SEC and CFTC Seek Comment on Harmonizing Portfolio Margin

The Securities and Exchange Commission and the Commodity Futures Trading Commission launched a joint public consultation asking for comments on harmonizing portfolio margin rules across securities and derivatives markets. The agencies opened a 60-day comment period that begins when the request is published in the Federal Register.

Regulators requested input from market participants, clearing firms and exchanges on expanding cross-margining, collateral eligibility and treatment, risk management standards and customer protections. The agencies asked respondents to assess potential effects on market liquidity, competition and investor safeguards.

Cross-margining treats offsetting positions across different products or markets together when calculating margin requirements, allowing firms to post collateral based on the risk of a portfolio rather than on each position separately. SEC Chair Paul Atkins described cross-margining as “a clear opportunity to unlock liquidity that remains frozen in separate accounts,” and said aligning the agencies’ frameworks could reduce jurisdictional overlap that limits innovation and market efficiency.

The SEC oversees securities and security-based swaps. The CFTC regulates futures, swaps and other commodity derivatives. As exchanges and brokerages offer products that fall under both agencies’ jurisdictions, the review is intended to identify where rules and operations could be better coordinated.

The consultation follows recent regulatory actions that expanded crypto derivatives access. On May 29, the CFTC approved Bitcoin perpetual futures for prediction market platform Kalshi and cleared Coinbase Financial Markets to provide eligible U.S. institutional clients access to certain Deribit-listed crypto options and perpetual futures; Coinbase began offering that access the same day. A few weeks later, Kraken began offering CFTC-regulated perpetual futures for eligible U.S. users through its acquisition of the Bitnomial platform.

CFTC Chair Mike Selig warned cryptocurrency perpetual futures are not a “natural fit” for traditional commodity markets such as agriculture, highlighting questions about how new products fit within existing frameworks.

The agencies said the request covers technical and policy topics, and they invited detailed comments on operational and legal challenges to cross-margining, how harmonization could affect fragmentation across markets, and ways to preserve appropriate safeguards while addressing competitive and liquidity concerns.