CFTC expands no action relief for passive trading software providers

The Commodity Futures Trading Commission has broadened no action relief for providers of passive trading software, allowing qualifying firms to facilitate access to regulated derivatives markets without registering as introducing brokers. The CFTC’s Market Participants Division said Thursday it will not recommend enforcement against eligible providers or their relevant personnel for failing to register as an introducing broker or associated person. The relief applies when software connects users with registered futures commission merchants, introducing brokers, and designated contract markets, subject to specified conditions. The move expands a framework first granted to Phantom Technologies in March under Staff Letter 26 09. Phantom received relief as it prepared to let users of its self custodial crypto wallet access CFTC regulated derivatives through registered firms and exchanges. Under that framework, the software had to remain passive. Phantom could not hold user assets, generate buy or sell signals, or exercise discretion over order routing or execution. Users instead transmitted orders directly to registered counterparties through the interface. The relief also required dis...