Cboe Digital Exchange, LLC - Time-Limited No-Action Position with respect to Certain Provisions under the Commission’s Dormancy Framework for Registered Entities

Summary: Cboe Digital Exchange, LLC - Time-Limited No-Action Position with respect to Certain Provisions under the Commission’s Dormancy Framework for Registered Entities

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 .

g 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).

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).

2

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

derlies 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

on 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

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 38.60116 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.

licable to DCMs, including clearing-related requirements

set forth in Commission regulation 38.60116 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.

4

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.”)