MoFo's Financial Markets & Innovation

CFTC Releases Staff Advisory on Mention Markets

On September 22, the CFTC’s Division of Market Oversight issued a staff advisory on the listing and trading of mention market contracts. The advisory highlights the heightened risk of manipulation with these contracts because their settlement depends on the conduct of an individual without independent verification. The advisory outlines when mention market contracts may be listed under the Commodity Exchange Act and CFTC regulations, and provides factors that designated contract markets should consider when submitting mention market contracts under Commission Regulations Section 40.2 or 40.3. The advisory also reminds markets to ensure listed contracts aren’t susceptible to manipulation through contract-specific analysis prior to submission.

CFTC Innovation Task Force to Host Frontier Forum Series on Innovative Financial Technologies

On September 21, the CFTC’s Innovation Task Force announced the launch of the Frontier Forum Series, a series of public roundtables focused on innovative financial products. Each Frontier Forum will convene individuals across the public and private sectors to discuss how the Commission can promote responsible innovation while protecting market participants and preserving the strength of U.S. financial markets. The first roundtable, scheduled for October 28, will be focused on AI and agentic finance.

Three Exchanges File for Equity Perpetual Derivatives

Three U.S. exchanges have recently filed with the CFTC to list equity perpetual derivatives contracts tied to individual U.S. stocks. The proposed contracts would be classified as security futures products subject to joint SEC and CFTC oversight under the Commodity Futures Modernization Act of 2000 and would not confer shareholder rights such as voting or dividends, functioning instead as synthetic, cash-settled instruments providing leveraged price exposure with no fixed expiration date. The initial product suites are expected to cover major large-cap U.S. equities, with plans for extended or near-continuous trading hours in some cases. 

CFTC Releases Updated FAQs on Tokenization and Blockchain Use

On September 24, the CFTC Market Participants Division, Division of Market Oversight, and Division of Clearing and Risk updated previously released FAQs Concerning Registrant and Registered Entity Activities Relating to Crypto Assets and Blockchain Technologies. The update includes 4 new questions on permitted forms of tokenized investments and the utilization of blockchain for recordkeeping purposes under CFTC regulations. The new FAQs address topics from CFTC Staff Letter 25-39 (Tokenized Collateral Guidance) and CFTC Staff Letter 26-05 (Staff No-Action Position Regarding Digital Assets Accepted as Margin Collateral).