Regulatory Roundup #19

Summary

The week the CFTC gave perpetual contracts their first US regulatory home, the European Commission opened a consultation asking whether its two-year-old crypto framework already needs amending. Three CFTC releases and a related 24/7 trading advisory on May 29 established a domestic approval route for bitcoin perpetuals via Regulation 40.3, a case-by-case review path for other perpetuals, and a conditional pathway for US FCMs to access offshore perps markets. The European Commission, with some understatement, noted that no asset-referenced tokens have been authorized under MiCA in nearly two years and asked whether the interest prohibition was the right call. Elsewhere: South Africa ruled crypto assets outside its national payments framework, removing a license-stacking risk for CASP operators; India’s SEBI approved a tokenized corporate bond pilot with the RBI; South Korea deferred its Digital Asset Basic Act past June elections, and stablecoin provisions are still deadlocked between the FSC and the Bank of Korea.

🔦 Spotlight

🇺🇸 The CFTC opens the perpetuals door

Until 29 May 2026, the United States had no clear CFTC-approved domestic pathway for true perpetual contracts. The Commission and its staff have now sketched one across four related releases.

Of these, the order approving KalshiEX LLC’s BTCPERP futures contract attracted the most attention. KalshiEX submitted the contract on 28 May under CEA section 5c(c)(4) and Commission Regulation 40.3; the Commission approved it the following day. KalshiEX is now the first CFTC-registered DCM to list a true perpetual: a contract with no fixed expiry, using a funding-rate mechanism to keep its price aligned with the underlying spot market.

That approval comes with deliberately defined limits. The policy statement issued the same day says that perpetuals referencing asset classes not contemplated in the order should be submitted for Commission review and approval under Regulation 40.3. Products outside the order’s digital-commodity fact pattern go into case-by-case review.

Less noticed, and arguably as significant in practice, was Letter 26-17. The Market Participants Division issued both an interpretation and a no-action position to Coinbase Financial Markets, Inc. The interpretative portion confirms that the Deribit perpetuals described in the request may be categorized as “foreign futures” under Commission Regulation 30.1. The no-action portion addresses CFM’s ability to post customer-owned digital commodities and payment stablecoins with its foreign broker affiliate, Coinbase Bermuda Limited, for margining foreign futures and options positions on Deribit, subject to a detailed set of conditions.

None of this amounts to a standing permission for US FCMs to access offshore perpetuals venues. The letter is tied to a specific factual record: a Coinbase-affiliated chain, a VARA-regulated venue, digital commodities with deep, active and continuous spot markets, prescribed customer disclosures, Part 30.7 treatment, right-of-re-use limits, information-security controls, audited financials and SOX/public-company oversight. A materially different arrangement would need its own analysis before anyone could assume equivalent treatment.

Coming at the same problem from a different angle, Advisory 26-16 reminds DCMs, SEFs, DCOs and FCMs of the CEA and regulatory considerations that arise when moving to 24/7 trading or clearing. Issued by the Divisions of Clearing and Risk, Market Oversight, and Market Participants, it draws a deliberate asset-class distinction: crypto-asset derivatives may be well suited to 24/7 trading given their digital infrastructure and global reach, while agricultural derivatives, with their regional customer bases and specialized hedging practices, may be less so. The advisory does not authorise extended hours or create no-action relief; it maps the framework within which staff will review extended-hours proposals.

The four releases address a problem the CFTC has been moving towards over the past year: how to bring perpetual markets that developed offshore and outside the US regulatory perimeter into a framework built for different instruments and different trading hours. The policy statement answers with case-by-case product review. The 24/7 advisory says infrastructure can follow, but only within defined operational, risk-management and market-surveillance limits. Letter 26-17 says offshore access can work, but only under a tightly specified FCM-intermediated structure.

For institutions, that specificity is the point. Any existing or planned access to offshore perpetuals venues needs to be mapped against the Letter 26-17 conditions rather than assumed to inherit them: the Coinbase/Deribit structure is particular enough that a superficially similar arrangement, with a different counterparty, custodial chain, or venue regulator, may not qualify for the same treatment. Although Regulation 40.3 remains voluntary as a matter of rule text, the policy statement makes it the practical route for perpetuals outside the Kalshi fact pattern. Nonetheless, the Commission has set a direction of travel.

🌎 Global Developments

🇺🇸 United States

💡 SEC delays innovation exemption for tokenized securities

After Nasdaq, NYSE and Cboe raised market-structure and surveillance concerns, the SEC reportedly pulled back its planned May rollout of an innovation exemption for tokenized securities. The sticking point was a draft provision that would have permitted third-party tokens: digital representations of shares issued by intermediaries without the underlying company’s involvement. Fragmentation risk, specifically the possibility of the same equity being tokenized and traded across multiple on-chain venues without issuer oversight, was the exchanges’ central objection.

