The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have opened a joint public consultation on whether to better align portfolio margin rules across securities and derivatives markets, seeking feedback on approaches that could expand cross-margining and reduce market fragmentation.
The agencies are requesting input on cross-margining, collateral treatment, risk management, customer protections and the potential effects on market liquidity and competition. The public comment period will remain open for 60 days after the request is published in the Federal Register.
“Cross-margining offers a clear opportunity to unlock liquidity that remains frozen in separate accounts,” SEC Chair Paul Atkins said, adding that harmonizing the agencies’ frameworks could help prevent jurisdictional overlap from limiting innovation and market efficiency.
Cross-margining allows offsetting positions across different products or markets to be considered together when calculating margin requirements, rather than treating each position separately. By recognizing these offsets, companies can often post less collateral against hedged positions because margin is based on the portfolio’s overall risk rather than each position in isolation.
The SEC oversees securities and security-based swaps, while the CFTC regulates futures, swaps and commodity derivatives. As crypto exchanges and brokerages increasingly operate across both markets, the agencies’ joint review reflects the growing need for coordinated oversight.
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Crypto derivatives expand across regulated markets
The joint request for comment follows recent regulatory approvals that paved the way for a broader expansion of crypto derivatives offerings.
On May 29, the CFTC approved Bitcoin (BTC) perpetual futures for prediction market platform Kalshi and cleared Coinbase Financial Markets to offer eligible US institutional clients access to certain Deribit-listed crypto options and perpetual futures. Coinbase began offering that access the same day through its integration with Deribit.
A few weeks later, Kraken launched CFTC-regulated perpetual futures for eligible US users through its recently acquired Bitnomial platform, expanding its domestic derivatives offerings beyond CME-listed crypto futures.
Source: Kraken Pro
The expansion of crypto derivatives in the US has also raised broader questions about whether existing regulatory frameworks remain appropriate across different markets.
Earlier this week, CFTC Chair Mike Selig said cryptocurrency perpetual futures were not a “natural fit” for traditional commodity markets such as agriculture, highlighting the challenges regulators face in applying existing frameworks across increasingly diverse asset classes.
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