[Federal Register Volume 91, Number 121 (Thursday, June 25, 2026)]
[Proposed Rules]
[Pages 38334-38339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-12784]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 1
RIN 3038-AF75
Request for Comment on the Extension of Standard Futures
Contracts to 24/7 Trading and on Perpetual Contracts Referencing
Physically Delivered or Storable Energy Commodities
AGENCY: Commodity Futures Trading Commission.
ACTION: Request for comment.
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SUMMARY: The Commodity Futures Trading Commission (Commission or CFTC)
is requesting public comment on two distinct but related matters
arising from recent developments in energy derivatives markets. The
first is the extension of standard futures contracts to 24/7 trading,
without any change to the contracts' fixed expiration, delivery, or
settlement terms. The second is the listing of perpetual contracts that
reference physically delivered or storable energy commodities, such as
crude oil. The Commission seeks comment on the implications of each
matter for the reliability and manipulation-resistance of reference
prices, market surveillance and operational readiness, the federal
speculative position-limits regime, margin, clearing, and settlement,
customer protection, and effects on the underlying physical markets and
the commercial participants that rely on them.
DATES: Comments must be received on or before July 27, 2026.
ADDRESSES: You may submit comments, specifically referencing ``Request
for Comment on the Extension of Standard Futures Contracts to 24/7
Trading and on Perpetual Contracts Referencing Physically Delivered or
Storable Energy Commodities'' and RIN 3038-AF75, by any of the
following methods:
Regulations.gov: Go to https://www.regulations.gov and
press the ``Search'' button, then proceed as follows:
1. Under Refine Documents Results--check the box to ``Only show
documents open for comment'';
2. Under Agency--select ``See More'' and check the box for
``Commodity Futures Trading Commission,'' then press the Apply button;
3. Identify this proposal in the list of CFTC documents open for
comment, press the ``Comment'' button to open the submission form, and
follow the instructions on the form.
Alternatively, if you are viewing this proposal on
www.federalregister.gov, click the ``Submit A Public Comment'' button
at the top of the page to open the comment form. Follow the
instructions on the form to submit your comment to Regulations.gov.
Mail: Send to--Christopher Kirkpatrick, Secretary of the
Commission, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW, Washington, DC 20581.
Hand Delivery/Courier: Address to--CFTC Comment
Submission, Attn: Christopher Kirkpatrick, Secretary of the Commission,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st
Street NW, Washington, DC 20581.
Please submit your comments using only one of these methods. To
avoid possible delays with mail or in-person deliveries, submissions
through Regulations.gov are encouraged.
All comments must be submitted in English or, if not, accompanied
by an English translation. Do not include in your comment text or
attachments any personal identifying information or business
information that you do not want published online. Comments (regardless
of submission method) will be published without review for, and without
removal of, any personal identifying information or information your
business may consider confidential.
If you wish to submit confidential information for the Commission's
consideration, please contact the CFTC personnel listed in this
document under FOR FURTHER INFORMATION CONTACT before making any
submission. Please also carefully review the Commission's procedures in
17 CFR 145.9 for requesting confidential treatment under the Freedom of
Information Act (FOIA) of information submitted to the Commission.
The CFTC reserves the right, but shall have no obligation, to
review, pre-screen, filter, or redact all or any part of your comment
submission. The CFTC also reserves the right, without further
notification, to refuse to publish or to remove from public view all or
any part of your submission to the extent it contains content
inappropriate for publication in a comment file, such as--without
limitation--obscene language, threats of violence, solicitations for
commercial sales or illegal activity, or obvious spam. If a submission
that is refused for or withdrawn from publication because of
inappropriate content also contains comments on the merits of this
proposal, such submission will be retained in the record for the matter
and will be considered as required under the Administrative Procedure
Act and other applicable laws and may be accessible under the FOIA.
