CFTC Issues 24/7 Trading Surveillance Guidance, Emphasizing Crypto Derivatives Are Better Suited for Round-the-Clock Trading

BlockBeats News, May 29, the U.S. Commodity Futures Trading Commission (CFTC) Division of Clearing and Risk, Market Oversight, and Market Participants jointly issued staff guidance on regulatory oversight of 24/7 trading, clearing, and settlement matters. Given the growing market interest in 24/7 trading models, the CFTC stated that it aims to encourage market-responsible innovation and remind designated contract markets, swap execution facilities, derivatives clearing organizations, and futures commission merchants of their obligations under the Commodity Exchange Act and related regulations.

The guidance primarily outlines the regulatory responsibilities and staff expectations for institutions planning to engage in 24/7 trading and clearing activities, discussing the differences that various asset classes need to consider when assessing the suitability of 24/7 trading, clearing, and settlement. For example, the CFTC noted that due to the digital infrastructure and global market coverage of crypto assets, derivatives based on crypto assets may be more suitable for 24/7 trading. On the other hand, in markets for agricultural products and other derivatives, factors such as customer base, regional characteristics, specific trading, and hedging needs may make them unsuitable for 24/7 trading.

The CFTC stated that registered entities should take proactive measures to ensure that the market continues to develop in a manner that complies with the Commodity Exchange Act and related regulatory requirements.