US CFTC Approves First Perpetual Futures Tied to Individual Stocks on US Exchanges

The US Commodity Futures Trading Commission has, for the first time, allowed perpetual futures tied to individual stocks to trade on US exchanges.

On November 3, the CFTC said on its website that Chairman Michael Selig had issued a statement permitting perpetual futures based on single-stock underlyings to trade on US exchanges.

The new single-stock perpetual futures were introduced under the Commodity Futures Modernization Act and a memorandum of understanding between the CFTC and the Securities and Exchange Commission.

Selig called the move an important step that would allow US market participants to use perpetual futures for risk management and price discovery. It also gives investors access to innovative products within the US regulatory framework instead of on unregulated overseas exchanges, he said.

Innovative products such as single-stock perpetual futures had remained in a regulatory gray area because of uncertainty, Selig said. He added that the CFTC and SEC would move beyond interagency jurisdiction disputes to establish clear regulatory standards and a path to market entry.