The dispute tracks a distinction already visible in SEC staff commentary: tokenized securities may be issuer-sponsored, custodial or synthetic, but the legal treatment turns on the rights conveyed by the token and whether it represents ownership of the underlying security or merely economic exposure. Any exemption will apply only to genuine tokenized versions of publicly traded securities.

Some market participants had product roadmaps based on an exemption in 2026; those launches are now reportedly pushed to 2027. No revised timeline has been published.

Beyond immediate product plans, the synthetic/custodial line will matter in other product structures too. It answers a question left open in earlier SEC staff statements: the regulatory character of a token turns on whether it conveys actual ownership of the underlying security, not merely price exposure. How that principle applies to products offered to non-US persons, or to instruments structured under foreign law, is analysis that product and legal teams will need to complete regardless of when the exemption arrives.

🔐  SEC staff grants HQLax 36-month no-action pathway

On 4 May 2026, the SEC’s Division of Trading and Markets granted HQLax S.à r.l. and Clearstream International S.A. a 36-month no-action letter allowing them to admit US persons to their DLT-based securities lending and repo settlement platform without clearing agency registration under Section 17A(b)(1) of the Securities Exchange Act. Both entities are Luxembourg-incorporated and supervised by the CSSF.

Built on R3’s Corda Enterprise, a private permissioned distributed ledger, the platform settles securities lending and repo transactions across fragmented custodial infrastructure. Participants transfer securities to Clearstream International, which holds them in custody; a corresponding Digital Collateral Record, represented as a token on the ledger, is created and linked to those securities. DCR transfers move the underlying securities between Clearstream custody accounts; when securities leave the platform, the DCR is burned. The DCR is explicitly characterized as a ledger entry, not an independently tradable instrument or crypto asset.

Eligibility is confined to registered broker-dealers with $100 million or more in excess net capital and banks with $10 billion or more in total assets, with a cap of 15 US Participants. Daily volume limits are set at less than $25 billion in average daily value and fewer than 100,000 transactions. HQLax must seek a permanent conditional exemption during the no-action period and will report to SEC staff quarterly.

Among the platform’s backers are JP Morgan, Citi, BNY Mellon, Goldman Sachs, HSBC, ING, BNP Paribas and Deutsche Börse; it has been live in European markets since 2019. For US securities finance desks, the letter opens access to infrastructure that counterparts have been using for six years. Whether existing repo and sec-lending programmes meet the Eligible Securities and counterparty criteria is the immediate compliance question.

🇪🇺 European Union

📝 European Commission opens MiCA review consultation

On 20 May 2026, the European Commission launched a targeted consultation asking whether MiCA remains fit for purpose, with responses due 31 August. Articles 140 and 142 of MiCA require the Commission to produce a review report that may, if warranted, be accompanied by a legislative proposal.

Of the questions it raises, several go directly to whether the existing framework is commercially workable. On stablecoins, the Commission asks whether the prohibition on granting interest on e-money tokens (EMT) and asset-referenced tokens (ART) should be modified, and whether MiCA should introduce an equivalence regime for global stablecoins. On CASPs, it asks whether prudential requirements should be recalibrated, for example by alignment with the K-factor regime applicable to investment firms under the Investment Firms Regulation. On scope, it invites views on how DeFi, staking, lending and tokenized assets should be treated.

Two years without a single ART authorization under MiCA is the elephant in the room behind the stablecoin question. Under MiCA, ARTs cover stable-value tokens referencing baskets or other assets. Single-currency stablecoins, whether euro- or non-euro-denominated, are generally treated as EMTs. The interest prohibition and capital requirements appear to have made ARTs commercially unviable in the EU. Whether the review produces a formal amendment or simply documents the gap, the ART fiasco is now receiving direct attention.

Aimed at a professional audience, including CASP operators, issuers, financial institutions, supervisors, central banks and finance ministries, the consultation also runs a parallel public track. Comments, feedback (and general venting) due by 31 August.

🌏 Asia-Pacific

🇰🇷 South Korea

🗳️ DABA negotiations deferred past June elections

South Korea’s National Assembly left the Digital Asset Basic Act off the National Policy Committee’s agenda at its final subcommittee meeting before parliamentary recess on 12 May. Substantive DABA negotiations will not begin before the June 3 local elections, with resumed debate unlikely before the second half of 2026 and implementation likely to be pushed into 2027.

Behind the procedural pause sits a live substantive dispute. The FSC and the Bank of Korea remain at odds over stablecoin issuance: the BoK has insisted that only banks holding majority 51% stakes in KRW-pegged stablecoins should be permitted to issue them, a position the FSC regards as overly restrictive. Until that question is resolved, the bill’s stablecoin provisions cannot be finalized. Elsewhere in the DABA framework, including formal recognition of corporate crypto investment and the exchange licensing regime, cross-party support remains intact. The delay is procedural and political, so ultimately we should see progress.

