CFTC Staff Requests Comment on "Perpetual Derivatives Contracts"

The CFTC Divisions of Market Oversight, Clearing and Risk, and Market Participants ("Staff") requested comment on the regulatory treatment and market implications of "perpetual derivatives contracts."

Staff explained that perpetual futures were derivatives that do not have an expiration date and rely on continuous price alignment with a cash or spot market. Staff stated that, unlike traditional futures where convergence occurs at expiration, perpetuals are "benchmarked and settled on an ongoing basis - often multiple times a day."

Staff questioned whether such instruments raise novel risk, surveillance, or customer protection issues that are not addressed by current regulations. Staff noted that the lack of expiration could complicate traditional arbitrage and convergence mechanisms, and they asked whether perpetuals could "adversely impact the liquidity or usefulness for commercial risk management purposes of traditional futures products."

Staff also asked whether a working definition of "perpetual derivative" should be based on features like continuous pricing, absence of expiry, or "reduced need for 'rolling' a contract." Staff also questioned whether perpetual futures are distinct from other perpetual-style products and whether a taxonomy is needed.

Staff asked for comment as to:

• whether existing disclosures under CFTC rules are "adequate to address risks associated with Perpetual Derivatives," and if not, what additional disclosures should be required.

• whether these instruments are more susceptible to manipulation, especially in physical commodity markets.

• whether market integrity, price discovery and customer protection objectives are advanced or undermined.

• whether perpetual derivatives be classified as futures or swaps. 

Comments are due by May 21, 2025.