CFTC Lets Exchanges Convert Index Futures Into True Perpetual Contracts

TL;DR CFTC staff has issued temporary no-action relief allowing designated contract markets to convert certain broad-based security index futures into true perpetual contracts. Exchanges can remove expiration dates if they meet customer-protection, notice and filing conditions. The relief is narrow, applies to existing qualifying contracts and expires on October 20. The U.S. derivatives market is taking another step toward a contract structure crypto traders know well: the true perpetual future. The Commodity Futures Trading Commission’s Division of Market Oversight said on October 5 that designated contract markets can convert certain existing perpetual-style broad-based security index futures into contracts with no expiration date. The relief is temporary and conditional, but it is still a notable shift in how U.S.-regulated venues can structure perpetual exposure. Exchanges Cannot Simply Delete The Expiry Date The no-action position comes with several safeguards. A designated contract market must solicit feedback from participants holding open positions, provide advance notice, give customers an opportunity to exit and deliver appropriate risk disclosures. The exchange also cann...