SEC & CFTC Set Sept 29 Roundtable on 24/7 Trading

Chairman Paul S. Atkins and Acting Chairman Caroline D. Pham continue to advance cooperation between key regulators, namely the SEC & CFTC set Sept 29 roundtable on 24/7 trading: onshore perpetuals, portfolio margining, event contracts, and DeFi innovation exemptions on the table.

The key task they formed is to move away from a regulatory "no man's land," where the absence of a coordinated approach cools economic activity, especially where transactions are already permitted under federal law. And to underscore the combination of investor protection and market integrity with supervisory flexibility and responsiveness.

Join BloFin and qualify for up to $1,000 today

Start Trading

Coordination of Frameworks: From Product Definitions to Reducing Structural Inefficiency

First things first, what does the upcoming roundtable promise?

• Development of compatible definitions of products and venues

• Alignment of reporting and data requirements

• Harmonization of capital and margin standards

• Establishment of coordinated innovation exemptions at each agency

As a result, this is a way to create a reproducible playbook for innovators and investors, to strengthen competition and market integrity while fully complying with statutes.

Among other tasks, they pay special attention to portfolio margining. The current fragmentation forces participants to keep collateral separately at SEC- and CFTC-registered organizations, even when positions hedge each other in a real economic sense. Naturally, the regulators expect that such harmonization of margin requirements may:

• Reduce the cost of carrying hedged positions

• Free up the balance sheet, decrease transaction costs

• Expand the participation of institutional and retail investors in cross-market strategies

• Stimulate liquidity and competition in market structure while maintaining reliable risk controls

Additionally, the SEC and CFTC indicate readiness for "innovation exemptions" and temporary safe harbors for peer-to-peer trading of spot, leveraged, margined, and other operations with crypto assets, including derivatives such as perpetual contracts, on DeFi protocols, to give the market room for commercially viable models during further rulemaking.

Market Infrastructure Parameters 24/7 Trading

Another crucial aspect here is the consideration of expanding trading hours to 24/7 where appropriate, taking into account operational resilience and liquidity, with investor and customer protection unchanged.

Among their arguments is that certain asset classes, including foreign exchange, gold, and crypto assets, already trade continuously, but there is clearly no universal model for all products. For prediction markets, they indicated readiness to jointly develop listing conditions for event contracts, including those based on securities, and to assess mechanisms for their availability to participants in the United States regardless of the distribution of jurisdictions.

However, the top priority here is perpetual contracts, which are widespread on offshore crypto markets. The agencies are considering parallel steps toward the onshore launch of perpetuals that meet investor and customer protection standards, which may open trading in these products on SEC- and CFTC-regulated platforms, return economic activity to U.S. jurisdiction that is moving to foreign venues, and provide residents with access to products with transparent leverage limits and robust risk management.

US Regulators Continue to Advance

Beyond doubt, the statement is of fundamental importance, with unprecedented alignment between the agencies and coverage of products and markets. Such a position itself, with an awareness of the need to address key issues such as capital inefficiencies, trading hours not adapted to the always-on model, and a lack of predictable onshore infrastructure for new product formats, is already a major step. We will watch how the SEC and CFTC continue to develop and implement the modernization agenda of the world's leading economy to keep it that way.

Stay tuned for the latest updates in the economic revolution and the crypto and blockchain industry.