FOR FURTHER INFORMATION CONTACT: Stephen Andrews, Deputy General
Counsel for Regulation, 202-308-7563, [email protected], Office of
the General Counsel, Commodity Futures Trading Commission, Three
Lafayette Centre, 1151 21st Street NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Introduction and Background
The CFTC requests comment on two distinct but related matters
arising from
[[Page 38335]]
recent developments in the trading of energy derivatives. The first
concerns the extension of standard futures contracts to 24/7 trading.
The second concerns perpetual contracts, which have no fixed expiration
and rely on a periodic funding rate mechanism that is designed to
maintain relative price parity with the underlying asset's spot price,
when such contracts reference physically delivered or storable energy
commodities such as crude oil.
This request builds on the Commission's prior solicitations
concerning the trading and clearing of perpetual-style derivatives and
the trading and clearing of derivatives on a 24/7 basis. The Commission
is aware that registered entities have announced the extension of
trading in certain energy futures to a continuous basis.
A. Extension of Trading Hours
A standard futures contract--one with a fixed expiration and, in
many cases, physical delivery--may be listed for trading on a 24/7
basis without any change to its expiration, delivery, or settlement
terms. The Commission previously sought comment on 24/7 trading and
seeks further comment on the issue.\1\ 24/7 trading of standard futures
contracts raises questions concerning the liquidity, reliability, and
susceptibility to manipulation of prices formed during overnight,
weekend, and holiday periods; the impact that prices formed during
extended weekend or holiday trading hours may have on benchmark prices
that affect commercial agreements, ETFs, and other derivatives; the
surveillance and operational arrangements necessary to monitor trading
at all hours; and the settlement and payment arrangements available
when traditional payment systems do not operate. The Commission seeks
comment on these questions and on whether, and under what conditions,
24/7 trading of standard futures contracts is consistent with the Act
and the Core Principles applicable to designated contract markets.
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\1\ Press Release, CFTC Staff Seek Public Comment on 24/7
Trading (Apr. 21, 2025), https://www.cftc.gov/PressRoom/PressReleases/9068-25.
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B. Perpetual Contracts and the Commission's Recent Actions
Perpetual contracts are derivative contracts that have no fixed
expiration date and rely on a periodic funding rate mechanism that is
designed to maintain relative price parity with the underlying asset's
spot price. On May 29, 2026, the Commission issued an order permitting
a DCM to list, as a futures contract, a perpetual contract referencing
the spot price of bitcoin (the ``Order'') and contemporaneously issued
the Policy Statement Concerning the Listing of Perpetual Contracts, 91
FR 33160 (June 3, 2026) (the ``Policy Statement''). The Order's
analysis was expressly limited to that contract and to similarly
structured perpetual contracts referencing digital commodities with
deep, active, and continuous spot-market trading, and rested in
substantial part on characteristics of the bitcoin spot market--its
continuous, broadly distributed, transaction-based trading and the
resulting continuous observability of a reference price. The Policy
Statement stated that perpetual contracts referencing asset classes not
contemplated by the Order--including, among others, agricultural and
energy products--would be evaluated on their own terms, with each asset
class raising distinct considerations meriting independent analysis.
C. Applicable Legal Framework
The core principles applicable to DCMs govern which contracts a DCM
may list. Core Principle 3 provides that a DCM shall list for trading
only contracts that are not readily susceptible to manipulation.\2\ The
guidance in Appendix C to part 38 elaborates on that standard: for a
cash-settled contract, it addresses whether the settlement price is
reliable, acceptable, publicly available, and disseminated on a timely
basis, and is computed from a cash market that is sufficiently liquid
and not itself readily susceptible to manipulation; for a physically-
delivered contract, it addresses the adequacy of deliverable supply and
the contract's susceptibility to squeezes, corners, and congestion.\3\
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\2\ 7 U.S.C. 7(d)(3).
\3\ 17 CFR part 38, Appendix C.
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Core Principle 4 requires a DCM to monitor trading in its contracts
and in the underlying commodity and its derivatives, and to maintain
the capacity to prevent manipulation, price distortion, and disruptions
of the delivery or cash-settlement process.\4\ Core Principle 5
addresses position limitations or accountability for contracts subject
to such requirements; \5\ the federal speculative position limits in
part 150, adopted under section 4a of the Act,\6\ apply to enumerated
core referenced futures contracts, including NYMEX West Texas
Intermediate crude oil.
