CFTC-registered exchanges seek approval to list single stock perpetual futures

There continue to be questions, however, about whether perpetual contracts are appropriately categorized as futures contracts, or as swaps. In the equities context, these questions have a direct bearing on the scope of the CFTC’s regulatory interest, and the scope of the regulatory interest of the Securities and Exchange Commission (SEC). The CFTC and SEC also have raised questions about what effects the introduction of perpetual contracts referencing equity securities may have on the underlying securities markets, including with respect to liquidity and price discovery. 

These open questions may end up impacting both the substance and the timing of disposition of the pending requests for approval to list single stock perpetual futures. However, competing offshore offerings have raised concerns about regulatory arbitrage that appear to have gained traction with CFTC leadership, suggesting that there may be agency openness to onshoring these types of contracts. If this comes to pass, both the CFTC and SEC will need to give careful thought to questions that they, themselves, have raised about how such contracts may affect liquidity formation, price discovery and hedging activity, particularly in underlying securities markets. The agencies—along with exchanges, market participants and issuers—also will need to consider how such contracts may impact the capital-raising function of the underlying securities markets and how effective risk management, cross-market surveillance and customer protection can be ensured.

What are perpetual contracts?

Perpetual contracts are cash-settled derivative contracts that do not have an expiration date, allowing positions to be held indefinitely. Traditional futures contracts have pre-determined expiration dates. This incentivizes convergence—the movement of the futures price toward the underlying spot reference price as expiration approaches.

Since perpetual contracts do not expire, they rely on a different mechanism—a funding rate mechanism—to align the perpetual price with the underlying spot reference price. At regular intervals, the perpetual contract’s price is compared against the underlying spot reference price. The premium or discount is converted into a funding payment. If the perpetual contract is trading above the reference price, longs make a funding payment to shorts. If the perpetual contract is trading below the reference price, shorts make a funding payment to longs. These funding flows create an economic incentive for traders to arbitrage away the price differential, drawing the trading price of the perpetual toward the underlying spot reference price.

Perpetual contracts first gained popularity in the digital assets space. Offshore platforms, such as Hyperliquid and Polymarket, are offering perpetual contracts on other asset classes as well, including physical commodities such as crude oil and precious metals, security indexes, publicly traded common stock and ETF shares. 

CFTC leadership has been open about its desire to clarify the regulatory status of perpetual contracts in order to facilitate their trading onshore, on regulated derivatives exchanges.¹ Given that perpetual contracts lack an expiration date, questions have been raised about whether they are appropriately categorized as futures contracts, or whether they are better understood to be swaps. The statutory definition of a “swap” includes “any . . . contract . . . that provides . . . for the exchange . . . of 1 or more payments based on the value or level of 1 or more . . . rates, currencies, commodities, securities, instruments of indebtedness, indices, quantitative measures, or other financial or economic interests or property of any kind . . . and that transfers, as between the parties . . . the financial risk associated with a future change in any such value or level without also conveying . . . ownership interest.”²

On May 29, 2026, the CFTC issued an order approving the listing for trading, as futures contracts, of perpetual contracts on the spot price of Bitcoin “or other digital commodities that have deep, active, and continuous spot market trading.”³ The CFTC emphasized that its approval did not extend to perpetual contracts on asset classes other than digital commodities and signaled—both in the order itself and in an accompanying policy statement—that perpetual contracts on other asset classes would be evaluated on a case-by-case basis in light of the jurisdictional and market attributes of the underlying asset class.⁴ The CFTC noted, for example, that perpetual contracts referencing equity securities or narrow-based security indexes would benefit from review by both the CFTC and the SEC.⁵

On June 18, 2026, the Chicago Mercantile Exchange Inc. (CME), a subsidiary of CME Group Inc. (CME Group) and one of four CME Group exchanges registered with the CFTC, filed suit against the agency, challenging its greenlighting of perpetual contracts on Bitcoin and other similar digital commodities to trade as futures contracts.⁶ Invoking the statutory definition of a “swap,” CME argued that perpetual contracts are swaps, and that allowing such contracts to trade as futures contracts—which, CME asserted, are subject to different regulation and favorable tax treatment—would be a circumvention of the Commodity Exchange Act (CEA).⁷ CME also pointed out that in previous high-profile enforcement actions against offshore trading platforms, the CFTC had recognized perpetual contracts as swaps.⁸ CME argued that the CFTC’s issuance of its approval order without, among other things, addressing this change in position or analyzing relevant statutory definitions rendered the issuance of the order arbitrary and capricious under the Administrative Procedure Act. The CFTC has since moved to dismiss CME’s suit on the grounds that CME lacks standing.

