CFTC Issued Relief for Perpetual Futures Contracts

The regulatory body enabled contract markets to convert broad-based security index futures into true perpetual products.

Updated on Oct. 5, 2026 in Investing

Isometric editorial illustration of a clean steel staircase, representing the modernization of financial contract structures. — The Commodity Futures Trading Commission issued a no-action letter enabling contract markets to convert security index futures into perpetual futures contracts. AI Illustration. Upload story photo >

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Should financial regulators allow markets to modify the core terms of existing investment contracts?

The Commodity Futures Trading Commission issued a no-action letter allowing designated contract markets to convert perpetual-style broad-based security index futures into true perpetual futures. This regulatory relief enables markets to remove expiration dates from existing contracts to streamline trading processes.

Why it matters

The change allows designated contract markets to modernize their product offerings by shifting toward perpetual structures. It ensures that the transition is managed safely for participants by requiring specific notice and disclosure procedures.

Markets must utilize CFTC Regulation 40.5 or 40.6 to file the necessary amendments for contract conversion. The no-action relief remains effective until the expiration date of October 20, 2026.

The players

Commodity Futures Trading Commission

The Commodity Futures Trading Commission is an independent agency of the United States government that regulates the derivatives markets including futures, swaps, and options.

The details

To execute the conversion, markets must solicit feedback from participants holding open positions and provide them with an opportunity to exit before the change takes effect. Furthermore, firms are required to offer new risk disclosures to customers, and no other material contract terms may be altered during the process.

The CFTC issued the no-action letter on October 5, 2026.
The no-action relief granted to the markets expires on October 20, 2026.

Market Dynamics

This move represents a shift toward more flexible financial instrument structures within the U.S. derivatives space. It updates procedural standards for broad-based security index futures to better align with the evolving preferences of institutional and retail traders.

Investors currently holding broad-based security index futures should monitor communications from their exchanges regarding potential contract conversions and risk disclosure updates. Participants may receive opportunities to exit positions as markets begin the transition to perpetual structures.

The takeaway

This regulatory update provides a pathway for contract markets to refine the lifecycle of their financial products. Market participants should stay alert for formal notices from their respective exchanges as these changes are implemented.