CFTC Eases Registration Burden for 'Passive Software' Providers

The U.S. Commodity Futures Trading Commission (CFTC) Market Participants Division stated that it will not recommend enforcement action against 'passive software' providers who meet certain conditions, even if they support futures and derivatives trading without registering as futures commission merchants (FCMs), introducing brokers (IBs), or designated contract markets (DCMs). The division clarified in a notice issued on the 17th that such providers—those offering software to connect users with FCMs, IBs, or DCMs for trading—will not face enforcement recommendations based solely on failure to register as an introducing broker or related personnel. However, companies handling customer assets or making trade decisions on behalf of users are excluded from this guidance.

Bloomberg reported that the move effectively expands a March non-enforcement decision previously applied to cryptocurrency wallet Phantom, which partners with Calyx to provide derivatives trading access to over 20 million wallet users.