Notwithstanding CME’s lawsuit, the CFTC does not appear to be discouraging interest from certain of its registered exchanges in offering a broader range of perpetual futures products. CFTC-registered exchanges are now listing perpetual futures on a number of digital assets, including Bitcoin, Ether, Solana and Ripple. The CFTC has also allowed perpetual contracts on certain precious metals, and broad-based securities indexes, to be listed for trading as futures contracts. Additionally, requests for approval to list perpetual futures contracts on the EUR/USD exchange rate, and on the 10-year US Treasury yield, are currently under review by the CFTC. 

What are security futures?

A “security future” is a contract of sale for future delivery of a single security or narrow-based security index. A security future is defined as a futures contract (a contract of sale for future delivery) under the CEA⁹ and as a security under the Securities Exchange Act of 1934 (Exchange Act).¹⁰ The SEC and CFTC have joint jurisdiction over security futures contracts and other security futures products (i.e., puts, calls, straddles, options or privileges on security futures contracts).¹¹

The Exchange Act provides that a CFTC-registered derivatives exchange (more particularly, a CFTC-registered designated contract market) may register as a national securities exchange solely for purposes of trading security futures products, by filing a written notice with the SEC.¹² The SEC examines the filing to determine whether all necessary information and documentation has been provided in proper form,¹³ but the filing is not subject to affirmative SEC approval and the exchange’s notice registration as a national securities exchange becomes effective contemporaneously with filing of the notice.¹⁴

As noted above, when approving the listing of perpetual contracts on Bitcoin and other similar digital commodities as futures contracts, the CFTC signaled that perpetual contracts on other asset classes would be evaluated on a case-by-case basis in light of relevant jurisdictional and market attributes, and observed that perpetual contracts that reference equity securities would benefit from review by both the CFTC and the SEC.¹⁵ On June 24, 2026, the CFTC and the SEC issued a joint Request for Comment on potential ways to draw clearer regulatory lines with respect to innovative products that might implicate both agencies’ regulatory interests.¹⁶ The comment period for the Request for Comment ended on August 24, 2026. The questions posed for public comment included, among many others, questions about whether there was a need for greater clarity regarding the treatment of security futures in the context of innovative markets, including “whether a cash-settled ‘perpetual’ contract referencing an equity security could be treated as a security future.”¹⁷ This question has direct relevance to the jurisdictional treatment of such a product. If a perpetual contract referencing an equity security were to be categorized as a swap, it would constitute a security-based swap subject to regulation by the SEC.¹⁸ As noted above, security futures are subject to joint regulation by the CFTC and SEC.

In the Definitions RFC, the CFTC and SEC also requested comment on what effects the introduction of perpetual contracts referencing an equity security could have “on liquidity formation, price discovery, and hedging activity, particularly with regards to the derivatives and underlying cash equity markets.”¹⁹ It is common for there to be regulatory consideration of the potential impact that equity derivative products may have on underlying cash equity markets. Earlier this year, for example, the CFTC and SEC each issued exemptions to permit CME to list cash-settled single-stock security futures—“traditional” security futures with pre-determined expiration dates—whose final settlement price reflects the closing price of the underlying security, rather than the opening price as contemplated under the CFTC’s and SEC’s security futures regulations.²⁰ Prior to the issuance of these exemptions, the SEC issued public notice of CME’s exemptive request and a series of questions for public comment, including questions relating to whether closing-price settlement might raise issues or concerns for markets in the underlying securities.²¹ Additionally, the CFTC and SEC conditioned the granting of their exemptions on CME providing to the agencies within 18 months of CME’s initial listing of its security futures contracts, “a report examining the effect of cash-settled single stock futures . . . on the market for the underlying securities.”²²

The pending requests for approval

Four CFTC-registered derivatives exchanges—Kalshi, Bitnomial, Coinbase Derivatives and OG.com (a Crypto.com company)—have submitted requests for CFTC approval to list perpetual futures contracts on certain large-capitalization US exchange-listed equity securities. All of the exchanges notice-registered with the SEC last month as national securities exchanges for trading security futures products. All of the exchanges have also filed security futures listing standards with the SEC pursuant to section 19(b)(7) of the Exchange Act; these listing standards have been filed with the CFTC for approval.²³ 

All of the exchanges are proposing to list perpetual contracts on the common stock of certain large, publicly traded companies. Some of the exchanges also are proposing to list perpetual contracts on certain ETF and/or ADR shares. The proposed contracts would all trade continuously, or near continuously,²⁴ from Sunday evening to Friday evening—including overnight when the underlying securities markets will be closed. Each exchange has its own approach for calculating the spot reference price underlying its respective perpetual contracts.²⁵

What comes next? 