For institutions with Korean entities or client exposure, the position is unchanged: treat DABA as a staged development, and monitor the stablecoin framework as a trailing indicator of legislative progress rather than a leading one.

🇮🇳 India

🏦 SEBI announces tokenized corporate bond pilot

On 26 May 2026, SEBI Chairman Tuhin Kanta Pandey announced at the CareEdge Debt Market Summit in Mumbai that SEBI has approved a pilot for the tokenization of corporate bonds using distributed ledger technology. Jointly overseen by SEBI and the Reserve Bank of India, the pilot will run on a permissioned basis and is expected to take six to nine months to implement.

Shorter settlement cycles, improved transaction traceability, automated debt servicing and enhanced transparency are the four objectives SEBI has set. The pilot will run inside a regulator-backed permissioned environment, not on public blockchain infrastructure.

More notably, Chairman Pandey flagged quantum computing as a risk consideration, noting that regulators need to examine whether advances in quantum systems could eventually affect the cryptographic security underlying DLT platforms. The observation is rare at this stage of a pilot announcement and suggests SEBI is approaching the technology with more technical caution than is typical in emerging-market digital assets commentary.

🌏 Africa

🇿🇦 South Africa

🏛️ SARB and FSCA rule crypto assets outside the payments framework

In late May, the South African Reserve Bank and the Financial Sector Conduct Authority issued a joint communication clarifying the regulatory status of crypto assets used for domestic payment purposes. The position is unambiguous: crypto assets, including stablecoins, fall outside the National Payment System Act, are neither “money” nor “funds” for NPS purposes, and do not require a separate payments license. The scope is limited to domestic payments; cross-border use is not addressed.

In practice, the communication removes a license-stacking risk that had created operational uncertainty for service providers. Whether a payments license was required in addition to a CASP authorization had not been definitively settled; firms now have clarity.

On stablecoins specifically, the SARB indicated interest in testing domestic stablecoin payment use cases through its regulatory sandbox, while making clear that foreign-currency-pegged instruments raise currency substitution and monetary policy transmission risks. The sandbox signal applies to rand-anchored instruments; it does not open the door to dollar-denominated stablecoins in the domestic payments system.

South Africa was among the first African jurisdictions to establish a formal CASP registration regime, which came into effect in 2023. The joint communication follows that same approach: clarify incrementally, avoid primary legislation where guidance will do. Whether the SARB sandbox eventually produces a domestic stablecoin framework, and on what terms, is worth tracking.

👀 Things to Watch

• 🇺🇸 CLARITY Act: cleared Senate Banking Committee 15-9 on May 14. Floor vote requires 60 votes; White House targeting July 4. August recess is the risk horizon if the vote slips.
• 🇺🇸 SEC innovation exemption for tokenized securities: delayed after Nasdaq, NYSE and Cboe pushed back on synthetic token provisions.
• 🇺🇸 GENIUS Act AML/CFT NPRM: comment deadline June 9. SAR scope, sanctions screening standard, and the primary/secondary market distinction are the provisions most likely to be shaped by practitioner letters.
• 🇺🇸 SEC Reg Crypto: OIRA review underway; publication awaited.
• 🇬🇧 FCA CP26/13: consultation closed 3 June 2026. Final perimeter guidance due by September, ahead of the authorization gateway opening 30 September.
• 🇦🇺 ASIC INFO 225 no-action harbor expires June 2026. Platforms relying on INFO 225 relief that have not begun assessing their AFSL licensing pathway are running out of time.
• 🇪🇺 MiCA: transitional periods expire 1 July 2026 EU-wide. Any CASP without a license after that date is in breach of EU law.
• 🇵🇱 Poland: MiCA transposition bill passed the Sejm 241-200 on May 15. Presidential signature still required ahead of the July 1 deadline.
• 🇺🇸 California DFAL: application deadline for operating firms 1 July 2026.
• 🇯🇵 Japan FIEA bill: Diet consideration continues following Cabinet approval on April 10. Current ordinary Diet session runs to mid-July.

Coming into view:

• 🇺🇸 DTCC tokenization service: limited production trades July 2026, full launch October 2026.
• 🇬🇧 FCA: policy statements on substantive crypto rules due summer 2026, ahead of the October 2027 regime go-live.
• 🇪🇺 EU Commission MiCA review: targeted consultation closes 31 August 2026. If the review report recommends amendments, a legislative proposal could follow in 2027.
• 🇪🇺 EU Market Integration and Supervision Package (MISP): multi-month legislative negotiations continuing.
• 🇰🇷 South Korea: DABA negotiations deferred past June 3 elections; resumed debate unlikely before H2 2026. Stablecoin provisions remain deadlocked between the FSC and the Bank of Korea.
• 🇸🇬 MAS: prudential consultation on permissionless blockchain exposures closed May 18; response document pending.

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