CFTC Staff Grants No-Action Relief for Passive Software Providers

The CFTC has issued a staff no-action position outlining conditions under which providers of passive software can operate without registration.

The Commodity Futures Trading Commission (CFTC) has announced that its staff has issued a no-action position regarding providers of passive software. The regulatory stance addresses certain technological and software entities, establishing specific parameters under which these passive software providers may function without facing enforcement action regarding commodity trading advisor or intermediary registration requirements. According to the CFTC, the staff no-action letter clarifies the agency's oversight boundaries regarding technological infrastructure providers whose software operates on a passive basis rather than providing active, customized advisory or discretionary trading execution. Market participants and compliance professionals are advised to review the specific conditions laid out in the CFTC staff letter to determine eligibility and maintain full compliance with federal commodities regulations.