Kalshi, Bitnomial and Coinbase requested CFTC approval of their single stock perpetual futures contracts on September 18, 2026; OG.com requested CFTC approval of its contracts on September 24, 2026.

Contracts submitted to the CFTC for approval are subject to a 45 calendar-day review period, which the CFTC may extend for (i) an additional 45 days, if the contracts raise novel or complex issues that require additional time to analyze; or (ii) any extended review period to which the listing exchange agrees in writing.²⁶ If the CFTC does not take any action within the applicable review period, the contracts will be deemed approved.²⁷ Accordingly, if the CFTC does not take any action with respect to the Kalshi, Bitnomial and Coinbase contracts by the end of the initial 45-day review period on November 2, 2026—for example, by extending the review period for an additional 45 days—these contracts will be deemed approved by the CFTC. Absent CFTC action by November 8, 2026, OG.com’s contracts will be deemed approved.

The CFTC already has allowed certain perpetual futures contracts that were submitted to it for approval to be deemed approved, without the CFTC taking any affirmative action. Certain of the precious metals perpetual contracts and securities index perpetual contracts that are currently listed for trading as futures on CFTC-registered exchanges were deemed approved without the CFTC issuing approval orders articulating how, as contemplated in this summer’s policy statement, the agency evaluated the contracts in light of the jurisdictional and market attributes of the respective underlying asset classes.

As noted above, all of the CFTC-registered exchanges seeking to list single stock perpetual futures have filed listing standards for these products with the SEC pursuant to section 19(b)(7) of the Exchange Act. The listing standards will become effective upon CFTC approval.²⁸ Pursuant to section 19(b)(7) of the Exchange Act, within 60 days after the effectiveness of the listing standards, the SEC, after consultation with the CFTC, may “summarily abrogate” the listing standards and require refiling in accordance with the rule review and approval procedures set forth in section 19(b)(1) of the Exchange Act.²⁹ The SEC noticed the listing standards for public comment, and CME Group, Cboe Global Markets, Inc., and Nasdaq, Inc., submitted comment letters that encouraged the SEC to abrogate the listing standards and require refiling in accordance with section 19(b)(1) - arguing, among other things, that the contacts in question are security-based swaps, not security futures.³⁰ 

In addition to grappling with the categorization issue, as the CFTC and SEC consider the submissions before them they will need to give careful thought to the questions that they, themselves, have raised about how single stock perpetual contracts—which, again, offer continuous, synthetic exposure to the underlying equity securities—may affect liquidity formation, price discovery and hedging activity, particularly in underlying securities markets. The agencies also will need to consider, among other things, how such contracts may impact the capital-raising function of the underlying securities markets—for example, if any significant amount of liquidity shifts from such markets to single stock perpetual markets—and how effective risk management, cross-market surveillance and customer protection can be ensured. Exchanges, market participants—and issuers—should be giving careful consideration to these questions as well. 

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If you have any questions about this legal briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.

_{1 See, e.g., Michael S. Selig, Chairman, CFTC, The Next Phase of Project Crypto: Unleashing Innovation for the New Frontier of Finance (Jan. 29, 2026) ("[U]nder my leadership . . . the CFTC will use the tools at its disposal to onshore perpetual and other novel derivative products so that they can flourish across both centralized and decentralized markets, subject to appropriate safeguards.").}

_{2 CEA section 1a(47)(A)(iii), 7 U.S.C. 1a(47)(A)(iii).} 

_{3 In the Matter of the Request for Approval by KalshiEX LLC of the BTCPERP Futures Contract, at 8 (May 29, 2026).}

_{4 Id. at 8-9. See also Policy Statement Concerning the Listing of Perpetual Contracts, 91 FR 33160, 33161 (June 3, 2026).}

