CFTC Staff Letter 26-18: Time-Limited No-Action Position for Cboe Digital Exchange LLC Regarding Dormancy Framework Provisions

CFTC Letter No. 26-18 No-Action June 03, 2026
UNITED STATES
COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Division of
Market Oversight
Joshua Beale
Acting Director
Re: Cboe Digital Exchange, LLC – Request for Time-Limited No-Action Relief from Commission Regulations 40.1 and 38.3(b) This letter responds to a request received by the Division of Market Oversight (“Division” or “DMO”) of the Commodity Futures Trading Commission (“Commission” or “CFTC”) from Cboe Digital Exchange, LLC (“Cboe Digital”), a designated contract market (“DCM”). 1 Cboe Digital has requested a no-action position with respect to certain provisions under the Commission’s dormancy framework for registered entities, in the event that, beginning on June 6, 2026, Cboe Digital would be deemed to be a “dormant designated contract market” pursuant to that framework.
I. Regulatory Background
Commission regulation 40.1 defines a “dormant designated contract market” as “any designated contract market on which no trading has occurred for a period of 365 days; provided, however, no designated contract market shall be considered dormant if its initial and original Commission order of designation was issued within the preceding 1,095 days.”2 Commission regulation 38.3(b) states that “[b]efore listing or relisting products for trading, a dormant designated contract market . . . must reinstate its designation . . .; provided, however, that an application for reinstatement may rely upon previously submitted materials that still pertain to, and accurately describe, current conditions.”3 Cboe Digital’s Request recognizes that the Commission adopted the dormancy framework for registered entities to address potential compliance drift that may arise from an extended period of inactivity. 4 As the Commission has noted, “a significant period of inactivity can potentially have a negative impact on a registered entity’s ability to implement rules and list and clear contracts in a manner that remains consistent with current market conditions, the Commission’s regulations, and self-regulatory best practices.”5 1 See Letter from P. Sexton to J. Beale, Re: Request for Time-Limited No-Action Relief from Commission Regulations 40.1 and 38.3(b) (June 1, 2026) (the “Request”). 2 17 C.F.R. § 40.1 (emphasis in original). 3 17 C.F.R. § 38.3(b). 4 Request at 2. 5 Final rules, Amendments Pertinent to Registered Entities and Exempt Commercial Markets, 73 FR 8599, 8600 (Feb. 14, 2008).

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II. Request for No-Action Position
Cboe Digital has been designated by the Commission as a DCM since October 2011. 6

Cboe Digital represents that, absent any intervening trade, it will be considered dormant on June 6, 2026. 7

Cboe Digital requests the Division issue a no-action position “for Cboe Digital and any market participant that seeks to trade on Cboe Digital if, notwithstanding that Cboe Digital would otherwise be deemed to be a ‘dormant designated contract market’ pursuant to Commission Regulation 40.1, Cboe Digital lists products for trading without having reinstated [its] designation pursuant to Commission Regulation 38.3(b).”8 Cboe Digital proposes such no-action position be subject to certain conditions. 9 Cboe Digital also proposes the no-action position “remain in effect from the date of issuance of the letter until the earlier of (i) ten months after the issuance of the letter, or (ii) the close of business on the date on which a trade is executed on or pursuant to the rules of Cboe Digital.”10 Cboe Digital states “[a]ny such trading activity occurring during the [Covered Period] will reset the 365-day inactivity period that underlies the definition of a ’dormant designated contract market‘ as applied to Cboe Digital.”11

