Ondo Calls for Onshore US Stock Perpetuals Regulation

Ondo, a financial technology firm, has urged US regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), to facilitate the onshore trading of perpetual futures tied to individual stocks. The company argues that current US securities laws are sufficient to regulate these derivatives, which are currently traded offshore or in less regulated environments.

Perpetual futures are a type of derivative that allows traders to speculate on the price movements of underlying assets, such as stocks, without an expiration date. As the demand for crypto and stock derivatives grows, regulators are exploring ways to bring more of this activity within the US regulatory framework.

Ondo's proposal suggests that existing securities laws can be adapted to oversee perpetual futures linked to stocks, potentially increasing transparency and investor protection. The firm emphasizes that onshoring these derivatives could also help prevent market manipulation and improve market integrity.

The call for regulation comes amid ongoing discussions about the expansion of derivatives markets and the need for clear regulatory guidance. While the SEC and CFTC have yet to formally respond, the proposal highlights the industry's interest in a more regulated and accessible derivatives environment within the United States.