commission Regulation 40.3 is appropriate for the listing of perpetual contracts that reference asset classes that are not contemplated in the Order.
Full Text
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<title>Federal Register, Volume 91 Issue 106 (Wednesday, June 3, 2026)</title>
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[Federal Register Volume 91, Number 106 (Wednesday, June 3, 2026)]
[Notices]
[Pages 33160-33162]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11020]
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COMMODITY FUTURES TRADING COMMISSION
Policy Statement Concerning the Listing of Perpetual Contracts
AGENCY: Commodity Futures Trading Commission.
ACTION: Policy statement.
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SUMMARY: This policy statement describes the views of the Commodity
Futures Trading Commission (the ``CFTC'' or ``Commission'') concerning
the listing of perpetual contracts. Contemporaneously with the issuance
of this policy statement, the Commission has issued an order (the
``Order'') permitting the listing of a perpetual contract that
references the spot price of bitcoin by a designated contract market
(``DCM'') as a futures contract. Given the unique characteristics of
perpetual contracts, which tend to vary based on the underlying asset
they reference, the Commission is of the view that the case-by-case
review process detailed in Commission Regulation 40.3 is appropriate
for the listing of perpetual contracts that reference asset classes
that are not contemplated in the Order.
DATES: The Commission's policy statement is adopted as of May 29, 2026.
FOR FURTHER INFORMATION CONTACT: Roger Smith, 202-418-5344,
<a href="/cdn-cgi/l/email-protection#740607191d001c34171200175a131b02"><span class="__cf_email__" data-cfemail="7d0f0e101409153d1e1b091e531a120b">[email protected]</span></a>, Division of Market Oversight, Commodity Futures
Trading Commission, 77 West Jackson Blvd., Suite 800, Chicago, Illinois
60604 or Stephen Andrews, Deputy General Counsel for Regulation, 202-
308-7563, <a href="/cdn-cgi/l/email-protection#96e5f2f7f8f2e4f3e1e5d6f5f0e2f5b8f1f9e0"><span class="__cf_email__" data-cfemail="750611141b110710020635161301165b121a03">[email protected]</span></a>, Office of the General Counsel, Commodity
Futures Trading Commission, Three Lafayette Centre, 1151 21st Street
NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Introduction and Background
Perpetual contracts are derivative contracts that have no fixed
expiration date, and which rely on a periodic
[[Page 33161]]
funding rate mechanism, rather than a fixed expiration date, to
maintain relative price parity with the underlying asset's spot price.
Perpetual contracts have become a dominant form of crypto derivative
trading in global markets. However, given the regulatory uncertainty
concerning the appropriate classification of these types of contracts
in the U.S. derivatives markets, the market for perpetual contracts has
largely developed outside of the United States, with the majority of
trading occurring on offshore trading venues.
The Commission has taken a series of steps over the past year to
develop a workable domestic framework for these products. On April 21,
2025, Commission staff issued a Request for Comment on the Trading and
Clearing of ``Perpetual'' Style Derivatives (the ``Request'').\1\ The
Request solicited public input on the characteristics, use cases,
regulatory classification, and risks of perpetual contracts. The
Request was issued in conjunction with a Request for Comment on Trading
and Clearing Derivatives on a 24/7 Basis, which sought public input on
the operational, surveillance, clearing, and margin implications of
extending CFTC-regulated derivatives trading to a continuous basis.\2\
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\1\ CFTC Release No. 9069-25, Request for Comment on the Trading
and Clearing of ``Perpetual'' Style Derivatives (April 21, 2025).
\2\ CFTC Release No. 9068-25, Request for Comment on Trading and
Clearing Derivatives on a 24/7 Basis, (April 21, 2025).
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On July 30, 2025, the President's Working Group on Digital Asset
Markets issued its report, Strengthening American Leadership in Digital
Financial Technology (the ``PWG Report'').\3\ The PWG Report
recommended that the Commission and the U.S. Securities and Exchange
Commission permit eligible market participants to access derivatives,
including perpetual contracts, through regulated intermediaries and
that the agencies use existing exemptive and interpretative authorities
to provide near-term clarity for innovative derivatives products.
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\3\ President's Working Group on Digital Asset Markets,
Strengthening American Leadership in Digital Financial Technology
(July 30, 2025), available at <a href="https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf</a>.
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As discussed, this policy statement is being released in
conjunction with the Order,\4\ which approved the listing of a
perpetual contract that references the spot price of bitcoin by a DCM
as a futures contract. The Commission issues this policy statement to
articulate, for the benefit of registrants, market participants, and
the public, its view that perpetual contracts that reference underlying
asset classes that are not contemplated in the Order \5\ should be
submitted for Commission review and approval pursuant to the voluntary
product approval process under Commission Regulation 40.3.\6\
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\4\ See Order Approving KalshiEX LLC BTCPERP Futures Contract,
May 29, 2026.
\5\ These types of asset classes include, but are not limited
to, agricultural products, precious metals, equity securities, and
narrow-based security indexes. Each asset class will raise different
considerations and merit independent analysis and review based on
their unique circumstances. For example, perpetual contracts are
likely particularly ill-suited for agricultural products based on
the considerations identified in the Order, while perpetual
contracts that reference equity securities or narrow-based security
indexes, among others, would benefit from review by the Commission
and the U.S. Securities and Exchange Commission.