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\4\ 7 U.S.C. 7(d)(4).
\5\ 7 U.S.C. 7(d)(5).
\6\ 7 U.S.C. 6a.
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II. Request for Comment
The Commission invites comments on all aspects of the continuous
trading and perpetuals in the energy markets. Commenters are encouraged
to support their responses with data, empirical analysis, transaction-
or market-level statistics, and supporting documents rather than with
conclusory assertions; comments supported by verifiable data would be
useful in the Commission's analysis. Where a commenter believes a
consideration identified below can be addressed, the Commission
requests a specific description of how, including any contract terms or
safeguards necessary to do so; where a commenter believes a
consideration cannot be addressed, the Commission requests the factual
basis for that view. The numbering used below is for ease of reference
only; commenters need not address every question.
Part 1--24/7 Trading of Standard Futures
A. Extension of 24/7 Trading to Standard Futures
1. Does extending the trading hours of a standard futures contract
to a 24/7 basis, without otherwise altering its fixed expiration or
settlement, materially change the availability or reliability of the
prices it forms during overnight, weekend, and holiday periods? What
data supports the response?
2. What volume, open-interest, and participant-composition data
characterize the overnight and weekend sessions of standard energy
futures contracts, and how does price behavior in those sessions
compare to core-hours trading? Is liquidity in those sessions
sufficient that a price derived from them is reliable and not readily
susceptible to manipulation? What data or empirical evidence is there
that sufficient natural liquidity exists during weekend trading periods
to support orderly markets and efficient price formation?
3. The cash market for crude oil and other energy commodities is
generally assessed during defined windows, rather than traded 24/7.
Where a standard futures contract trades 24/7, but the underlying
physical market does not, what are the reliability and manipulation
implications of a futures price observed during periods in which no
contemporaneous physical trading occurs, and to what extent could such
off-hours prices be characterized as not fully or accurately
representing dynamics in the physical underlying?
4. What is the expected impact that weekend price formation will
have on leveraged market participants, including
[[Page 38336]]
the potential for additional variation margin obligations, collateral
demands, forced liquidations, and liquidity pressures arising from
price movement occurring outside the traditional trading week?
5. How would institutional investors need to adapt to manage
weekend price formation when existing risk management, governance,
compliance and oversight frameworks may assume that significant weekend
events result in opening price gaps rather than continuous benchmark
price movements capable of triggering contractual, regulatory,
investment, or risk management provisions? What would be the expected
cost of this adaptation, if any?
6. How should a DCM be prepared to address potential disruptions or
malicious trading during weekend and holiday trading? What requirements
should be imposed on their weekend and holiday control infrastructure?
Are there any expected gaps or differences in coverage or staffing on
weekdays compared to weekends?
B. Off-Hours Settlement and Payment Infrastructure
Contracts that trade 24/7 do so at times when traditional fiat
payment systems, including Fedwire and CHIPS, do not operate. The
following questions concern settlement and payment-infrastructure
considerations specific to 24/7 trading.
7. In a case where margin is called during these periods, how could
a designated contract market or derivatives clearing organization
ensure robust margin call and settlement processes arising during
overnight, weekend, and holiday periods when traditional payment
systems such as Fedwire and CHIPS do not operate? How do these
arrangements differ from those used for an existing futures contract
whose obligations are met during banking hours?
8. What real-time or tokenized payment infrastructure, if any,
would be integrated into the clearing process to satisfy required
margin payments when traditional payment systems are unavailable? What
legal, operational, and credit considerations arise from reliance on
such infrastructure, including any stablecoin or other tokenized
settlement asset?
9. What procedures would be available to clearing members and other
participants that do not hold digital or tokenized assets to meet a
margin obligation arising when traditional payment systems are
unavailable, and how would those participants be treated relative to
participants able to transfer value 24/7?
