The CFTC's Market Participants Division has extended temporary relief for developers of "passive" trading software. Under established conditions, the regulator will not recommend sanctions for operating without registering as an introducing broker. This pertains to services that display market data and user positions, inform about available products, and transmit orders to registered market participants.
The rules apply to various regulated derivatives, including event contracts and perpetual futures. Programs can operate independently or be integrated into other applications, including crypto wallets. However, the developer must not hold or control client assets, generate direct buy or sell signals, or independently choose the route and method of order execution. The user remains the direct client of the broker or trading venue.
Companies will be able to receive commissions and a share of partnership revenue, as well as advertise their services and the products available through them. In return, they must disclose fees and potential conflicts of interest, warn about risks, comply with advertising requirements, and maintain records of service operations. The relief is temporary and represents the position of the CFTC division, not the entire Commission. The agency may change or revoke it before permanent rules for developers are adopted.
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