CFTC Staff Clear Fast Track for Turning Stock-Index Futures Into True Perpetuals
U.S. commodity regulator staff have opened a faster route for American futures exchanges to remove the expiration dates from existing perpetual-style futures that track broad stock indexes. The move was announced on October 5 in a staff letter, Letter 26-29, from the CFTC's Division of Market Oversight.
A perpetual-style contract, in simple terms, is a futures contract that has no fixed end date but still makes periodic funding payments, which help keep its price close to the index it tracks. The relief removes the last piece of the puzzle: the long-dated expiry, which on some of these contracts ran as far as 25 years out.
The main details in short
- The letter answers a request from Coinbase Derivatives, but applies to any designated contract market, or DCM, which is a CFTC-regulated futures exchange, that has matching existing contracts.
- It removes the normal 10-business-day waiting period for contract amendments, so approved changes can take effect as soon as the letter's conditions are met.
- Staff also said they will not seek or impose a stay on those amendments.
- Existing holders must get at least five calendar days' notice and a chance to close their positions on the old terms.
- The funding mechanism stays. No other material contract terms can change.
- The staff positions expire on October 20, 2026.
What the staff letter sets out
The letter is a staff-level position, not a vote by the full five-member commission, and it binds only the division that issued it. It follows the same template the division used earlier this year for digital assets such as cryptocurrencies.
To use the relief, an exchange has to file its contract amendments under Regulation 40.6(a) or 40.5, tell the division it plans to rely on the letter, certify that it meets the conditions, and name the contracts involved. Eligibility is limited to contracts that already exist and reference broad-based security indexes, which are indexes built around a wide group of stocks rather than a single company.
All other rules stay in force, including margin, position-limit and reporting requirements.
Five days' notice and a chance to exit
Before making any change, an exchange has to ask traders who hold open positions what harm the change might cause them, give at least five calendar days' notice, let those traders close out under the existing terms, and publish the risks of the change. Staff said these protections also cover customers who trade through an intermediary rather than directly with the exchange.
The division also cautioned that changing the terms of a contract with open positions can move its price and create gains or losses for traders, even when nothing about the market itself has changed.
Which contracts are in scope
Coinbase Derivatives publishes a product list that includes perpetual-style equity-index futures based on the AI10, China10, Defense10, Tech100 and US500 indexes. The Defiant cited that roster as an example of the kind of market the conversion process can apply to. The letter itself is not limited to Coinbase products.
The earlier digital asset version and the Kalshi case
The structure follows a June relief, requested by Coinbase and Bitnomial, that applied the same five-day notice and expiry-only amendment conditions to digital commodities. That relief covered digital assets and expired on June 30.
The staff letter also points to Kalshi as the immediate precedent. Kalshi asked the division to review its US500 perpetual futures submission under Regulation 40.3 on August 18, and the contract was treated as approved on October 2.
Why the classification is still disputed
What counts as a perpetual is not settled. In June, CME Group announced a legal challenge, arguing in its complaint that periodic payments and the lack of a fixed delivery date mean crypto perpetuals are swaps, a different category under the Dodd-Frank definition, rather than futures. The CFTC's May 29 order reached the opposite conclusion, approving Kalshi's bitcoin perpetual as a futures contract.
What this means for customer collateral
The classification dispute is not only about labels. It changes what a clearinghouse must model and how customer money is protected if a broker fails. The CFTC's bitcoin-perpetual order puts customer positions and margin in futures accounts. A comparison in The Defiant shows a default minimum modeled liquidation horizon of one day for futures against five days for cleared crypto swaps, with different treatment of legally segregated customer collateral.
Staff cautioned that the shorter horizon is not a promised cut in margin requirements, which stay risk-based, and that the legal segregation available to swap customers is not insurance. The CFTC has said operational problems, including theft, can still force customers to share losses in proportion to their holdings. That is why The Defiant frames CME's challenge as a fight over collateral treatment as much as one over leverage.
What happens next
The staff positions in Letter 26-29 are set to expire on October 20, 2026. The letter does not say whether the full commission will adopt the same approach, and it does not settle the classification question now before the courts in CME's case.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.