10. Should a contract traded 24/7 require an additional initial-
margin buffer in advance of weekend or extended-holiday closures to
account for the unavailability of traditional payment systems, and if
so, what models, historical-volatility measures, or other methods would
determine its size?
11. What forms of collateral could be eligible to satisfy margin
obligations arising when traditional payment systems are unavailable--
for example, cash, U.S. Treasury securities, tokenized Treasury
securities, or stablecoins--and what haircuts would apply to each,
including during periods of elevated volatility?
12. If a participant's funds cannot be transferred when traditional
payments systems are unavailable, what temporary liquidity
arrangements, if any, would a derivatives clearing organization need to
maintain, and on what terms and against what collateral? How would the
clearing organization manage the resulting credit and liquidity
exposure?
13. Should margin levels be adjusted during weekend or holiday
periods in response to changes in volatility or to events affecting the
underlying market, and if so, how should the circumstances warranting
an adjustment be defined and implemented given the unavailability of
traditional payment systems?
C. Effects of 24/7 Pricing on Related Markets, Contracts, and
Benchmarks
14. Do energy markets exhibit significant positive or negative
correlations with other asset classes, such that price movements during
extended trading hours could transmit shocks across markets, amplify
volatility, or contribute to broader market dislocations?
15. Would prices established during weekends or extended trading
hours trigger contractual provisions within over-the-counter
derivatives markets, including barrier options, structured products,
collateral agreements, and other contingent exposures, in a manner that
could create unintended economic outcomes, disputes, liquidity demands,
or risk transfers?
16. How do prices established during extended trading hours affect
physical commercial contracts in the real economy where futures prices
are incorporated through averaging mechanisms, settlement formulas,
index references, escalation clauses, or other pricing provisions,
embedded within supply, procurement, transportation, and financing
agreements?
17. How are prices established during extended trading hours
incorporated into official closing prices, settlement prices, benchmark
calculations, and major market indices, and what impact could this have
on the valuation of investment portfolios, index products, ETFs, mutual
funds, pensions, and other financial instruments that rely upon those
benchmarks?
18. How would investment managers, asset managers, pension funds,
insurance companies, and other fiduciaries incorporate changing
valuations based on extended hours trading in their portfolio
management, investor reporting, performance measurements, and
governance frameworks, particularly where investment mandates,
performance fees, risk limits, redemption provisions, financing
arrangements, or other contractual covenants depend upon periodic
valuation determinations?
19. Have there been any stress tests conducted to evaluate whether
concentrated one-sided retail or broader investor interest and
participation during weekend trading, particularly driven by new
geopolitical or significant news, could distort price formation,
amplify volatility, or create artificial price levels that influence
broader financial markets when traditional markets open? If so, what
were the results of these tests?
20. Is it a concern that price formation in a smaller contract that
trades 24/7 may influence the larger benchmark contract that trades
during traditional hours, especially during those periods when the
larger contract is unable to participate in the price-setting process?
21. Given that many of the contracts being proposed for 24/7
trading seem to be designed to cater to the needs of retail traders,
while the benchmark contracts were designed for commercial users, what
safeguards should a DCM have in place to protect the interests of
commercial users in the benchmark contracts?
22. What recalibration of market safeguards, risk controls, and
liquidity protections should a DCM implement during weekend trading to
ensure that price formation remains representative of genuine supply
and demand, and to prevent thin liquidity conditions from resulting in
disproportionate or runaway price movements that could subsequently
influence benchmark markets when traditional hours resume?
23. Are there any impact assessments, evaluations, studies, or
tests that have been conducted to evaluate the extent to which prices
formed during weekend
[[Page 38337]]
trading could be transmitted to physical contracts, OTC derivatives,
financing agreements, index calculations, valuation processes, and
other commercial arrangements that rely upon the benchmark prices? If
so, what did these studies conclude?
24. How will weekend price formation impact listed and cleared
options markets, including the treatment of time value, theta decay,
implied volatility, margin, and options pricing models that have
historically assumed limited or no weekend price discovery?
