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(Bloomberg) — The Commodity Futures Trading Commission asked for public input on both perpetual contracts and 24/7 trading for traditional energy derivatives, after industry heavyweights raised concerns about offshore platforms and excessive levels of risk.
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“As registered entities extend trading hours and introduce new contract designs, a clear, data-driven record will help the Commission better understand these developments’ implications and impact in the market,” Chairman Michael Selig said in a statement Monday.
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The agency noted that the two matters were “distinct but related” given the growth in trading of so-called perps, which are a type of derivatives contract without a fixed expiration date.
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Some institutional traders like the products because they find them easier to maintain without having to roll over into new contracts. But as more companies look to expand into the products — which can include leveraged trading — critics worry it could gain greater traction with retail traders.
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The CFTC recently granted Kalshi permission to launch Bitcoin perpetual futures contracts, while noting that perps tied to other types of assets, including energy and agriculture products, would be subject to separate scrutiny.
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The agency specifically asked Monday for comment on perpetual energy contracts that can trade 24/7, including overnight and on holidays or weekends when traditional exchanges are closed.
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CME Group Inc. and Intercontinental Exchange Inc. recently raised concerns about energy perpetuals trading on offshore platform Hyperliquid that may impact pricing on their own exchanges. The industry heavyweights have been pushing for Hyperliquid to register with the agency.
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CME sued the CFTC last week after the regulator permitted Kalshi to trade crypto perpetuals contracts. The derivatives exchange claimed the agency disregarded its statute in allowing the products to be classified as futures, rather than the more complex swaps.
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