May 21, 2025 The Commodity Futures Trading Commission (“CFTC”) issued a Request for Comment to better understand the potential uses, benefits, and risks of trading on a 24/7 basis in the derivatives markets on April 21, 2025. Comments were due to the CFTC on or before May 21, 2025. Industry participants provided a great deal of feedback about the topic. Much of the feedback was submitted by the digital asset community which has been angling for sweeping new regulation over products such as Bitcoin, Ether, and XRP. A key distinction between crypto products and exchange cleared traditional futures and options is 24/7. Many believe the CFTC’s request is a potential foreshadow of the CFTC’s work to bring spot crypto assets under its purview. For those who may be interested submissions can be reviewed here. Comments submitted can be reviewed here for those who may be interested. Talk of the Industry Turnkey has been at the forefront of CFTC and NFA related compliance matters since we were founded in 2008. Trading on a 24/7 basis would impact risk management and supervision of regulated businesses quite substantially. Although 24/7 market access is something CFTC and NFA registrants are used to, having been largely in place within the spot foreign currency markets for years, the concept would be new for many traditional commodity markets. It appears others feel the same way in that a large number of significant financial services institutions submitted comments; CME Group, CBOE, Robinhood, NIBA, Bloomberg, FIA, ICE, Coinbase, Crypto.com, Nodal, MFA and countless others submitted their thoughts. Given Turnkey’s role in the industry we were most interested in what National Futures Association (“NFA”) had to say on the matter. Below please find a summary of NFA’s thoughts on the topic. Their comment letter was filed with the CFTC on May 21, 2025 and can be found in its entirety here. NFA Key Takeaways NFA’s comments, as is to be expected, focus on the necessity of regulatory adaptation to more completely consider 24/7 trading amongst other industry changes and innovation. Specifically, the CFTC’s Part 1 Regulations must evolve to ensure adequate customer protection and market oversight are re-evaluated in a 24/7 environment. NFA pointed out that the concept of a “business day” would have to be closely evaluated. At present the term in most regulatory frameworks means a day of the week excluding weekends and holidays. This would change in a 24/7 world creating significant challenges for compliance standards as currently structured. Particularly, risk and reporting periods are based on end of business day time frames and don’t readily consider weekend or holiday trading periods. NFA also pointed out that daily trade confirmations are not explicitly required to be provided on weekends. A change would be required both operationally and within various technology systems to accommodate this. Perhaps the most important consideration that NFA mentioned is how customer segregation computations would be managed. Customer segregated assets are the centerpiece of derivatives regulations. Holding customer money separate from house money is sacrosanct within the industry. Comingling of these funds or misreporting these funds is considered to be the “third rail” of compliance failures. NFA noted that required daily computations for segregated funds, secured amount funds, and cleared swaps customer collateral would need reconfiguration. Specifically, 24/7 trading would lead to a potential 3-day lag in demonstrating segregation compliance if weekend and holiday activity isn’t properly accounted for. This would also impact residual interest and net capital computation thresholds. If not properly accommodated for regulators would have limited capabilities to identify potential risk assessment and management issues. NFA also determined that 24/7 trading would likely require the CFTC to revisit Rule 1.11 related to FCM Risk Management programs. Requirements would need to be re-evaluated to address heightened credit, market, liquidity, technological, operational and any other risks associated with 24/7 trading. Customers would also need to be informed of these new risks. The NFA emphasized the need for updated risk disclosures, especially for retail customers, to clearly explain the unique risks of 24/7 trading. This includes the potential for positions to be negatively impacted or liquidated due to weekend market movements, even for customers not actively trading around the clock. Conceptually 24/7 risk could negatively impact novice traders, hedgers, or anyone else not possessing the acumen or capability to evaluate the market on a full-time basis. Conclusion It is only a matter of time that 24/7 trading is implemented. The comments provided by market participants, including the National Futures Association provide very thoughtful insights. Turnkey agrees with NFA’s view that regulation is heavily based on the concept of a “business day”. There are a wide range of potential implications if this long-standing industry tradition of reporting is done away with. Certainly, access to markets 24/7 has upsides as well. Turnkey is hopeful that the CFTC will take the time to fully consider market participant feedback and thoughtfully implement a robust regulatory framework with considers innovation as well as practicality moving forward.