25. What will be the impact of weekend price formation on OTC
options and other contingent transactions that contain barrier levels,
binary outcomes, knock-in/knock-out provisions, digital payoffs,
trigger events, or other price-dependent contractual terms that have
historically been referenced to weekday market activity?
26. What is the expected effect of weekend price formation on the
valuation of cleared and uncleared swaps, including variation margin,
initial margin, collateral requirements, and related risk management
processes that have historically operated around a five-day price
formation cycle?
27. Is there a concern about who will bear the economic cost
associated with any increase in options value resulting from the
extension of price formation into weekends? Specifically, if weekend
trading increases the option value by creating additional periods
during which prices can move and contractual triggers can be activated,
which market participants are expected to bear that additional cost and
how is that cost distributed among option buyers, option writers,
market makers, clearing members, and end users?
28. How might prices established during weekend trading be used or
construed as triggering termination events, early termination rights,
additional collateral requirements, valuation disputes, market
disruption provisions, default thresholds, or other contractual
remedies under OTC derivatives, financing arrangements, and related
agreements that reference benchmark prices?
29. Have there been any evaluations of the potential impact that
weekend price formation may have on leveraged, inverse, and other
futures-linked ETFs whose investment objectives, portfolio
construction, hedging activities, and daily reset mechanisms were
designed around a traditional trading week?
30. Have there been any evaluations of the potential impact that
weekend price formation may have on options referencing ETFs, including
leveraged and inverse ETFs, particularly where the underlying benchmark
may continue to establish prices during the weekend while the ETF and
its listed options markets remain closed?
Part 2--Perpetual Energy Contracts
D. Use Cases, Commercial Demand, and Threshold Considerations
31. To what extent would the availability of a 24/7 traded energy
future's price bear on a designated contract market's ability to self-
certify a perpetual contract under 17 CFR 40.2 as consistent with Core
Principle 3? Should the Commission's manipulation-susceptibility
analysis depend on the actual liquidity present during 24/7 trading,
including overnight and weekend sessions, rather than solely on the
nominal availability of a continuous trading price?
32. For which physically delivered or stored energy commodities, if
any, would a perpetual contract serve identifiable hedging or risk-
management needs not already met by existing standard futures, option,
or swaps? Please distinguish, in your response, needs associated with
commercial or hedging demand from speculative demand. In responding,
please identify which attribute of a perpetual contract--its 24/7
(including overnight and weekend) trading, its absence of a fixed
expiration, its funding-rate convergence mechanism, or some
combination--drives any identified need, and whether that need could
instead be met by a standard futures contract listed for 24/7 or
extended trading hours. Do commercial market participants--for example,
producers, refiners, merchants, transporters, and end-users--anticipate
using a perpetual contract to hedge cash-market exposure?
33. What data currently exists regarding the actual users of
perpetual contracts in existing non-digital-asset markets; does this
data provide useful context for potential use in Commission-regulated
markets, such as the proportion of volume attributable to hedging
versus speculative activity?
34. Are there energy commodities for which a perpetual contract
would be particularly well-suited or particularly ill-suited, and what
characteristics of the underlying commodity and of the perpetual
structure--separate from the contract's trading schedule--are the
source of that distinction?
E. Effects on the Underlying and Related Markets, Commercial Hedgers,
and the Public Interest
35. To what extent, if at all, could trading volume in a perpetual
energy contract--including during overnight and weekend periods--affect
price formation in the standard futures contract it references,
including front-month price discovery? What data would demonstrate the
presence, absence, or magnitude of any such effect, and how would it be
distinguished from ordinary cross-market price relationships?
36. Commercial participants such as producers, refiners, and end-
users rely on standard futures contracts to hedge cash-market exposure.
To what extent, if at all, could listing a perpetual contract affect
the volatility, margin requirements, or reliability of those standard
futures contracts for hedging purposes? What safeguards, if any, would
be appropriate to address any adverse effect on commercial hedgers, and
what are their costs and benefits?
