TLDR
- Hyperliquid Policy Center and trade[XYZ] asked the SEC to consider regulated pre-IPO perpetual markets nationwide.
- IPOP contracts offer price exposure before public listings without granting shares, voting rights or ownership.
- U.S. IPO prices cited were 10.8% to 38.4% below prior-day IPOP market prices in comparisons.
- The proposal seeks clear SEC and CFTC rules covering leverage, settlement, disclosures and market safeguards.
- A phased regulatory framework could eventually give U.S. retail investors access to pre-IPO perpetual contracts.
Hyperliquid Policy Center and trade[XYZ] have asked U.S. regulators to consider pre-IPO perpetual markets that could provide continuous pricing signals before companies begin public stock trading.
Hyperliquid Policy Center Proposes Pre-IPO Perpetuals
The Hyperliquid Policy Center and trade[XYZ] filed a joint comment letter with the U.S. Securities and Exchange Commission on August 18. The filing responds to the SEC’s request for ideas on modernizing the U.S. initial public offering process.
The groups proposed pre-IPO perpetual contracts, called IPOPs, as a possible price discovery tool before public listings. These cash-settled derivatives track the expected value of companies preparing to enter public markets.
Unlike private shares, IPOPs do not give traders ownership, voting rights, IPO allocations or claims against the referenced company. Instead, traders receive price exposure before the underlying shares begin public trading.
The contracts can also operate continuously rather than following traditional stock market hours. However, their prices represent market expectations and do not determine the final price selected by an issuer and its underwriters.
Filing Points to SpaceX and Cerebras Markets
The groups cited five completed IPOP markets operated by trade[XYZ] through Hyperliquid. Referenced companies included SpaceX, Cerebras, SK Hynix and ChangXin Memory Technologies.
For U.S. offerings included in the filing, IPO prices were between 10.8% and 38.4% below their respective IPOP prices from the previous day. The groups presented those differences as evidence that continuous derivatives markets could provide another measure of investor demand.
The letter argues that issuers and underwriters could use those prices alongside existing methods when assessing demand. However, an IPOP price would remain separate from an official IPO valuation and would not guarantee where shares eventually open.
Pre-IPO markets on Hyperliquid have recorded about $1.46 billion in cumulative trading volume. Open interest stood near $106 million in early June, while trade[XYZ] has accounted for much of the activity through its HIP-3 deployment.
Groups Seek SEC and CFTC Regulatory Clarity
The filing also asks the SEC and Commodity Futures Trading Commission to clarify how equity-linked perpetual contracts should be classified. That question affects which regulator oversees the products and what requirements apply to their operators.
Hyperliquid Policy Center and trade[XYZ] recommended rules covering contract terms, leverage, liquidation levels and settlement procedures. They also proposed eligibility standards for new markets and safeguards designed to address manipulation and other trading risks.
The groups further suggested a phased regulatory structure that could eventually provide access to U.S. retail investors. Their proposal would require regulatory conditions before such access becomes available.
The filing follows earlier engagement between the Hyperliquid Policy Center and U.S. regulators. The organization met with the SEC’s Crypto Task Force in July to discuss perpetual markets and their treatment under existing rules.
The SEC has not approved the proposed IPOP framework. The comment letter forms part of the regulatory consultation process, leaving any future rules or approvals subject to further review.
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