CFTC market-oversight staff has provided an expedited route for designated contract markets to remove expiry dates from existing perpetual-style broad-based security index futures. The contracts described in Staff Letter 26-29 already use periodic funding and have long-dated expiries, including up to 25 years. Conversion removes that final date while retaining the other material terms.[5]
The temporary staff no-action position allows the amendments to take effect upon satisfaction of its conditions, without the ordinary 10-business-day wait addressed by the letter. It expires on 20 October 2026 and applies to the specified conversion rather than a general product redesign.[5][1]
Conversion is limited to the expiry term
Conditions attached to the staff relief
| Condition | Required action | Reason |
|---|---|---|
| Participant feedback | Solicit feedback from market participants with open positions. | Existing holders entered a contract with a defined expiry structure.Source 1Source 2 |
| Advance notice and exit | Give affected open-position participants at least five calendar days’ notice and an opportunity to close under the existing terms. | A holder should not be forced into an indefinite-duration contract without a practical exit.Source 5 |
| Risk disclosure | Provide disclosure appropriate to the true perpetual structure. | Changing the expiry term can affect existing holders and contract pricing even when the funding mechanism is retained.Source 5 |
| No other material changes | Remove the expiration date without changing other material contract terms. | The letter is a conversion path, not a broad product-amendment exemption.Source 1Source 2 |
| Regulatory filing | File under Regulations 40.5 or 40.6; notify DMO, identify the contracts and certify compliance with the conditions. | Exchange self-certification or approval procedures remain part of the process.Source 5 |
Broad-based index futures have a different jurisdictional route
The CFTC distinguishes futures on broad-based security indices from security futures products. Broad-based index futures remain under CFTC jurisdiction, while single-stock and narrow-based index security futures are jointly regulated by the CFTC and SEC. That is why this letter’s product scope must not be extended automatically to a perpetual on one company’s shares.[3]
Removing expiry extends the funding and exit horizon
Periodic funding already supports price alignment in the existing contracts described by the letter. Removing the final expiry extends the period over which the position can remain open and funding can accrue. Staff also warns that changing contract terms can itself affect prices and existing holders, even when underlying market fundamentals have not changed.[5]
The related perpetual security-futures filing shows why those mechanics are operationally significant: long and short holders exchange funding obligations as the derivative and underlying prices diverge, while central clearing and margin continue. The filing concerns a different product class, so it is useful as mechanism evidence rather than authority for the broad-index relief itself.[4][3]
What a broker needs to tell a client
Dated and true-perpetual questions
| Feature | Existing perpetual-style contract | True perpetual after conversion |
|---|---|---|
| Expiration | A long-dated fixed expiry; the letter describes dates up to 25 years away. | No predetermined expiry date.Source 5 |
| Exit | Close by offset before expiry, or follow the original settlement terms. | Close by offset, subject to market liquidity and exchange procedures.Source 1Source 4 |
| Ongoing cost | The contracts described in the letter already use periodic funding. | Funding continues without a predetermined final expiry; no other material terms change under the relief.Source 5 |
| Holder notice and exit | Original terms govern. | At least five calendar days’ notice and a chance to close under the old terms before conversion.Source 5 |
The staff position governs this conversion window
The letter states DMO’s enforcement position under the stated facts and conditions; it does not amend the Commodity Exchange Act or bind the Commission or other divisions. Exchanges still need to meet other applicable requirements and cannot assume this expedited route continues after 20 October.[5]
For an exchange, the benefit is faster amendment of an eligible existing listing. For a broker, implementation depends on getting notice and risk information to the affected customers in time for them to decide whether to close under the old terms. The expiry of this temporary procedure is distinct from the duration of a contract validly converted under it.[5][1]
Sources & further reading
- CFTC issues no-action letter for conversion of broad-based index perpetual-style futures Commodity Futures Trading Commission · 5 Oct 2026 · Accessed 16 Oct 2026
- CFTC Staff Letter 26-29 — broad-based security index perpetual futures Commodity Futures Trading Commission · 3 Oct 2026 · Accessed 16 Oct 2026
- Security futures products and broad-based security index futures Commodity Futures Trading Commission · Accessed 16 Oct 2026
- KalshiEX filing on perpetual security futures products Federal Register via GovInfo · 23 Sep 2026 · Accessed 16 Oct 2026
- CFTC Staff Letter 26-29 — full no-action letter Commodity Futures Trading Commission · 3 Oct 2026 · Accessed 20 Oct 2026