Perpetual futures on individual stocks can now trade on CFTC-registered exchanges, and I think the first test of that decision is how much each exchange tells traders about the contract before volume arrives.
On 3 November CFTC Chairman Michael S. Selig released a statement on equity perpetual futures announcing that the contracts “can begin trading for the first time” on designated contract markets that are also registered with the SEC as notice-registered national securities exchanges for security futures products. The contracts were deemed approved by the Commission under Regulation 40.3 as security futures products under the Commodity Futures Modernization Act of 2000. That puts them under both the Commodity Exchange Act and the federal securities laws.
What the statement settles
It settles the legal route. Selig says the CFTC and the SEC have ended a period in which these products sat in what SEC Chairman Paul Atkins called a regulatory “no man’s land”, and he frames the point of the move as keeping traders onshore. In his words, bringing the products into regulated markets means American investors and traders can reach them “rather than being forced to turn to offshore, and often unregulated, venues.” The statement follows the staff letter that let exchanges convert index futures to true perpetuals, which we covered in October.
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It does not settle what a trader or a broker will see on the day. The statement names no exchange, no underlying stock and no contract specification. The contract terms sit in exchange filings that the statement does not describe, so a reader of the statement alone learns the policy and none of the product.
Selig credits two foundations: the Commodity Futures Modernization Act of 2000, which set up joint CFTC and SEC oversight of security futures products, and the memorandum of understanding the two agencies signed in March 2026. Both are about who regulates. Neither is about what a trader is told, and that gap is the subject of this piece.
My argument
Each exchange listing an equity perpetual should publish a plain-language term sheet at launch, in the same place as its rulebook filing, covering every term a trader can lose money on. The regulatory route is clear. Disclosure is where the CFTC’s stated goal of investor protection gets tested, because a product that has no expiry date and trades on an equity underlying asks retail and professional users to learn terms they have not had to learn before.
The same reasoning applies one step downstream. A broker that connects clients to these contracts should show the term sheet at the order screen. Our opinion on prediction markets reaching brokers through the front ends they already run made the same case: when a new contract type arrives through an existing interface, the interface carries the duty to explain it.
The strongest objection
The objection is that exchanges already file their contract rules with the CFTC, that the rules are public, and that a second document adds cost with no new information. There is force in that. Regulated venues do publish rulebooks, and the Commission’s review process exists to catch problems in them.
My answer is that a rulebook filing is written for a lawyer and a term sheet is written for the person placing the order. The statement itself defends the move by pointing to protections for American investors, and that standard is met by what the investor can read, which is a different thing from what the exchange has filed. A one-page summary costs an exchange little next to the cost of a retail trader finding a term only after a position moves against them.
What I would ask for
For each equity perpetual, I would want the exchange to state in one place how the contract relates to the underlying stock, what it charges or credits a holder for keeping a position open, what happens at a corporate action, and which of its terms the exchange can change and on what notice. I would want the broker to link that page from every order ticket. I would want the CFTC’s own press materials to link each exchange’s page the way they now link the statement.
None of that requires new rules. It requires exchanges and brokers to decide that clarity of terms is part of the launch. The firms that publish first will set the standard the rest are measured against, and the CFTC’s offshore comparison gives them a ready reason to do it.
Source: CFTC
