Hyperliquid Policy Center urged the SEC and CFTC to clarify whether equity perpetuals can qualify as security futures. HPC said clearer classification could bring more perpetual trading into
Hyperliquid Policy Center has asked the SEC and CFTC to clarify whether equity perpetual contracts can qualify as security futures. The request follows the CFTC’s approval of the first U.S.-listed perpetual contracts as futures in May. HPC says a clear classification could bring more perpetual trading into U.S. markets.
https://twitter.com/HyperliquidPC/status/2091858741066858868?s=20According to HPC, perpetual contracts share several features with futures, including standardized terms, fungibility and the ability to exit through an opposite position. However, their lack of fixed expiry has complicated their treatment under U.S. law.
The group said similar contracts have received different classifications in past enforcement actions. That uncertainty has helped push perpetual markets offshore, despite their large trading volumes. The CFTC and SEC have spent the past year examining the issue.
In June, both agencies requested comments on how swap definitions apply to novel products. The agencies also asked whether cash-settled equity perpetuals could qualify as security futures. HPC submitted its comment in response to that request.
HPC wants regulators to classify perpetuals according to their contract features and trading structure. It said the reference asset should determine regulatory oversight, not whether the contract qualifies as a future or swap.
The group also asked regulators to confirm that qualifying equity perpetuals can list as security futures. It wants exchanges to retain their existing flexibility when deciding which products to list.
Additionally, HPC called for consistent classifications across both agencies. It also asked regulators to modernize the security futures framework for newer product structures. Security futures fall under both SEC and CFTC oversight. Exchanges registered with either agency can list them through the existing framework.
HPC said more than $480 billion in perpetual contract volume traded on Hyperliquid during the past 10 months. Those markets included oil, metals, currencies, equity indexes and single stocks. The group said regulators could provide clarity without formal rulemaking.
Interpretive guidance, policy statements and staff action could establish the framework initially. CFTC Chairman Selig has said the issue concerns whether perpetual markets operate under American oversight and standards. HPC said it will continue discussions with the SEC and CFTC.
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