SEC and CFTC explore ways to bring perpetual contracts onshore

Key Takeaways

The SEC and CFTC plan to harmonize regulations to bring perpetual contracts and 24/7 trading back to US markets.
The agencies are considering frameworks for DeFi, portfolio margining, and safe harbors for peer-to-peer crypto asset trading.

The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are considering steps to allow perpetual contracts to trade on US platforms as part of an ongoing push to harmonize oversight and onshore crypto-style products.

The agencies announced on Friday that they will hold a joint roundtable on regulatory harmonization on September 29, focusing on bringing novel products back to the US markets. The initiative aims to address the regulatory uncertainty that has pushed financial innovation overseas.

“It is a new day at the SEC and the CFTC, and today we begin a long-awaited journey to provide markets the clarity they deserve,” said SEC Chairman Paul Atkins and CFTC Acting Chairman Caroline Pham in a joint statement. “By working in lockstep, our two agencies can harness our nation’s unique regulatory structure into a source of strength for market participants, investors and all Americans.

Key areas of focus include expanding trading hours for certain markets, providing clarity on prediction markets and event contracts, and developing frameworks to bring perpetual contracts onshore.

The agencies will also explore portfolio margining opportunities to reduce capital inefficiencies and consider innovation exemptions for decentralized finance (DeFi) protocols.

The regulators emphasized their openness to creating safe harbors that would allow market participants to engage in peer-to-peer trading of spot crypto assets and derivatives over DeFi protocols while maintaining investor protections.

“The right to self-custody one’s assets is a core American value,” the statement noted. “While market participants have paths under current law to trade spot crypto on federally regulated venues, the path remains open for peer-to-peer spot crypto trading as well.”

On Tuesday, the SEC and CFTC released guidance that enables US-registered exchanges to offer spot trading of specific crypto tokens. The development is part of broader regulatory measures positioning the US as a potential hub for crypto market activities.