In the Request, Cboe Digital represents that it is “currently evaluating commercial partnerships, sales opportunities, and strategic investments.”12 Cboe Digital also states that the requested no-action position would be similar to the no-action position the Division granted in CFTC Letter No. 25-46. 13 Finally, Cboe Digital states the requested no-action position “would be consistent with Section 3 of the [Commodity Exchange Act]” because permitting Cboe Digital to develop new offers without requiring a lengthy reinstatement process would “promote responsible innovation.”14 Cboe Digital also notes that the conditions it has proposed for the requested no￾action position would mitigate the concerns that underly the Commission’s regulations concerning dormancy by “ensur[ing] transparency, accountability, and an orderly resumption of trading, while preserving the Commission’s oversight.”15
III. No-Action Position
Based on the foregoing and the representations in Cboe Digital’s Request, the Division has determined that a conditional and time-limited no-action position is warranted. Specifically, and 6 Request at 1. Cboe Digital was originally designated under the name Eris Exchange, but changed its name to Cboe Digital Exchange, LLC on October 1, 2022 after it was acquired by Cboe Digital Holdings, Inc. on May 2, 2022. See id. Since Cboe Digital’s initial and original Commission order of designation was issued in 2011, Cboe Digital does not qualify for the carve-out, in the definition of a “dormant designated contract market” under Commission regulation 40.1, for a DCM whose “initial and original Commission order of designation was issued within the preceding 1,095 days.” 17 C.F.R. § 40.1. 7 Request at 1. 8 Id. at 2. 9 Id. at 2-3. 10 Id. 11 Id. 12 Id. at 2. 13 Id. at 4; see CFTC Letter No. 25-46 (Dec. 11, 2025), available at https://www.cftc.gov/csl/25-46/download. 14 Id.; see also 7 U.S.C. § 5(b). 15 Request at 3.

3 subject to the terms and conditions set forth below, the Division will not recommend an enforcement action against Cboe Digital, or against any market participant that seeks to trade on Cboe Digital, if, notwithstanding that Cboe Digital would otherwise be deemed to be a “dormant designated contract market” pursuant to Commission regulation 40.1, Cboe Digital lists products for trading without having reinstated its designation pursuant to Commission regulation 38.3(b). This no-action position is subject to the following terms and conditions:
A. Duration. The no-action position will remain in effect from the date of issuance of the letter until the earlier of (i) April 6, 2027, or (ii) the close of business on the date on which a trade is executed on or pursuant to the rules of Cboe Digital (the “Covered Period”). Any such trading activity occurring during the Covered Period will reset the 365-day inactivity period that underlies the definition of a “dormant designated contract market” as applied to Cboe Digital. B. Certification of Products. During the Covered Period, Cboe Digital will (i) only list for trading products that are individually submitted to the Commission in accordance with the requirements and procedures set forth in Part 40 of the Commission’s regulations, and (ii) provide the Division with at least two business days’ prior written notice of each initial listing of any such product.
C. Compliance Representations.
a. Throughout the Covered Period, Cboe Digital will continue to routinely engage with Division staff regarding any material modifications to its business, operations, systems, policies or programs that might occur as a result of any commercial partnerships, sales opportunities, and strategic investments; and will provide any information relating to any such modifications that is reasonably requested by Division staff. b. Cboe Digital will provide written notice to the Division at least ten business days prior to the first listing for trading of a product during the Covered Period, and will provide concurrently with such notice a written representation from an authorized representative of Cboe Digital that, subject solely to the no-action position provided herein with respect to the “dormant designated contract market” definition in Commission regulation 40.1 and the requirements of Commission regulation 38.3(b), Cboe Digital remains in compliance with all provisions of the Commodity Exchange Act (“CEA”) and all requirements set forth in the Commission’s regulations that are applicable to DCMs, including clearing-related requirements set forth in Commission regulation 38.601 16 and applicable self-regulatory obligations. D. Reinstatement Backstop. If trading has not commenced on Cboe Digital prior to April 6, 2027, then to list products for trading, Cboe Digital must reinstate its designation pursuant to Commission regulation 38.3(b). 16 17 C.F.R. § 38.601.

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This letter, and the position taken herein, represent the views of the Division only, and do not necessarily represent the positions or views of the Commission or of any other division or office of the Commission. This letter and the no-action position taken herein are not binding on the Commission or other Commission staff. 17 The positions provided in this letter do not excuse persons relying on it from compliance with any other applicable requirements contained in the CEA, Commission regulations, or any other applicable laws (i.e., securities laws). Further, this letter, and the position taken herein, are based upon the facts and circumstances presented to Division staff. Any different, changed, or omitted material facts or circumstances may render the position taken in this letter void. Finally, as with all staff letters, the Division retains the authority to condition further, modify, suspend, terminate, or otherwise restrict the terms of the position herein, in its discretion. If you have any questions concerning this correspondence, please contact me at (202) 418- 5446 or jbeale@cftc.gov. Sincerely, ________________________ Joshua Beale Acting Director Division of Market Oversight 17 See 17 C.F.R. § 140.99(a)(2) (“A no-action letter binds only the issuing Division . . . and not the Commission or other Commission staff.”)