On September 17, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission’s (CFTC) Market Participants Division each announced relief for onchain trading: the SEC an Innovation Exemption for tokenized stock, and CFTC staff a no-action position for passive trading software. Both came two days after the Senate failed to invoke cloture on the motion to proceed to the Digital Asset Market Clarity Act (CLARITY Act), 49 to 50. That vote leaves the bill’s path uncertain.
The two actions do different things. The SEC order opens a conditional path for tokenized securities venues and their liquidity providers. The CFTC letter addresses introducing broker registration for passive software providers and associated person registration for their personnel. This post covers what each means for companies that build software but do not hold customer assets.
Link to The Agencies Had This Ready The Agencies Had This Ready
Neither action was improvised. The SEC launched Project Crypto in July 2025, and Chairman Paul Atkins previewed an innovation exemption in his July 31, 2025 remarks. CFTC staff issued Letter 26-09 to a crypto wallet developer in March 2026, the template for this week’s broader relief.
Atkins’ statement accompanying the order ties it directly to Congress’s failure to advance CLARITY. The agencies built the tools in advance and used them within 48 hours of the vote.
Link to CFTC Relief for Passive Software Providers CFTC Relief for Passive Software Providers
Staff Letter 26-25 extends to any qualifying passive software provider (PSP) the position staff gave one developer in March. If the conditions are met, staff will not recommend enforcement for failure to register as an introducing broker (IB), or as an associated person of an IB, based solely on the covered activities. The relief is not limited to crypto software.
Covered software lets users view market and position information and send orders directly to registered futures commission merchants (FCMs), IBs, or designated contract markets (DCMs). Trading must occur on a DCM, directly or through a member FCM or IB, and assets securing positions stay with the clearing organization or a member FCM. The PSP cannot custody user assets, generate buy or sell signals, or exercise discretion over routing or execution.
The letter allows a PSP to solicit users for particular registrants, take a share of registrant revenue, and charge users transaction-based fees. Older technology vendor guidance allowed none of that. Those permissions are what make the model commercially useful for wallet and interface developers.
The conditions are not light. A PSP must file a notice accepting the conditions and consenting to CFTC jurisdiction over the covered activities; sign and file undertakings with each registrant accepting joint and several liability for violations by the PSP or its personnel; obtain user acknowledgment of conflict and fee disclosures and deliver risk disclosures unless the registrant already provides them; adopt IB-style marketing and communications controls, avoid promotions that would need NFA preapproval, and keep required records; and satisfy statutory disqualification conditions and give required notices, including for insolvency or bankruptcy. Users must keep direct access to their registrants.
For a provider weighing the relief, the question goes beyond software design. Its registrant counterparties have to sign the undertakings and support the compliance arrangements.
Link to SEC Relief for Tokenized Stock Trading SEC Relief for Tokenized Stock Trading
The SEC’s order uses Exchange Act Section 36 to grant temporary, conditional exemptions from the definitions of “exchange” and “dealer.” The exchange exemption covers Tokenized Securities Venues (TSVs) that run permissioned automated market maker liquidity pools and set access standards for trading. The dealer exemption covers liquidity providers using proprietary capital, on separate conditions. Both run from September 17, 2026 through September 17, 2031.
Conditions include limits on symbols and volume, tokens carrying the same rights as the underlying stock, issuer notice and objection rights for third-party tokenized stock, public and auditable smart contracts on a public permissionless ledger, and operational disclosures. Trading must stop when the underlying stock halts on its primary listing exchange. The TSV must be a U.S. person and comply with sanctions requirements. It must publish its operational notice at least 30 calendar days before starting operations and notify the SEC within one business day after publication.
For software providers, the question is function. Footnote 28 of the order treats a website, browser extension, or other software a TSV supplies for entering, displaying, or agreeing to trades as part of the TSV. The order creates no general exemption for writing software, but a business whose software does those things may sit inside the venue framework. Developers should look at who controls the pool, the trading parameters, and the access standards.
Link to Our Take Our Take
CLARITY’s failure did not stop the agencies. It did limit what they could do. Neither action gives non-custodial developers a statutory framework, and neither resolves the open questions on securities, derivatives, money transmission, or anti-money laundering obligations.
The two actions also differ in what they are. The SEC issued a Commission exemptive order. The CFTC issued a staff position that does not bind the Commission, can be modified or withdrawn, and by its terms lasts only until Commission rulemaking or guidance replaces it. They are not interchangeable safe harbors, and a business should know which one it is relying on.
Software providers should map their activities to the relief that fits, identify the obligations that remain, and review the required contracts and disclosures before changing operations. The opening is to build inside defined conditions while Congress keeps debating.