37. How should the Commission measure or assess the potential
effects--whether beneficial or adverse--of a perpetual contract
referencing crude oil or another physically delivered energy commodity
on the underlying physical market, on commercial hedgers, and on the
broader economy, including any effects on the prices of refined
products or other goods? What data, methodologies, or analytical
frameworks would support such an assessment?
F. Reference Price and Continuous Observability
38. Appendix C to part 38 provides that a cash-settled contract is
not readily susceptible to manipulation only where the settlement price
is reliable, acceptable, publicly available, and timely, and is
computed from a cash market that is sufficiently liquid and not itself
readily susceptible to manipulation. Is there a cash price series for
crude oil, or for specific grades, that satisfies those factors and
that could serve as a reference price observable at every funding
interval? Please describe the series, its computation methodology and
governance, and the venues and transaction volumes from which it is
derived. If no such cash price series is available at every funding
interval, does the perpetual structure nonetheless require one;
alternatively, if a non-spot reference (the futures price, an assessed
physical price, or a composite index) is used instead, what are the
reliability and manipulation-resistance implications?
[[Page 38338]]
39. To what extent is price discovery for crude oil and other
energy commodities located in the futures market rather than in a
continuously traded physical cash market (and how much does this differ
across energy products)? What are the reliability and manipulation
implications of a perpetual contract referencing (a) the DCM's own
futures price, (b) the futures price at a third-party designated
contract market; (c) an assessed or surveyed physical price, or (d) a
composite index, and what data may help quantify the liquidity and
transaction frequency of each candidate source?
40. Are there reference-price methodologies outside of the digital-
asset context which could provide 24/7, manipulation-resistant
observability at every funding interval, including during overnight and
weekend periods of reduced liquidity? If so, please describe the
methodology (or set of methodologies) and provide data demonstrating
that the reference price market is sufficiently liquid and transparent
at those times.
41. What volume, transaction-frequency, and concentration data
characterize the cash and/or futures markets that any reference price
would draw upon, and what do those data indicate about the
susceptibility to manipulation of the given price? Please distinguish
(i) references drawn from markets the Commission does not directly
surveil, such as assessed or surveyed physical prices, from (ii)
references drawn from a CFTC-regulated futures price. For the latter,
what additional cross-market manipulation concerns arise from the
funding linkage itself--for example, use of positions in the perpetual
to influence the referenced futures price, or the converse, at or
around the funding-calculation interval?
G. Convergence, the Funding Mechanism, and Cost of Carry
42. A standard futures contract achieves convergence with the
underlying through a fixed expiration. For a commodity whose term
structure reflects storage costs and convenience yield, how does the
absence of a fixed expiration affect convergence (if at all), and what
role would the funding mechanism play? Funding-rate mechanisms
developed in other markets were generally designed for assets without
significant cost of carry. Can a funding-rate mechanism accurately
reflect physical market dynamics such as storage costs, convenience
yield, and seasonality? If so, please describe how the funding
calculation would incorporate these factors.
43. What distortions, if any, could arise over extended holding
periods due to the interaction of accumulated funding payments with the
physical fundamentals of a storable energy commodity, including storage
cycles, seasonal demand, and term structure (contango/backwardation)?
In a case where there are predictable distortions, are there contract
specifications that can mitigate these decisions?
44. Are there alternative convergence mechanisms, other than a
funding rate, that could maintain price parity between a perpetual
contract and a physical energy commodity's underlying value?
H. Physical Delivery, Storage Constraints, and Market Stress
45. Appendix C to part 38 addresses the adequacy of deliverable
supply and susceptibility to squeeze and corners. What is the estimated
deliverable supply for crude oil and other energy products at the
relevant pricing point or points, how are they measured, and how do
they compare to the position sizes a perpetual contract could
accumulate? Please provide associated data, including any methodology
used to estimate potential perpetual market activity.