\6\ 17 CFR 40.3.
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This policy statement is a general statement of policy issued under
5 U.S.C. 553(b)(A). It does not impose any obligation on any person,
modify or supersede any provision of the Commodity Exchange Act
(``CEA'') or the Commission's regulations thereunder, create any right
or benefit enforceable at law or in equity, and is not subject to the
notice-and-comment requirements of the Administrative Procedure Act.
Each contract submitted to the Commission under part 40 will continue
to be evaluated on its own terms.
II. The Structural Distinctiveness of Perpetual Contracts
Traditional futures contracts rely primarily on a fixed expiration
date to achieve convergence with the underlying asset's spot price.
Futures contracts have emerged as a primary instrument in the U.S.
derivatives markets for hedgers and traders to effectively secure a
price for an asset today in connection with a transaction that will
occur in the future. Price convergence with the underlying spot price
at expiration is thus inherent to the design of a traditional futures
contract and ultimately what makes them a useful instrument for hedging
and price discovery.
A perpetual contract has no fixed expiration date through which it
can achieve convergence. It therefore requires a substitute mechanism
to maintain relative price parity with the underlying spot price of the
asset that it references. The mechanism that has emerged in the global
crypto asset markets is known as a funding rate, or a periodic payment
between the long and short sides of the contract, the direction and
magnitude of which is generally determined by the difference between
the perpetual contract's market price and the underlying asset's spot
price. When a perpetual contract trades above the spot price, the
traders with long positions make payments while the traders with short
positions receive payments; and vice versa. These payments are intended
to create an economic incentive for market participants to arbitrage
away the price differential by opening positions on whichever side of
the market is accruing the payments. In this way, the funding rate is
designed to keep closely aligned a perpetual contract's price to the
underlying asset's price and functions as a replacement to the
traditional expiration-based convergence mechanism upon which a futures
contract typically relies.
Perpetual contracts raise novel and complex questions relating to
market structure, customer protection, resilience during periods of
market stress, and consistency with the Core Principles applicable to
registrants under the CEA. For example, a perpetual contract's design
and characteristics raise important considerations with respect to DCM
Core Principle 3, which requires that a DCM list only those contracts
that are not readily susceptible to manipulation.\7\ For a traditional,
cash-settled futures contract, the susceptibility-to-manipulation
analysis directed at the cash settlement reference price is an analysis
of one moment in time: the settlement reference price must be reliable
at expiry. For a perpetual contract, however, the reference must be
reliable at every funding interval, without interruption, for as long
as the contract remains active.
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\7\ 7 U.S.C. 7(d)(3); see also 17 CFR part 38, app. C.
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It is therefore the Commission's view that perpetual contracts that
reference asset classes that are not contemplated in the Order should
be submitted for Commission review and approval pursuant to the
voluntary product approval process under Commission Regulation 40.3.
The Commission notes that Regulation 40.2 permits registrants to
self-certify new products where the submitting registrant determines
that the product complies with the CEA and Commission regulations
thereunder.\8\ However, given the novel characteristics of perpetual
contracts, including their lack of a traditional expiration date and
the complex questions concerning, among others, market structure and
customer protections, the Commission
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believes that the public interest is best served by requiring perpetual
contracts that reference assets that are not contemplated in the Order
to undergo Commission review and approval pursuant to Commission
Regulation 40.3.
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\8\ 17 CFR 40.2.
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III. Submissions Under Commission Regulation 40.3
The Commission believes that the Commission Regulation 40.3 process
provides important benefits for regulators, market participants, and
the public. Prior review promotes transparency, facilitates engagement
between Commission staff and registrants during product development,
and provides greater regulatory clarity for market participants and
members of the public seeking to responsibly innovate within the CFTC's
regulatory framework.
In accordance with the purpose of the CEA, the Commission remains
committed to promoting responsible innovation and fair competition in
the U.S. derivatives markets.\9\ The Commission believes that clear
regulatory pathways and transparent supervisory expectations are
essential to ensuring that emerging technologies and novel financial
products can develop responsibly within regulated U.S. markets rather
than migrating to less regulated jurisdictions outside of the United
States.
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\9\ 7 U.S.C. 5(b).
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This policy statement is intended solely to provide the
Commission's views concerning the listing of perpetual contracts and
does not alter or amend the CEA or the Commission's regulations
thereunder. Nothing in this policy statement is intended to be binding
or foreclose the possibility that, on appropriate facts and contract
design, the Commission might in the future address perpetual contracts
through separate policy statements, interpretative guidance, or the
rulemaking process; the Commission makes no determination as to that
possibility here.
Issued in Washington, DC, on May 29, 2026, by the Commission.
Christopher Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Policy Statement Concerning the Listing of Perpetual Contracts--
Commission Voting Summary
On this matter, Chairman Selig voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2026-11020 Filed 6-2-26; 8:45 am]
BILLING CODE 6351-01-P
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