CFTC Staff Broadens No-Action Relief for Passive Trading Software Providers

On September 17, 2026, the Commodity Futures Trading Commission’s Market Participants Division announced it has issued a no-action position for the benefit of providers of passive software, making relief that was previously granted to a single crypto wallet developer broadly available to similar firms, according to Release 9300-26.

Under the position, and subject to certain specified conditions, the division will not recommend that the Commission take enforcement action against a passive software provider — or its relevant personnel — for failure to register as an introducing broker (IB) or as an associated person of an IB. The relief applies solely to the provision and marketing of software that facilitates users’ trading with registered futures commission merchants, introducing brokers, and designated contract markets, the release states.

What the September position covers

The division described the new position as similar to the one set out in Staff Letter 26-09, issued six months earlier, and said it is now broadly available to providers of passive software. The September release does not publish a new enumerated list of conditions; it states only that the relief is subject to “certain specified conditions.” The precise terms applicable to any given provider would be governed by the letter itself.

A no-action position is a staff-level enforcement posture, not a Commission approval, rule, or exemption. It means the issuing division will not recommend an enforcement action; it does not bind the Commission or other divisions, and it can be revisited.

The Phantom letter that preceded it

Letter 26-09, dated March 17, 2026, was issued in response to a request from Phantom Technologies Inc., a developer of self-custodial crypto asset wallet software, according to the letter itself and the accompanying Release 9197-26. Phantom’s software, offered as a mobile application or browser extension, lets users generate and manage cryptographic credentials for self-directed crypto asset transactions; the company does not custody user assets.

Phantom proposed to expand its wallet offering so users could trade Commission-regulated derivatives — expressly including event contracts and perpetual contracts — through front-end interface software connecting them to registered collaborators: designated contract markets, futures commission merchants, or introducing brokers. Users would transmit orders directly to those collaborators, and funds securing derivatives positions would remain in custody with a derivatives clearing organization or an FCM, consistent with the existing custodial market structure for exchange-traded derivatives.

Under the proposal, Phantom could charge users a transaction-based fee directly or share in collaborator revenues, and its personnel could market the software and introduce users to specific collaborators — though users would retain the ability to access those collaborators independently.

Why registration was at issue

Section 4d(g) of the Commodity Exchange Act makes it unlawful to act as an introducing broker without registering with the Commission, and Section 4k imposes a parallel registration requirement on associated persons of IBs. The statute and Commission regulations define an IB as any person who, for compensation or profit, solicits or accepts orders for futures and related products. As Letter 26-09 recounts, the Commission has long construed “soliciting or accepting” orders broadly, reaching well beyond literal order-taking.

Years earlier, a predecessor division had issued a series of interpretive letters to certain technology service vendors — the “TSV letters” — concluding those vendors were not IBs. Those letters relied on narrow representations: users had pre-existing relationships with an FCM or IB independent of the vendor; the vendor would not recommend any particular FCM or IB; its platform generated no express buy or sell signals; and it did not solicit or accept orders. Phantom’s proposal went beyond those limits — for example, the user and collaborator need not have a pre-existing relationship — so it could not rely on the TSV letters and sought no-action relief instead.

Conditions in the Phantom letter

The division granted Phantom’s request subject to ten conditions set out in Letter 26-09. Among them: Phantom must not hold, control, or take custody of user assets, must not generate buy or sell signals, and must not exercise discretion over the routing or execution of user orders. The company must provide, and obtain user acknowledgement of, disclosures about its collaborator relationships and potential conflicts of interest, plus a risk disclosure statement. Users must be onboarded as direct members or customers of the registered collaborators.

The letter also requires Phantom to adopt and enforce policies reasonably designed to comply with Commission and National Futures Association rules on communications with the public and marketing, as if it were a registered IB, and to refrain from advertising that would require NFA pre-approval if it were registered. Phantom and each collaborator must execute a written undertaking accepting joint and several liability for violations of the Act or Commission regulations in connection with the covered activities, and consenting to the Commission’s jurisdiction. Recordkeeping, insolvency-notice, and filing obligations round out the conditions.

Limits of the relief and outside reaction

Letter 26-09 states that the position lasts only until the effective date of a Commission rulemaking or guidance addressing how the IB registration requirement applies to software providers. It represents the views of the Market Participants Division only, is not binding on the Commission, and can be conditioned further, modified, suspended, or terminated at the division’s discretion. Changed or omitted material facts could void it.

In an April 3, 2026 client alert, law firm Jenner & Block characterized the Phantom letter as reflecting a more lenient CFTC approach to certain service providers and described its structure as a bargain in which the recipient conducts itself “as if it were registered” — accepting core obligations such as disclosures, marketing limits, and joint and several liability — without actually registering. That characterization is the firm’s analysis; the letter itself is an enforcement-discretion document and does not exempt any provider from the underlying registration requirements.