CFTC clears equity perps on registered exchanges under Regulation 40.3

CFTC Chair Michael Selig on November 3 announced that perpetual futures on individual equity securities — the agency is calling them "Equity Perps" — can begin trading on CFTC-registered exchanges, the first time the instrument crosses from digital commodities into the US cash-equities complex. The products are deemed approved under Commission Regulation 40.3 as security futures, not through the lighter one-day self-certification route, and they will be jointly overseen by the CFTC and the SEC under the Commodity Futures Modernization Act of 2000 (CFMA).

What was approved

Selig's statement frames Equity Perps as the next step after the agency's May 29, 2026 approval of a bitcoin perpetual future on KalshiEX LLC. The mechanics:

• Rule basis: Regulation 40.3 — an exchange submits the contract for Commission review and the Commission affirmatively deems it approved, rather than it clearing in one business day under self-certification.
• Legal category: security futures products under the CFMA, meaning both the Commodity Exchange Act and the federal securities laws apply.
• Joint oversight: a March 2026 CFTC–SEC memorandum of understanding governs coordination between the two agencies. SEC Chair Paul Atkins has previously described security futures as stranded in a regulatory "no man's land."
• Venues: "CFTC-registered exchanges" in the statement means designated contract markets that are also notice-registered with the SEC as national securities exchanges for security futures. Selig did not name specific exchanges planning to list Equity Perps at launch.

What Equity Perps actually are

Per coverage by CoinDesk and The Block, the contracts carry the standard perp design borrowed from crypto venues: no fixed expiration, with a funding mechanism that drives the contract price toward the underlying share price. Contract design must account for dividends, stock splits and other corporate actions on the underlying.

Selig's statement does not publish contract specifications, tickers, position limits, margin rules or trading hours. Perpetual pricing does not automatically translate into 24/7 trading — venue listing rules will set that.

For contrast: Coinbase Derivatives' existing US "perpetual-style" product has a five-year expiry and hourly funding, so it is not a true perpetual. Offshore, Hyperliquid runs the dominant on-chain perp market; ICE earlier this year invested in tradeXYZ, which builds perp markets on Hyperliquid.

Why the Reg 40.3 route matters

Self-certification would have let an exchange list Equity Perps after a one-business-day notice. The 40.3 route forces an affirmative Commission determination, which the statement uses to anchor two points:

1. The approval is product-by-product, not a blanket authorization. Each new Equity Perp — on a given ticker, with its own specifications — must go through 40.3 again.
2. The joint framework with the SEC is the backstop. The March 2026 MOU is the plumbing that makes dual-jurisdiction products livable for an exchange, rather than a fifteen-year standoff between the two agencies.

SIFMA, the brokerage and investment bank association, has publicly asked for more review of equity perps — in particular cross-market manipulation risk between the perp and the underlying cash security. Nothing in today's statement addresses that formally.

What to watch

1. First exchange filings. Which DCMs (CME, Cboe, ICE Futures US, KalshiEX) file first Equity Perp contracts under 40.3, and on which tickers — expect mega-caps first.
2. SEC side of the plumbing. Notice registration as a national securities exchange for security futures is non-trivial; the March 2026 MOU will be tested the first time an exchange or clearing house has to coordinate a corporate action across both regulators.
3. Margin and funding specifications. How issuers set the funding rate band and initial margin against a cash-equity reference will drive whether these products attract crypto-native flow or stay broker-dealer-captured.
4. SIFMA comment letter on cross-market manipulation. If the broker side pushes, expect position-limit rulemaking before Equity Perp volume scales.

Context

Perpetuals, mostly offshore, recorded over $630 billion in trading volume over the past month per DeFiLlama data cited by CoinDesk — a market the CFTC has spent 2026 pulling onshore step by step. The sequence so far: the May 29 bitcoin perp on KalshiEX; the October 5 CFTC–SEC coordination agreement; today's Equity Perp approval under 40.3. The direction of travel is consistent, and it is onshore, not offshore. What it isn't, yet, is a single consolidated rulebook: each product still clears its own Commission determination.