On May 29, 2026, the CFTC released Staff Letter No. 26-16 setting out expectations of registrants planning to trade, clear, or settle derivatives on a continuous (24/7) basis. Here is what you need to know.
Key Takeaways
- Any registrant considering 24/7 operations should engage CFTC staff before moving forward. The advisory frames this as a strong expectation, not a courtesy.
- Designated Contract Markets (“DCMs”), Derivatives Clearing Organizations (“DCOs”), and Swap Execution Facilities (“SEFs”) moving to 24/7 will need to submit rule changes under Part 40 with a comprehensive explanation of proposed changes, risk impacts, and mitigation strategies.
- Each CFTC-regulated entity type faces distinct operational questions it must be prepared to answer.
- Futures Commission Merchants (“FCMs”) face immediate work on segregation risk, customer disclosures, and systems readiness.
- DCOs need to recalibrate margin models for non-banking hours.
- DCMs must prove they can surveil markets continuously, especially during low-liquidity sessions that the CFTC flagged as manipulation targets.
- Although the advisory is not technically binding, it functions as the CFTC’s evaluation framework for any 24/7 proposal.
The Full Story
The CFTC’s Division of Clearing and Risk, Division of Market Oversight, and Market Participants Division jointly released Staff Letter No. 26-16 outlining detailed operational expectations for registrants considering continuous operations.
The advisory is directed at exchanges (DCMs and SEFs), clearinghouses (DCMs), and brokers (FCMs) that are exploring 24/7 operations. It was released alongside the CFTC’s historic approval of the first bitcoin perpetual futures contract listed on a U.S. exchange and a separate policy statement on perpetual contracts, all part of Chairman Selig’s “Future-Proof” initiative to modernize the agency’s regulatory framework for digital-asset markets.
The advisory does not create new legal obligations, but it is the clearest signal yet of how CFTC staff will evaluate any proposal to extend trading, clearing, or settlement beyond traditional market hours.
The advisory noted that not all products are equally suited to 24/7 trading. Crypto derivatives are the most natural fit given their digital-native infrastructure and global trading patterns. Other markets, such as agricultural products, may be less appropriate given their regional customer bases and specialized hedging practices.
Exchanges (DCMs and SEFs)
Exchanges must demonstrate they can maintain market integrity around the clock, not just during peak hours. The advisory sets out several specific expectations.
Real-time surveillance must be genuinely continuous. Staff warned that thinly traded off-hours sessions create heightened risk of manipulation, front-running, and wash trading. Automated surveillance tools and circuit breakers need to be calibrated for low-liquidity conditions, not just copied from daytime settings.
System safeguards and business continuity plans need to account for 24/7 uptime. That means updating enterprise technology risk assessments, developing procedures for reporting material system impairments during weekend hours, and building staffing plans that cover operations, risk, compliance, and cybersecurity on a continuous basis.
The Staff expects exchanges to maintain surveillance, compliance, and disciplinary capabilities at all hours if they choose to keep markets open at all hours. Compliance and enforcement staffing cannot go dark on nights and weekends.
Clearinghouses (DCOs)
Clearinghouses face a core operational challenge because banks close even if the market remains open. The advisory highlights several areas where DCOs need to demonstrate preparedness.
Margin models need to account for the inability to collect additional collateral during non-banking hours. For example, if a position moves against a clearing member on a Saturday night, the DCO cannot rely on a margin call that won’t settle until Monday morning.
Liquidity and financial resource management must be stress-tested against continuous operations. DCOs should evaluate whether their default management procedures work when key counterparties and settlement banks are offline.
Operational infrastructure, including technology risk assessments, system impairment reporting procedures, and staffing across risk, operations, and cybersecurity, must be redesigned to support continuous clearing without scheduled downtime.
Brokers (FCMs)
Brokers sit at the intersection of customers and clearinghouses, and the advisory identifies several areas where 24/7 trading creates immediate risk.
Segregation risk during non-banking hours is the primary concern. If markets move sharply over a weekend and customer accounts become undermargined, an FCM cannot collect additional margin until banks reopen. That gap could lead to segregation violations, meaning one customer’s funds effectively backstop another customer’s losses. FCMs need to stress-test this scenario and have a plan.
Customer risk disclosures must be updated. CFTC Regulation 1.55 requires FCMs to disclose material risks to customers, and 24/7 trading introduces new ones. These include the possibility of margin calls that cannot be met in real time, reduced liquidity during off-hours, and the potential for sharper price moves when fewer participants are in the market.
Systems and vendor readiness require evaluation. FCMs need to confirm that front-office, back-office, and third-party service providers can operate continuously, including overnight and on weekends, without degradation in performance or compliance coverage.
What’s Next
The advisory strongly encourages early engagement with CFTC staff. Staff have indicated they intend to conduct detailed reviews of any 24/7 plans, and early conversations can help registrants identify and resolve compliance gaps before they become obstacles in the filing process.
Any DCM, DCO, or SEF moving toward 24/7 operations will need to submit rule changes under Part 40 of the CFTC’s regulations, either through self-certification or formal CFTC review. Filings must include comprehensive explanations of proposed changes, their expected effects on risk, and the mitigation strategies in place.
This advisory sits within a broader push that includes the CFTC’s Digital Assets Pilot Program, the CLARITY Act, and the joint SEC-CFTC Project Crypto initiative. Taken together, the trajectory is clear. Firms evaluating continuous operations should treat this advisory as the starting point for internal readiness assessments rather than a document to file away.
