At least four exchanges are expected to start trading perpetual futures on securities this quarter, the SEC’s top market-structure official said, signalling that a contract born in crypto markets is close to entering regulated US equity derivatives trading.

Speaking at the Security Traders Association’s annual market structure conference on 14 October, Selway said: “I expect at least four to begin to trade perpetual futures on securities sometime this quarter.”

Five CFTC-Regulated Exchanges File With SEC

Five CFTC-regulated exchanges - Coinbase, Kalshi, Bitnomial, NADEX and ICE Futures - submitted Form 1-N registration notices in September, ahead of the anticipated launches.

All five were already designated contract markets, or DCMs, registered with the Commodity Futures Trading Commission.

The process differs from a conventional exchange application requiring SEC approval. Under the applicable framework, an eligible exchange’s registration becomes effective when it submits the required notice.

The SEC’s rules expressly distinguish Form 1-N notices from applications the Commission would approve before trading begins. That registration has a limited purpose: trading security futures products.

It does not give the venues general authorisation to operate a cash-equities exchange, and it is separate from the timing and terms of individual contract launches.

Perpetual Contracts Would Extend Securities Futures Trading

The expected launches would follow CME’s introduction of cash-settled single-stock futures on 27 July, which Selway cited in his remarks.

CME’s launch announcement covered more than 50 US stocks, expanding listed derivatives tied to individual companies. However, unlike perpetual futures, those conventional contracts have expiry dates.

Selway described the SEC’s responsibility as ensuring compliance with regulatory standards and supporting competition to protect investors. Assessing whether new products would succeed commercially was outside that role.

“Our role is not to judge the likely commercial success or failure of these projects. Rather, we work to ensure compliance with our standards and to foster healthy competition, to best protect and benefit investors,” he said.

The five September filings establish the registration step, but the speech does not identify which four venues Selway expects to launch during Q4. It also leaves individual launch dates, eligible securities, leverage limits, funding arrangements and settlement terms unspecified.

This article was written by Tanya Chepkova at www.financemagnates.com.

Source: Finance Magnates