U.S. CFTC Issues 24/7 Trading Regulatory Guidance: Crypto Derivatives Better Suited for Around-the-Clock Trading

Odaily Planet Daily News: The U.S. Commodity Futures Trading Commission (CFTC) divisions, including Market Oversight, Clearing and Risk, jointly issued staff guidance on the increasingly prevalent 24/7 trading, clearing, and settlement model in the markets, outlining regulatory expectations and compliance requirements while encouraging market innovation within a compliant framework.

The guidance emphasizes that regulated trading platforms, swap execution facilities, derivatives clearing organizations, and futures commission merchants must comply with the Commodity Exchange Act (CEA) and related regulatory rules when expanding into around-the-clock trading. They are also required to proactively assess their risk management and operational arrangements.

The CFTC noted that the suitability of 24/7 trading varies across different asset classes. Derivatives related to crypto assets, due to their digital infrastructure and global continuous trading characteristics, are better suited for around-the-clock trading and clearing. In contrast, traditional commodity derivatives like agricultural products may not be fully suitable for a 24/7 operational model due to their regional nature and specific trading structures.

CFTC staff indicated that relevant institutions should ensure alignment with the regulatory framework and risk control requirements while driving the continuous evolution of the market, all to support "responsible market innovation."