ESMA Perpetual Futures Classification Sparks Controversy in EU
The classification of perpetual futures as contracts for difference (CFD) has significant implications for retail clients in the EU. According to ESMA, perpetual futures are likely to fall under the CFD measures, which would impose a leverage cap of 2:1 on retail clients.
The Hyperliquid Policy Center (HPC) has filed a submission with the European Commission, arguing that perpetual futures should be classified differently. The HPC claims that the existing framework for CFDs does not apply to perpetual futures because they carry different structures and risks.
ESMA's notice in February 2026 stated that the fact that a contract is marketed as a 'perpetual' says nothing about its legal classification. The authority emphasized that firms must evaluate these products under MiFID II and investor protection rules, which would restrict or prohibit their distribution to particular client groups.