CFTC Grants Conditional Relief for Converting Security Index Futures to Perpetuals

The CFTC’s Division of Market Oversight issued no-action relief on October 5 for designated contract markets that want to convert existing perpetual-style broad-based security index futures into true perpetual futures. The relief allows an exchange to remove an expiration date from an existing contract, subject to the conditions in the staff letter.

The conditions are aimed at customers with open positions. Before making the change, a market must solicit feedback from affected participants, give advance notice and an opportunity to exit, provide appropriate risk disclosures, and avoid changing other material contract terms. The exchange must also file the amendments under CFTC Regulations 40.5 or 40.6 and certify that it has met every condition.

The CFTC said the no-action positions expire on October 20, 2026. The announcement does not automatically convert any contract; it provides conditional staff relief to markets that choose to pursue the conversion.

Why it matters

Perpetual contracts remove the scheduled expiry that ordinarily requires a futures position to be closed or rolled. For traders in a covered broad-based security index product, that can affect how a contract is held and managed. The CFTC’s conditions are particularly relevant to existing holders because they require notice, risk information, and a chance to leave before an exchange changes the contract’s expiry feature.

The relief is narrow and temporary. It does not alter the normal risks of leveraged futures trading or guarantee that any exchange will offer a converted product.

What to watch next

Watch for exchange notices identifying a specific contract conversion and explaining the customer feedback, exit window, and disclosures. Also watch whether the CFTC extends, replaces, or allows the staff position to lapse after October 20.