_{5 Id. at 9, fn. 25.} 

_{6 Chicago Mercantile Exchange Inc. v. Selig, No. 1:26-cv-02157 (D.D.C.).}

_{7 Id. at 3 and 19-21.} 

_{8 Id. at 23-24.} 

_{9 CEA section 1a(44), 7 U.S.C. 1a(44).}

_{10 Exchange Act section 3(a)(10), 15 U.S.C. 78(c)(a)(10).}

_{11 CEA section 1a(45), 7 U.S.C. 1a(45).}

_{12 Exchange Act section 6(g), 15 U.S.C. 78f(g).} 

_{13 17 CFR 202.3(b)(3).} 

_{14 Exchange Act section 6(g)(2)(B), 15 U.S.C. 78f(g)(2)(B).} 

_{15 See supra notes 4-5.} 

_{16 Joint Request for Comment on Further Definition of “Swap” and “Security-Based Swap” and on Alternative Compliance, 91 FR 37873 (June 24, 2026) (Definitions RFC).}

_{17 Id. at 37876.} 

_{18 See section 3(a)(68)(A) of the Exchange Act, 15 U.S.C. 78c(a)(68)(A), which defines a “security-based swap” to include any agreement, contract, or transaction that is a swap as defined under CEA section 1a, and that is based on a single security or loan, including any interest therein or on the value thereof.} 

_{19 Definitions RFC at 37876.} 

_{20 Order Providing Exemptive Relief To Facilitate Listing of Cash-Settled Futures on Individual Equity Securities, 91 FR 45640 (July 21, 2026) (CFTC Exemptive Order); Order Under Section 36 of the Securities Exchange Act of 1934 (‘Exchange Act’) and Rule 6h-1(d) Thereunder Granting Conditional Exemptive Relief to the Chicago Mercantile Exchange Inc. from the Opening Price Settlement Requirements of Rule 6h-1(b) Under the Exchange Act for Certain Cash-Settled Security Futures, 91 FR 43410 (July 10, 2026) (SEC Exemptive Order).}

_{21 Notice of an Application of the Chicago Mercantile Exchange Inc. for an Exemption Pursuant to Section 36 of the Securities Exchange Act of 1934 and Request for Comment in Connection with the Opening Price Settlement Requirements of Rule 6h-1(b) Under the Securities Exchange Act of 1934 for Certain Cash-Settled Securities Futures, 91 FR 6681 (Feb. 12, 2026).}

_{22 CFTC Exemptive Order at 45643; SEC Exemptive Order at 43414.} 

_{23 Self-Regulatory Organizations; KalshiEX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Listing Standards for Security Futures Products, 91 FR 60467 (September 23, 2026); Self-Regulatory Organizations; Coinbase Derivatives, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Adoption of Coinbase Derivatives, LLC’s Rules Governing Cash Settled Futures on Individual Equity Securities and Exchange-Traded Fund Shares, Including Perpetual Single-Stock Futures, 91 FR 60448 (September 23, 2026); Self-Regulatory Organizations; Bitnomial Exchange, LLC; Notice of a Filing of a Proposed Rule Change Relating to Security Futures Product Listing Standards, Customer Margin and Related Rules, 91 FR 60438 (September 23, 2026); Self-Regulatory Organizations; North American Derivatives Exchange, Inc.; and Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rules Governing Contract Specifications for Perpetual Cash-Settled Single Stock Security Futures, 91 FR 62786, (October 2, 2026).} 

_{24 Kalshi plans for a daily one-hour maintenance window, effectively providing for 23/5, rather than 24/5, trading.} 

_{25 Kalshi proposes to define the “Underlying Price Index” for its contracts as the last sale price of the underlying security as reported by the securities information processor (SIP) pursuant to the effective national market system plan for the underlying security (i.e., the consolidated tape). OG.com proposes to define the “Underlying Index Price” for its contracts as the median of the national best bid, national best offer and last sale price published by the SIP for the underlying security. Coinbase Derivatives proposes that the underlying spot reference price for its contracts will be derived from a security-specific index calculated by Coinbase Derivatives. Bitnomial proposes to use equity indexes administered and calculated by CF Benchmarks to calculate the underlying spot reference price for its contracts.}

_{26 17 CFR 40.3(d).}

_{27 17 CFR 40.3(c).} 

_{28 Exchange Act section 19(b)(7)(B), 15 U.S.C. 78s(b)(7)(B)}

_{29 Exchange Act section 19(b)(7)(C), 15 U.S.C. 78s(b)(7)(C).}

_{30 See, e.g., comment file for Kalshi’s proposed listing standards, available at: SEC.gov | Comments on KALSHIEX Rulemaking.}