Comment Text:
R Tamara de Silva, Founding Attorney
110 N. Wacker Drive, Suite 2500
Chicago, IL 60606
[email protected]
(312) 810-8100
WWW.DESILVALAWOFFICES.COM
May 20, 2025
Via Electronic Submission
Christopher J. Kirkpatrick, Secretary
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street NW
Washington, DC 20581
Re: Comments on Request for Comment on Trading and Clearing Derivatives on a 24/7 Basis
Dear Mr. Kirkpatrick,
I appreciate the opportunity to comment briefly on the CFTC’s consideration of the trading and clearing of derivatives on a continuous or 24/7 basis. As a lawyer with longstanding experience in futures markets, and previously as a floor trader, I recall firsthand when the CME first launched Globex, facilitating the migration of trading from the exchange floors to electronic screens. At that time, skeptics questioned the feasibility and prudence of electronic markets and after hours trading. However, electronic trading became the new standard, revolutionizing the futures markets and improving liquidity, accessibility, and market efficiency.
Today, the idea of extending derivatives trading to a nearly continuous, 24/6 or even 24/7 model merits serious consideration. CME Globex already operates nearly continuously from Sunday evening to Friday afternoon, with only short daily breaks for system maintenance. Certain products, notably cryptocurrency derivatives such as Bitcoin and Ethereum futures, already trade during these extended hours. The global cryptocurrency markets themselves trade on a truly continuous basis, which demonstrates an inherent market demand for uninterrupted access to trading.
The broader market landscape has irrevocably changed. And the pace of change continues with online platforms increasingly offering close to continuous trading. Online trading platforms and fintech companies functioning as exchanges recognize that the financial markets are now global, interconnected, and perpetually active. This continuous trading environment reflects current market realities and increasingly global investor expectations. Trading nearly continuously could improve market access, price discovery, and responsiveness to global events.
That said, valid concerns regarding liquidity, operational resilience, and potential market manipulation in thinly traded periods must be addressed. A carefully managed 24/6 approach might appropriately balance these concerns. 24/6 trading would preserve regular windows for maintenance, updates, and system checks while providing near-constant market access. Additionally, clearly defined margining rules, liquidity safeguards, robust risk disclosures, along with effective market surveillance practices would be essential components of a responsibly implemented near-continuous trading framework.
In parallel with trading innovation, the Commission should also consider developments in settlement infrastructure. Technological innovation, especially blockchain-based solutions, may soon significantly improve back-office operations including clearing and settlement processes. Blockchain technology could introduce greater transparency, operational efficiency, real-time risk management, and reduced counterparty risk into the clearing ecosystem. The integration of blockchain into derivatives market infrastructure could substantially mitigate operational risks, streamline back-office procedures, and complement a continuous trading environment. This has been one of the most obvious and frequently discussed implementations of blockchain and distributed ledger technology for the past 7-8 years.
In conclusion, as the Commission evaluates continuous trading, it should draw on the experience of past market innovations like electronic trading and Globex. Globex and off-floor overnight trading was once controversial but now a cornerstone of the global financial markets.
The continued evolution of markets toward round-the-clock global trading reflects a fundamental shift in how modern markets operate. The eventual incorporation of blockchain-based settlement highlights the urgency and importance of proactively developing clear rules and robust frameworks for extended-hours derivatives trading. Doing so would further ensure U.S. leadership, investor protection, and market integrity. It will also significantly increase retail and foreign participation in the U.S. futures markets.
Respectfully submitted,
R. Tamara de Silva
Founding Attorney
De Silva Law Offices, LLC
Counsel on behalf of our clients in the traditional futures and digital asset sectors
cc. The Hon. Caroline D. Pham, Acting Chairman
The Hon. Kristin N. Johnson
The Hon. Christy Goldsmith Romero
The Hon. Summer K. Mersinger
