US CFTC Issues No-Action Letter Proposing to Allow Exchanges to Convert Existing Crypto Perpetual Futures into True Perpetual Contract Structures

Odaily Planet Daily News: The U.S. Commodity Futures Trading Commission (CFTC) Market Oversight Division announced today that it has issued a no-action letter to Designated Contract Markets (DCMs), allowing them to convert existing digital commodity futures contracts with a “perpetual-like structure” into true crypto perpetual futures contracts. This policy extends upon previous regulatory clarifications and explicitly applies to digital commodities such as Bitcoin, which have deep, active, and continuous spot market trading.

According to the document, DCMs may, upon meeting specific conditions, remove the expiration date of existing contracts and convert them into true perpetual contracts. However, this is subject to fulfilling several requirements, including: soliciting feedback from position holders, providing advance notice and an opportunity to close positions, making adequate risk disclosures, and ensuring no other key contract terms are modified. Additionally, exchanges must submit amendment filings in accordance with CFTC Rules 40.5 or 40.6 and complete compliance certifications.