CFTC staff extend no-action position on introducing broker registration to all passive software providers

What happened

The Market Participants Division (MPD) of the Commodity Futures Trading Commission issued CFTC Staff Letter 26-25 on 17 Sep 2026. The letter gives a no-action position to all providers of passive software (PSPs) on substantially the same terms as Staff Letter 26-09.

MPD issued Letter 26-09 on 17 Mar 2026 to Phantom Technologies, Inc., a developer of software that passively enables trading in CFTC-regulated derivatives, including through self-custodial crypto asset wallet software. Under CFTC rules, only the beneficiary of a no-action letter may rely on it, so no other provider could use Letter 26-09.

The position is available now. It is a staff no-action position that binds only MPD, not the Commission.

What changed

MPD will not recommend enforcement against a PSP for failing to register as an introducing broker (IB), or against its personnel for failing to register as associated persons of an IB, solely for the Covered Activities.

The letter limits the Covered Activities to a closed list. A PSP distributes passive front-end software through which users send their own orders directly to a designated contract market (DCM) or to registered futures commission merchants (FCMs) or IBs, including for event contracts and perpetual contracts. The PSP may market its services and solicit users to engage with specific registrants, provided users can still reach those registrants directly. Registrants may share a specified portion of their relevant revenues with the PSP, and the PSP may charge users a transaction-based fee. The PSP may embed the interface in its own existing wallet software, provided the interface clearly and conspicuously distinguishes CFTC-regulated activity. At no point may the PSP hold, control or take custody of user assets, generate express buy or sell signals, or exercise discretion over routing or execution.

The position carries 10 conditions, including conflict-of-interest disclosures that each user acknowledges, a risk disclosure statement unless a registered registrant must already provide one, marketing rules applied as if the PSP were a registered IB, and a notice to MPD consenting to CFTC jurisdiction.

Who is affected

Crypto wallet developers and other providers of passive front-end trading software. The letter says PSPs are not limited to providers of crypto asset related software.

DCMs, FCMs and IBs that work with PSPs. To rely on the letter, a PSP and each registrant it works with must sign a written undertaking. Under it, both are jointly and severally liable for violations of the Commodity Exchange Act or CFTC regulations by the PSP or its personnel in the Covered Activities with or on behalf of that registrant.

What happens next

The position lasts until a Commission rulemaking or guidance on how IB registration applies to software developers takes effect. The letter sets no date for that. Each PSP files its notice and each liability undertaking with MPD. MPD may modify, suspend or terminate the position at its discretion.