CFTC Staff Clears Fast Track for Stock-Index Perpetual Conversions

Commodity Futures Trading Commission (CFTC) staff announced on Oct. 5 a fast-track path for U.S. futures exchanges to remove expiration dates from existing perpetual-style broad-based stock-index futures, extending a conversion approach previously used for digital commodities.

The Division of Market Oversight's Letter 26-29 responds to a request from Coinbase Derivatives, but covers any designated contract market, or DCM, with qualifying existing contracts. It provides relief from the usual 10-business-day waiting period for amendments, allowing changes to take effect once the letter's conditions are met. Staff also committed not to seek or impose a stay of those amendments under its delegated authority.

The change removes a remaining distinction between perpetual-style contracts and true perpetuals. The existing contracts had long-dated expirations, including up to 25 years, while already using periodic funding to help keep prices aligned with the underlying index. That funding mechanism stays: the relief permits no other material contract changes.

Coinbase Derivatives' product roster lists perpetual-style equity-index futures on AI10, China10, Defense10, Tech100 and US500, illustrating the existing market to which the conversion process can apply.

An Exit Window for Existing Holders

Before making the change, an exchange must solicit feedback from participants with open positions about possible adverse effects, provide at least five calendar days' notice, allow holders to close positions under the existing terms, and disclose the risks of changing the contract. These protections also cover affected customers trading through intermediaries.

The exchange must file the amendments under Regulation 40.6(a) or 40.5, notify the division that it intends to rely on the relief, certify compliance and identify the contracts concerned. Eligibility is limited to existing perpetual-style contracts referencing broad-based security indices.

Other applicable margin, position-limit and reporting requirements remain in force. Staff warned that altering terms on contracts with open positions can move prices and create gains or losses even without a change in market fundamentals.

Beyond Crypto Perpetuals

The structure follows June's digital-commodity conversion relief, requested by Coinbase and Bitnomial. That letter imposed the same five-day notice and expiration-only amendment conditions, but covered digital commodities and expired on June 30.

The immediate precedent for the stock-index move is Kalshi's US500 perpetual futures submission. According to the new staff letter, Kalshi sought review under Regulation 40.3 on Aug. 18, and the contract was deemed approved on Oct. 2.

The broader classification of perpetuals remains contested. CME announced a legal challenge in June; its complaint argues that periodic payments and the absence of a fixed delivery date make crypto perpetuals swaps, not futures. The CFTC's May 29 order reached the opposite classification, approving Kalshi's bitcoin perpetual as a futures contract.

The new conversion letter binds only the issuing division, not the full commission. Its no-action positions expire on Oct. 20, 2026.