CFTC Expands Regulatory Relief for Passive Trading Software

The US Commodity Futures Trading Commission (CFTC) has issued a no-action position that provides regulatory relief for passive trading software providers.

This move aims to accommodate blockchain and crypto apps that provide technical access to regulated derivatives venues, without requiring them to register as introducing brokers or associated persons.

The CFTC's new stance is based on the concept of 'passive software' that does not exercise discretion over trading decisions. To qualify for this relief, providers must meet specific conditions, including restrictions related to discretion over users' orders.

This development comes after the CFTC granted a similar no-action position in March to Phantom Technologies for its self-custodial crypto wallet software.