46. What storage capacity and utilization data characterize the
relevant pricing point or points (e.g., Cushing, Oklahoma for the WTI
benchmark, or the Henry Hub), and how do storage constraints influence
price formation and the susceptibility of a reference price to
distortion?
47. On April 20, 2020, the expiring NYMEX West Texas Intermediate
crude oil futures contract settled at a negative price amid constrained
storage at the delivery point. What are the implications of such
physical-market dislocations for the design and resilience of a
perpetual contract referencing crude oil, including for its mark price,
funding payments, and any automatic liquidation processes? Are there
concerns about the performance of a perpetual contract's mechanics in
highly unusual price shifts, like rapid falls to below zero? The
standard futures contract that experienced this episode was eventually
resolved through the expiration and delivery process--the dislocation
was confined to the expiring contract, while later-dated contracts
traded at positive prices the same day. A perpetual has no such
terminal event. Commenters are asked to address both possibilities:
that a perpetual should faithfully track the underlying, so a negative
reference is correctly reflected; or that it should be designed to
remain resilient to such extremes--and for each, whether a mark-to-
market and funding mechanism designed for positive-price assets can
compute coherent values at or below zero, and how the absence of a
convergence event to resolve the dislocation affects performance.
48. How would a perpetual contract behave differently than a
standard futures contract during episodic supply shocks characteristic
of energy markets, including geopolitical disruptions, supply decisions
by major producers, severe weather, and infrastructure outages? In
particular, how would the absence of a fixed expiration and the
presence of 24/7 mark-to-market, funding, and liquidation mechanics
affect that behavior relative to a standard contract? What risk of
liquidation cascades during such events is supported by any available
data on historical volatility and price jumps/gaps?
49. Given that a perpetual contract provides no delivery, does its
design need to account for the storage, logistics, and deliverable-
supply constraints that drive price formation in the underlying
physical market; if so, under what circumstances and through what
mechanism, given that a perpetual lacks both the delivery process and
the fixed expiration through which a standard futures contract
internalizes those constraints?
I. Susceptibility to Manipulation, Surveillance, and the Compliance
Demonstration
50. Core Principle 3 requires a DCM to list only contracts not
readily susceptible to manipulation. For a perpetual contract, the
reference price must be reliable at every funding interval on a
continuous basis rather than at a single settlement. What features
would such a contract require to satisfy Core Principle 3 on that
continuous basis, and what data demonstrates that such reliability is
(or is not) achievable for crude oil and other energy commodities?
51. How could the timing of a funding-interval calculation be
protected against manipulation, particularly during overnight and
weekend windows of reduced liquidity?
52. Core Principle 4 requires a DCM to monitor trading and the
underlying market to prevent manipulation, price distortion, and
disruption of the delivery or cash-settlement process. What
surveillance capabilities--across the perpetual contract, related
futures and options, and the underlying physical market, on a
continuous
[[Page 38339]]
basis--would be necessary to satisfy Core Principle 4 and are those
capabilities currently feasible? What access to physical data or
information-sharing arrangements would be required over and above those
used for existing energy futures?
53. What would a DCM be required to demonstrate to establish that a
perpetual contract on crude oil or another energy commodity is not
readily susceptible to manipulation, consistent with Core Principle 3
and the guidelines in Appendix C to part 38? Based on currently
available information and data, can such a demonstration be made, and
if so, on what evidentiary basis?
J. Position Limits and Accountability
54. NYMEX West Texas Intermediate crude oil is a core referenced
futures contract subject to federal speculative position limits under
17 CFR part 150, with spot-month limits tied to estimated deliverable
supply. How would a perpetual contract referencing such a commodity be
integrated into the part 150 framework, given that it has no delivery
and no expiration (e.g., should the perpetual be considered
economically equivalent to the referenced contract, inheriting the
associated limits)? Commenters are invited to evaluate that approach
and any alternatives, including the threshold question whether such a
perpetual is economically equivalent to the referenced contract.
