ISDA Response to CFTC on Trading and Clearing of Perpetual Derivatives

On May 21, ISDA responded to a US Commodity Futures Trading Commission (CFTC) request for comment on the trading and clearing of perpetual-style derivatives. In the letter, ISDA underscores the importance of a comprehensive regulatory framework that can address the unique design and risk management features of perpetual derivatives. ISDA highlights several initiatives relevant to this discussion, including the development of standardized legal documentation through the ISDA Digital Asset Derivatives Definitions, which aim to reduce legal uncertainty and counterparty risk for over-the-counter products referencing Bitcoin and Ether. Additionally, ISDA has explored bankruptcy risk management for digital asset markets, focusing on close-out netting and custody. ISDA continues to engage with global regulators on policy matters related to classification, custody and systemic risk, and is examining how technologies like smart contracts and distributed ledger infrastructure can support safe execution and clearing of digitally native or perpetual instruments. ISDA welcomes further engagement between the CFTC and market participants to examine these issues more closely.

Documents (1) for ISDA Response to CFTC on Trading and Clearing of Perpetual Derivatives

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