CFTC Issues No-Action Letter for DCMs Regarding Converting Existing Perpetual-Style Broad-Based Security Index Futures into True Perpetual Futures

WASHINGTON — The Commodity Futures Trading Commission’s Division of Market Oversight today announced it has issued no-action relief to designated contract markets seeking to convert their existing perpetual style broad-based security index futures contracts into true broad-based security index perpetual futures.

According to the letter, DCMs may remove expiration dates from their existing broad-based security index futures perpetual style futures contracts and implement these amendments to convert them into true broad-based security index perpetual futures contracts effective upon the satisfaction of certain customer protection and procedural conditions in the letter. These include soliciting feedback from market participants with open positions; providing advance notice and an opportunity to exit positions; offering appropriate risk disclosures; and ensuring that no other material contract terms are modified. 

DCMs must also file the amendments under CFTC Regulations 40.5 or 40.6 and certify compliance with all conditions.