55. The spot-month limit applies during a defined period
approaching the referenced contract's expiration and is set as a
percentage of estimated deliverable supply. A perpetual contract has no
expiration, and therefore no spot month, and makes no delivery. How, if
at all, can or should a spot-month limit be applied to a perpetual?
Should a perpetual position be treated as continuously within the spot
month, never within it, or mapped to the spot month of the referenced
contract as it rolls--and what are the consequences of each for the
limit's effectiveness?
56. Because a perpetual's mark and funding reference a price that
converges to physical delivery only through the referenced contract, a
large perpetual position may create an economic incentive to influence
the referenced contract's price during its spot month without the
perpetual itself participating in delivery. To what extent does an
uncapped or differently capped perpetual position aggregate that
incentive, and could it facilitate the spot-month manipulation that
position limits are designed to prevent? What aggregation or limit
design would address this, and is it achievable for a contract with no
delivery and no expiration?
57. How would spot-month limits, the delivery-month step-down, and
aggregation requirements apply to a contract without a defined delivery
period? Should perpetual open interest be treated as spot-month-
equivalent, made subject to a separate limit, or addressed through
position accountability levels instead?
58. How would the bona fide hedging definition, which is framed
around offsetting cash-market risk and the delivery process, apply to
positions in a perpetual contract?
59. Would the introduction of a perpetual contract affect the
integrity or administration of position limits in the related standard
futures contract, and if so, how?
K. Clearing, Margin, and Default Management
60. What clearing, margining, and default-management considerations
differ from, or arise in addition to, those applicable to an existing
cleared futures contract on the same commodity for a perpetual contract
referencing an energy commodity, particularly given continuous trading,
the absence of expiration, and the potential for rapid price movement
during physical-market stress?
61. Existing margin frameworks already respond to rapid price
movement in volatile energy contracts; are there any additional
protections or framework changes that should be incorporated to ensure
adequate margin coverage for a perpetual. In what ways should initial
and maintenance margin be calibrated differently for a leveraged, no-
expiration contract on a volatile energy commodity, and or uniquely
respond to changes in physical-market conditions? In particular, how
should margin models account for funding-rate risk--the risk that
continuously accruing funding obligations become large or volatile
during stress--and for the ongoing nature of that obligation given the
absence of expiration?
62. What automatic liquidations or risk-mitigation mechanisms, if
any, would be appropriate, and how can they be designed to avoid
amplifying price movements during periods of market stress?
63. What operational considerations do the calculation and
settlement of funding payments on a continuous basis, including banking
and settlement cycles and the treatment of funding obligations in a
default?
L. Customer Protection, Leverage, and Access
64. What customer-protection considerations--including suitability,
disclosure, and the risk of rapid loss--arise from offering a perpetual
contract on a geopolitically sensitive physical commodity to retail
participants?
65. Should access to perpetual contracts on energy commodities be
limited to certain categories of participants, such as eligible
contract participants, tiered by sophistication, or otherwise
condition? What are the costs and benefits of any such limitation?
M. Cross-Asset Criteria, Line-Drawing, and Miscellaneous
66. What objective and generally applicable criteria should the
Commission consider in determining whether a given underlying commodity
can support a perpetual contract consistent with the Core Principles--
for example, the existence of a continuous, transaction-based reference
price meeting the standard in Appendix C to part 38; the degree of
storage-, delivery-, or logistics-driven price formation compatibility
with the position-limits regime; or demonstrable continuous
manipulation-resistance? Are there additional or alternative criteria
the Commission should consider?
67. When applying any such criteria, are there energy commodities
that are clearly appropriate, clearly inappropriate, or genuinely
uncertain candidates for a perpetual contract, and if so why?
Issued in Washington, DC, on June 22, 2026, by the Commission.
Christopher Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix To Request for Comment on the Extension of Standard Futures
Contracts to 24/7 Trading and on Perpetual Contracts Referencing
Physically Delivered or Storable Energy Commodities--Commission Voting
Summary
On this matter, Chairman Selig voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2026-12784 Filed 6-24-26; 8:45 am]
BILLING CODE 6351-01-P