In a collaborative effort to modernize financial market regulations, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly released a statement signaling a potential shift towards 24/7 capital markets. This move aims to align the U.S. markets with the evolving realities of a global, always-on economy, especially considering the continuous trading activity in foreign exchange, gold, and crypto assets.

The statement underscores the increasing convergence of securities and non-securities markets, emphasizing the need for harmonization between the SEC and CFTC regulatory frameworks to foster innovation. The agencies recognize that regulatory uncertainty and a lack of coordination could hinder productive economic activity. To address this, they are committed to recalibrating their approach towards regulatory cooperation.

One of the key areas of focus is the possibility of expanding trading hours to create 24/7 markets. While acknowledging that a one-size-fits-all approach may not be suitable for all asset classes, the regulators believe that extending trading hours could enhance capital velocity and better integrate U.S. markets into the global financial landscape. However, they also recognize the potential risks, such as increased exposure for traders holding overnight and long-term positions.

In addition to exploring 24/7 markets, the SEC and CFTC are also examining regulations for crypto derivatives, prediction markets, and decentralized finance (DeFi). They aim to provide clarity for event contracts and perpetual futures, which are futures contracts without an expiry date. The agencies are prepared to consider "innovation exemptions" to create safe harbors or exemptions that allow market participants to engage in peer-to-peer trading of spot, leveraged, margined, or other transactions in spot crypto assets, including derivatives such as perpetual contracts, over DeFi protocols.

To further these efforts, the SEC and CFTC will hold a joint roundtable on regulatory harmonization on September 29, 2025. This roundtable will serve as a platform to discuss various topics, including harmonizing product and venue definitions, streamlining reporting and data standards, aligning capital and margin frameworks, and establishing coordinated innovation initiatives. One particularly interesting proposal would allow collateral to be offset across spot and derivatives exchanges, essentially across different product classes which could reduce hedging costs and free up balance sheet capacity.

The regulators' focus extends to creating a regulatory environment that allows American businesses to flourish, innovate, and lead in global markets. By working together, the SEC and CFTC aim to unlock new opportunities for market participants, foster innovation, and solidify the United States as a global leader in crypto and blockchain technology. This includes addressing the issue of novel products being driven overseas due to fragmented oversight and legal uncertainty. Ultimately, the goal is to establish fit-for-purpose regulations for innovative products and trading platforms, balancing competitiveness with investor protection.