HPC continues US advance with SEC, CFTC perpetual contracts framework push

The Hyperliquid Policy Center (HPC) told the SEC and CFTC on August 24 that cash-settled equity perpetual contracts should be allowed into US markets as “security futures.”

Perpetual contracts have become one of the most liquid instruments in global markets; however, to date, US law has not provided a defined answer to the question of whether they are futures or swaps. 

Hyperliquid Policy Center (HPC) is trying to get that answer with its comment letter, where it stated that the two categories, futures and swaps, have identical economics but carry different rules on who can trade them and where.

In its letter and an accompanying blog post, HPC pointed to a federal judge who once likened sorting these products to deciding “whether tetrahedrons belong in square or round holes.” 

Novel options, index participations, and volatility-index futures all ran into the same boundary between the agencies over the past four decades, and each dispute stalled new markets for years.

What HPC wants the agencies to do

HPC’s core claim is that a perpetual contract already behaves like a futures contract. It cited the hallmarks courts have long used, such as standardized terms, fungibility, futurity, and the option to close out through an offsetting trade and said the missing expiry date is not disqualifying. 

… Continue reading the full article at the original source below.