No Closing Bell: CFTC Staff Advisory Provides Guidance on 24/7 Trading and Clearing

Closing bells may soon be a thing of the past in US derivatives markets. In Advisory Letter No. 26-16 (the Advisory), the Commodity Futures Trading Commission’s (CFTC or Commission) Division of Clearing and Risk, Division of Market Oversight, and Market Participants Division (collectively, the Divisions) set out their regulatory expectations for derivatives clearing organizations (DCOs), designated contract markets (DCMs), swap execution facilities (SEFs), and futures commission merchants (FCMs) considering around-the-clock trading and clearing. The CFTC released the Advisory alongside a separate policy statement announcing that the Commission will review perpetual futures contracts case by case, signaling that crypto perps, a popular derivative that has existed almost entirely overseas, may soon trade on regulated US platforms.[1] Though the Advisory creates no new obligations, it makes clear that Division staff will closely scrutinize any plans to extend regulated business operations to a 24/7 basis.

The Divisions attribute the push toward 24/7 markets to technological developments, such as blockchain infrastructure, stablecoins, and mobile trading platforms, as well as growing interest from both retail and institutional participants. The Advisory arrives as part of Chairman Michael S. Selig’s broader “Future-Proof” initiative, a comprehensive review of the agency’s existing rules aimed at modernizing requirements for new entrants and incumbents alike.[2] 

It also comes as the Securities and Exchange Commission (SEC) and CFTC continue to coordinate their digital-asset oversight under the joint Project Crypto initiative, and as Congress considers the CLARITY Act of 2025.[3] That bill, which passed the House with bipartisan support, would establish a new CFTC registration framework for digital commodity exchanges, brokers, and dealers, expanding the agency’s jurisdiction and codifying many of the same operational, surveillance, and system-safeguard expectations the Advisory addresses. The Divisions highlighted that crypto asset derivatives are particularly well-suited for continuous trading given their digital infrastructure, while other markets, such as agricultural products, present more significant hurdles. For any registered entity considering this shift, the Advisory offers a roadmap of the areas staff will examine and where compliance gaps are most likely to emerge.

Trading Obligations: What DCMs and SEFs Need to Address

For trading venues, the Advisory identifies four core areas of concern.

• Settlement Design. Staff advise against offering contracts that settle during off-peak periods, such as overnight or weekends, in the underlying market, as these windows carry heightened manipulation and price distortion risk.

• Real-Time Monitoring and Risk Controls. DCMs and SEFs must demonstrate they can conduct genuine real-time surveillance around the clock. The Divisions warned that thinly traded off-hours markets create greater opportunities for manipulation, front-running and wash trading, and venues must show their automated surveillance and circuit-breaker mechanisms are calibrated for those conditions.

• System Safeguards. Continuous operations demand high-availability infrastructure with no single points of failure, redundant systems, real-time data synchronization, and the ability to perform rolling upgrades and live cutovers without interrupting markets. Business continuity and disaster recovery plans must be tested and capable of responding to incidents at any hour.

• Compliance Staffing Capabilities. Around-the-clock trading requires around-the-clock surveillance. Venues that rely on regulatory service providers must ensure those providers can monitor continuously and complete investigations promptly.

Clearing Obligations: What DCOs Need to Address

For clearinghouses, the Advisory addresses several key considerations, starting with how DCOs structure collateral collection when trading runs continuously. A market operating on a 24/7 basis does not necessarily mean clearing operates on the same schedule. The Divisions identified three approaches currently in use or under consideration: collateral calls continue to only be made during traditional market hours (current 24/7 trading in US derivatives markets); participants can opt into posting collateral during weekend hours; or participants are required to post collateral during weekend hours. The Advisory highlights that each model carries a different risk profile.

Where clearing remains on traditional market hours despite continuous trading, a DCO must demonstrate it has sufficient financial resources and liquidity to meet its obligations across multi-day periods, including bank closures, consistent with Core Principle B. Margin calibrations may also need adjustment to account for the fact that weekend trading spans multiple days without an intervening settlement cycle.

Where weekend collateral exchange does occur (either mandatorily or voluntarily), eligible collateral must still meet the standard of minimal credit, market, and liquidity risk. Traditional cash collateral is less available on weekends, which may require quantifying the incremental risks involved. Stablecoins and other crypto assets may be better suited for weekend collection, but they introduce their own risk considerations that staff will scrutinize. 

Notably, the CFTC has already taken steps in this direction through its Digital Assets Pilot Program, launched in December 2025, which enables certain digital assets to serve as collateral in derivatives markets, and through staff letters clarifying the capital treatment of payment stablecoins.[4] These existing frameworks may inform how DCOs approach the collateral challenges unique to continuous operations. Market participants should also consider that the GENIUS Act, signed into law in July 2025, provides that payment stablecoins not issued by a “permitted payment stablecoin issuer” under the Act are ineligible as margin and collateral for FCMs, DCOs, broker-dealers, and swap dealers, potentially limiting which stablecoins can serve this function in practice.[5]

DCOs will also need to update enterprise technology risk assessments, revise procedures for reporting material system impairments during weekend hours, and develop staffing plans across operations, risk, compliance, and cybersecurity that support continuous operations.

FCM-Specific Considerations

For FCMs, the Advisory highlights several concerns. The Divisions explained that extended trading without weekend settlement can cause segregation violations if markets move sharply: customer accounts can become undermargined, and FCMs cannot collect additional margin during non-banking hours. FCMs must assess and adjust targeted residual interest levels to cover these extended exposure windows and should consider requiring customers to prefund accounts used for 24/7 trading.

Auto-liquidation programs also warrant close scrutiny. A sharp price move during off-hours could trigger cascading same-direction liquidation orders, and customers may be unable to deposit margin to halt the process. FCMs must update their customer risk disclosures under CFTC Regulation 1.55 to address these dynamics.

Finally, FCMs must evaluate whether their front-office and back-office systems, as well as third-party service providers, can operate continuously, including during overnight and weekend hours.

Rule Filings Under Part 40

Any DCM, DCO or SEF moving toward 24/7 operations will need to submit rule changes under Part 40, whether through self-certification or formal Commission review. Those filings must include comprehensive explanations of the proposed changes, their expected effects on risk and the mitigation strategies in place, as well as demonstrate compliance with all relevant Core Principles. Filings must also address any substantive opposing views raised by board members or market participants that were not incorporated into the final rule. The Divisions emphasized that registered entities introducing continuous trading and clearing should actively solicit and address opposing views, as those perspectives may highlight operational, risk or compliance concerns that should be resolved before implementation.

Engaging With CFTC Staff

Finally, the Advisory urges registered entities and FCMs to engage with staff before submitting rule filings or implementing operational changes. Staff intend to conduct a detailed review of any plans to extend market hours, and early engagement will help registrants identify and address compliance gaps before they become problems.

Advisory Letter No. 26-16 is available here. If you have follow-up questions, please contact your Katten attorney or any of the following Financial Markets and Funds and Financial Markets Litigation and Enforcement attorneys.