Index Perps Lose Their Expiry Date: What Holders Must Know
Short answer: A CFTC staff letter dated October 3, 2026 lets US exchanges delete the expiration date from perpetual-style futures on broad stock indexes. It does not change the funding mechanism. It does require at least five calendar days of notice and a chance to close out under the old terms.
The relief expires October 20, 2026, which is today.
Until now, “perpetual” in US markets was partly a label. The contracts had expiry dates up to 25 years away.
This post walks through what the letter actually says, what the eight conditions protect, and what a holder should do if a notice arrives.
Educational content, not investment or legal advice. Quotes and dates come from CFTC Letter No. 26-29 dated October 3, 2026.
What This Covers
- What does CFTC Letter 26-29 allow?
- Why did the CFTC bother with an expiry date?
- What are the eight conditions?
- What should open-position holders do?
- Does removing the expiry change funding?
- Where the Relief Stops
What does CFTC Letter 26-29 allow?
CFTC Letter No. 26-29, issued October 3, 2026 by the Division of Market Oversight in response to a Coinbase Derivatives request dated October 1, 2026, says staff will not recommend enforcement if a designated contract market removes expiration dates from existing broad-based security index perpetual-style futures with immediate effect.
In plain terms, an exchange can turn a “perpetual-style” contract into a true perpetual without waiting out the usual 10-business-day review under Regulations 40.6(a)(3) and 40.6(b)(1). The letter applies to any designated contract market, not only the one that asked.
The relief is narrow. It covers only contracts on broad-based security indexes, and footnote 25 of the letter says it does not apply to perpetual-style contracts on any other asset.
Why did the CFTC bother with an expiry date?
The expiry date matters because, per the letter, changing a material term on a contract with open interest can move prices and create winners and losers who did nothing but hold a position.
The letter’s background explains the sequence. On May 29, 2026 the Commission issued an order on KalshiEX’s BTCPERP, treating perpetual futures on bitcoin and other digital commodities as futures. On August 18, 2026 Kalshi filed a broad-based security index perpetual, which the letter says was deemed approved on October 2, 2026.
Coinbase Derivatives had listed look-alikes with long expiries because the rules were unclear. Now that the index version is approved, it wants to drop the dates.
When I checked the letter against the press coverage, I found that secondary summaries name specific Coinbase index products. The letter itself does not. It says only “Existing Perpetual-Style Contracts.”
What are the eight conditions?
The letter sets eight conditions an exchange must meet before it removes an expiration date, including at least five calendar days of notice, feedback from holders, and a chance to close out under existing terms.
| # | Condition in Letter 26-29 | Who it protects |
|---|---|---|
| 1 | Amend only contracts on broad-based security indices | Everyone outside the index category |
| 2 | Ask open-position holders about adverse impacts | Holders |
| 3 | At least five calendar days of notice | Holders |
| 4 | Chance to close out under the old terms | Holders who dislike the change |
| 5 | Appropriate risk disclosures | Holders |
| 6 | Change no other material term besides the expiry | Holders |
| 7 | File under Regulation 40.6(a) or 40.5 | Regulatory record |
| 8 | Notify the Division and certify compliance | Regulatory record |
Footnote 27 says the Division expects customers of an intermediary, such as a broker, to count as “market participants” under conditions 2 through 5. A retail trader holding through a broker is covered.
What should open-position holders do?
A trader with an open position in one of these index contracts should read the exchange’s notice as soon as it arrives, decide whether the position still fits without an expiry, and close it before the stated change date if it does not.
- Find the notice. The five-day minimum means the clock starts when the exchange tells you, not when the CFTC letter was published.
- Decide on the new risk. Without an expiry, a position never converges to a settlement price. The funding rate does that work.
- Use the close-out window. Condition 4 guarantees it. Use it if you only wanted a dated contract.
Here’s what people tend to overlook. The letter’s own background says the change can move prices on its own, so the days around the switch may be noisy for reasons unrelated to the index.
Does removing the expiry change funding?
Removing the expiration date does not change the funding mechanism, because the letter says the Existing Perpetual-Style Contracts already rely on a periodic funding rate to keep price near the underlying, identical to the approved perpetual.
The same footnote adds a caution. Pricing of the older contracts “may deviate due to various factors,” even with identical mechanics. I’d read that as a reminder that two index perps tracking the same index can still trade a few points apart.
Funding is the bill you pay for that closeness. If you hold a long when the perp trades above its index, you generally pay. It adds up over weeks.
Where the Relief Stops
Three limits are easy to miss. The letter is staff-level, so it does not bind the Commission. It rests on the facts Coinbase presented, and the letter says changed facts “might render the positions taken in this letter void.” And it expires on October 20, 2026.
So the no-action cover for any new conversion filed after today is not something this letter provides. Whether staff extend it is not something I could find confirmed.
Tips
- Read your exchange or broker notices for the words “expiration” and “amendment.”
- Note the date and time the close-out window ends. Write it down.
- Compare the perp’s price with its index before and after any switch.
- Keep margin buffer. Notice periods can come with wider spreads.
Warnings
- A staff letter is not a law and not a Commission order.
- Leverage on a product without an expiry still liquidates. Funding costs accumulate.
- Secondary summaries of the letter contain details the letter does not state. Read the primary text.
- This is not investment advice.
FAQ
What does CFTC Letter 26-29 allow exchanges to do?
It says CFTC staff will not recommend enforcement if a designated contract market removes expiration dates from existing broad-based security index perpetual-style futures with immediate effect, provided eight conditions are met.
How much notice must holders get before the expiry is removed?
Condition 3 of the letter requires at least five calendar days of notice to market participants with open positions, and condition 4 requires a chance to close out under the existing terms.
Does the letter cover crypto perpetual-style futures?
No. The letter applies only to perpetual-style futures that reference broad-based security indices, and its footnote 25 says the positions do not apply to contracts that reference other assets.
Sources
- CFTC: Staff Letter No. 26-29, No-Action Positions Regarding Removal of Expiration Dates (October 3, 2026)
- Buildix: True perpetual futures and CFTC Letter 26-29
- U.S. Commodity Futures Trading Commission
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Fact-checked against CFTC Letter No. 26-29 (October 3, 2026). Not investment advice.
