CFTC Extends No-Action Relief for Introducing Broker Registration to All Providers of Passive Software
IN SHORT
The Situation: On September 17, 2026, the Commodity Futures Trading Commission ("CFTC" or the "Commission") issued a staff letter that allows software developers and other technology providers to distribute software applications that facilitate customer access to CFTC-regulated derivatives, such as event contracts and perpetual futures, without having to register with the Commission.
The Result: Technology vendors who satisfy necessary conditions will be permitted to develop, among other things, user interface software and non-custodial digital asset wallets that connect customers to CFTC-regulated derivatives markets without registering with the Commission.
Looking Ahead: Technology vendors wishing to take advantage of this relief must confirm that their product satisfies all applicable conditions and file required notices with the CFTC.
The CFTC's Market Participants Division ("MPD") has issued CFTC Staff Letter No. 26-25 (or "The Letter") (September 17, 2026), extending to all Passive Software Providers ("PSP") and the developer's relevant personnel, the no-action relief previously available only to Phantom Technologies, Inc., under Staff Letter 26-09 (March 17, 2026). The letter establishes a process through which software developers and other technology providers and their relevant staff may distribute software applications that passively enable customers to transact in CFTC-regulated products without being required to register with the CFTC as introducing brokers ("IBs") or associated persons ("APs").
Under the Commodity Exchange Act ("CEA"), an IB is any person who, for compensation or profit, engages in "soliciting or accepting" orders for the purchase or sale of any commodity for future delivery. 7 U.S.C. § 1a(31); 17 C.F.R. § 1.3. The CEA makes it unlawful for any person to act as an IB without registering with the CFTC. 7 U.S.C. § 6d(g). It also requires individuals who have certain sales and supervisory roles in IBs to register as APs. 7 U.S.C. § 6k(1), 17 C.F.R. § 3.12(a).
The Commission's historically broad interpretation of the phrase "soliciting or accepting" raised concerns among technology service vendors that the act of developing software connecting users to derivatives exchanges could trigger an obligation to register as an IB or AP. Specifically, the development of trading apps and front-end interfaces raised questions about IB registration obligations. So too did the development of non-custodial digital asset wallets that enabled users to trade CFTC-regulated derivatives. On March 17, 2026, the CFTC issued No Action Letter 26-09, which provided greater clarity on these questions but which applied only to the applicant, Phantom Technologies, Inc. On September 17, 2026, the CFTC issued a No Action Letter 26-25 extending the relief granted to Phantom Technologies, Inc., to the broader industry, as the Letter notes the relief is not limited to providers of crypto asset related software.
As a result of No Action Letter 26-25, PSPs who engage in enumerated "covered activities" will not be required to register with the CFTC if they satisfy 10 conditions. Those conditions include, in part, not being subject to statutory disqualifications; publication of risk disclosures; requirements that users be onboarded as members of CFTC-regulated markets or customers of certain intermediaries; limitations on marketing communications and advertising maintenance of records in accordance with statutorily accepted procedures; and requiring that the PSP and each of the registered entities it allows users to access agree to be jointly and severally liable for any violations of the CEA or the Commission regulations, and consent to CFTC enforcement jurisdiction.
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Under No Action Letter 26-25, a PSP that is not registered as an IB, may with some exceptions, engage in certain "covered activities" that passively enable users to transact in CFTC-regulated products without the CFTC's Market Participants Division recommending an enforcement action. These activities include distribution of front-end user interface software that enables users to review market data and to submit orders through certain registered entities to trade CFTC-regulated products, such as event contracts, perpetual futures, and other CFTC-regulated derivatives. Self-custodial digital asset wallets that facilitate the trading of CFTC-registered derivatives would also be covered under the listed conditions. The Letter stipulates that these "covered activities" are limited to circumstances in which a user is transacting on a CFTC-registered market either directly or through a CFTC-registered intermediary. Moreover, the relief does not apply where the PSP holds assets, generates express "buy" or "sell" signals, or exercises discretion with respect to the routing of orders. The relief outlined in No Action Letter 26-25 is not self-executing but instead requires that an applicant file notice with the Market Participants Division agreeing to satisfy the listed conditions. The Letter indicates that such notice may also require waiver of sovereign immunity, limited or otherwise, if necessary to make enforceable the PSP's consent to the Commission's jurisdiction. As with all no action letters, No Action Letter 26-25 binds only the issuing Division—MPD—not the Commission itself or the Division of Enforcement. By its terms, the Letter states in effect "only until the effective date of a Commission rulemaking or guidance addressing the application of the IB registration requirement to software developers."
Three Key Takeaways:
- Technology Vendors should examine whether services provided remain “passive” when allowing users to transmit orders to CFTC-regulated entities, such that the Technology Vendor has no affirmative involvement.
- Technology Vendors that intend to seek relief should continue to monitor the National Futures Association ("NFA") requirements listed in the enumerated conditions and maintain appropriate internal policies and procedures.
- Any Technology Vendor that intends to rely on relief must file a complete notice with the issuing Division establishing that the requisite conditions are met. Technology Vendors affiliated with a state or tribal government should also determine whether a waiver of sovereign immunity, limited or otherwise, is necessary to consent to the Commission's jurisdiction.
