Writing the software is not the same as being the broker

CFTC Broadens No-Action Relief for Passive Software Providers

The U.S. Commodity Futures Trading Commission's (@CFTC) Market Participants Division (MPD) has issued a sweeping no-action position that draws a clear regulatory line between building trading software and acting as a financial intermediary. Under the position, division staff will not recommend enforcement action against qualifying passive software providers, or their relevant personnel, for failing to register as an introducing broker or associated person of an introducing broker.

The relief, set out in CFTC Staff Letter 26-25, applies to the provision and marketing of software that connects users to registered futures commission merchants, introducing brokers, and designated contract markets. It builds directly on a narrower position the division granted to Phantom Technologies in March 2026, which was described at the time as the first of its kind for a self-custodial crypto wallet provider. That earlier letter, issued on March 17, applied solely to Phantom. After the agency received inquiries from other similarly situated providers, MPD extended substantially the same terms to the broader category of eligible firms.

What Qualifies, and What Does Not

The conditions attached to the relief are specific. To qualify, software must remain genuinely passive. It cannot route orders with any element of discretion, generate express buy or sell signals, or hold or control user assets at any point. Users must remain direct customers or members of the registered entity handling their transactions, not customers of the software provider itself. All trades must run through CFTC-registered venues.

Providers seeking to rely on the position must file a notice with MPD, agree to satisfy every stated condition, and consent to the CFTC's jurisdiction to investigate and pursue enforcement over any violations connected to their covered activities.

The position is not permanent. It remains in effect only until the Commission issues its own rule or guidance addressing how introducing-broker registration requirements apply to software developers. A future rulemaking could replace the staff position with a binding framework or impose a different standard entirely. The division also retains the right to modify, suspend, or withdraw the position at any time.

For now, the letter gives qualifying software providers a workable path to facilitate access to regulated derivatives markets without taking on the compliance burden of broker registration, provided they stay strictly within the defined boundaries.

Sources:
CFTC Press Release 9197-26: No-Action Position for Phantom Technologies (March 2026)
Securities.io: CFTC Staff Opens IB Registration Relief to Passive Software Providers
Crypto Times: CFTC Expands No-Action Relief to Crypto Trading Software Providers