On April 13, 2026, the staff of the Division of Trading and Markets (“Staff”) of the U.S. Securities and Exchange Commission (“SEC” or “Commission”) issued a statement (“Statement”) clarifying its views on broker-dealer registration requirements under Section 15(a) of the Securities Exchange Act of 1934 (“Exchange Act”) with respect to persons that create, offer, or operate a “Covered User Interface” (“CUI”) that allows users to initiate self-directed transactions in crypto asset securities.¹  The Statement only addresses the use of a CUI (as defined below) for crypto asset securities transactions.² The Statement is significant because it is the clearest acknowledgment to date that software enabling user-directed, self-custodial crypto transactions is not, by itself, a broker-dealer.  While some questions remain, the Statement reduces uncertainty that has historically constrained the design of wallets, decentralized finance (“DeFi”) front ends and other crypto infrastructure.  Notably the Statement addresses software that connects to centralized (e.g., limit order book matching systems or request-for-quote systems) and distributed ledger trading systems (e.g., automated market maker liquidity pools or liquidity aggregators) (“DLTSs”).

By identifying activities permitted to be offered via a CUI, the Staff establishes a regulatory perimeter for CUI providers, clarifying when they may enable users to interact with blockchain protocols without registering as a broker-dealer pursuant to Section 15(b) of the Exchange Act.  To be covered by the Statement, a CUI provider’s interface must meet the definition of a CUI in the Statement and operate consistent with specified conditions without performing any of nine prohibited activities.  Each of these requirements is discussed in more detail in the sections below.  The Statement contemplates later Commission action on this topic and will be considered withdrawn five years after its publication, or on or about April 13, 2031; however, as a staff-level statement, it can be rescinded or withdrawn at any time.³  The Staff has invited comments and input on the Statement.

Definition of Covered User Interfaces

            A CUI is defined as “an interface provided by a website, browser extension, or other software application (e.g., mobile application) that may be embedded in a wallet or separately available for download, designed to assist users engaging in user-initiated crypto asset securities transactions on blockchain protocols (or blockchain-based smart contracts) utilizing the user’s self-custodial wallet.”⁴  Critical to this definition is the Staff’s understanding that CUIs prepare code that enables users to interact with blockchain protocols or blockchain-based smart contracts by converting user-identified transaction parameters into blockchain-legible messages for signing and transmission via the user’s self-custodial wallet.  In addition, the CUI may (a) provide users with market data, including potential execution routes, pricing information and estimated transaction and/or network costs; (b) charge users a fixed percentage per transaction; (c) present educational material to users to help them formulate and set their desired transaction parameters on either a transaction-by-transaction or a default basis; and (d) solicit users to use the interface.

Required Measures for Covered User Interfaces

The Statement is expressly limited to Section 15(a) of the Exchange Act and sets forth specific requirements that a CUI and its provider must satisfy in order to be covered by the Statement.  These requirements appear to be modeled after certain regulatory requirements and guidance applicable to broker-dealers.

1. Customizable Transaction Parameters. A CUI must permit users to customize any default transaction parameters and provide educational material to help users formulate and set their desired transaction parameters.
2. No Solicitation. While CUI providers may solicit users to use the CUI generally, they may not solicit users to engage in any specific crypto asset securities transaction.
3. Connections or Interactions With Trading Venues and Distributed Ledger Trading Systems; Disclosing Affiliation. The CUI provider must select one or more default trading venues or DLTSs with which to connect or interact, which reflects that the Statement applies to both traditional venues and blockchain-based venues.  If affiliated, the CUI provider must clearly disclose to users its affiliation with a trading venue or DLTS and must connect or interact with any such affiliated trading venue or DLTS on the same terms and conditions as with any other unaffiliated trading venue or DLTS.
4. Display and Filtering of Possible Execution Routes; No Commentary. Where the CUI only displays one potential execution route, it must provide users with the ability to view additional, alternative execution routes if applicable.  By contrast, if the CUI displays more than one potential execution route to a user, it must provide users with filtering or sorting tools that display potential routing destinations based on objective factors (e.g., alphabetical list, lowest/highest price, or speed of execution) and must allow the user to sort potential execution routes based on such objective factors.  The CUI may not provide commentary on any potential execution route(s) displayed to a user (e.g., “best price” or “most reliable”).
5. Generation of Trading Instructions and Display of Market Data. CUIs must use software that operates based on pre-disclosed and objective parameters that are independently verifiable to prepare a user’s trading instructions and display market data related to potential execution routes.
6. No Exercise of Discretion or Control. Except as expressly permitted in the Statement, a CUI may not exercise any control or discretion over, or engage in any decision-making regarding, the market information provided to users, or securities transactions engaged in by users.
7. Compensation.  A CUI provider must limit its compensation to a “fixed charge” to the user that is based on objective factors, applied consistently, and agnostic as to product, route, venue, and counterparty.  This is a notable departure from the Staff historically taking the position that receiving transaction-based compensation in connection with a securities transaction requires registration as a broker-dealer.⁵ This position is, however, consistent with a motion to dismiss decision in the Southern District of New York finding that, where the defendant did not perform “key trading functions” or “make investment recommendations,” the fact that the defendant “at times, received a commission does not, on its own” trigger broker-dealer status.⁶  According to the Statement, the “fixed charge” may be a flat fee or a transaction-based fee (calculated as a percentage of each transaction or as a flat, per-transaction fee).  Although the CUI provider may receive a transaction based fee, the Statement makes clear that a CUI provider may not receive any compensation based on the size, value, or occurrence of a transaction from any person other than the user, which precludes, among other things, the receipt of payment for order flow.
8. Policies and Procedures. A CUI provider must establish policies, procedures, and controls that are reasonably designed to (a) evaluate, onboard, and audit trading venues and DLTSs the CUI will connect to or interact with based on objective factors⁷ and (b) evaluate, determine, and periodically reassess any default transaction parameters based on objective factors and address any conflicts of interest or risks associated with any default transaction parameters.
9. Disclosures. A CUI provider must prominently disclose to users and keep current all material facts related to:
   1. Its role relating to the creation, offering, or operation of a CUI, including a disclaimer stating that the CUI provider is not registered with or regulated by the SEC;
   2. Its fees, including their calculation and structure;
   3. Material conflicts of interest;
   4. Limitations associated with the use of the CUI;
   5. Software parameters used to prepare a user’s trading instructions and to display market data related to potential execution routes;
   6. Cybersecurity policies, procedures, and controls;
   7. Policies, procedures, and controls regarding the protection of user trading information;
   8. Policies, procedures, and controls regarding the CUI’s integration with trading venues and DLTSs, including identifying the trading venues and DLTS and how they are evaluated, onboarded, and audited; and
   9. Any default transaction parameters, including how they are determined, associated risks, and conflicts of interest and the CUI provider’s policies, procedures, and controls to address any default transaction parameters and associated risks and conflicts of interest.

Prohibited Activities for Covered User Interfaces

The Statement will not apply and the CUI provider may be subject to broker-dealer registration requirements under Section 15 of the Exchange Act if it engages in, or holds itself out as (a) negotiating terms for any transaction; (b) soliciting specific crypto asset securities transactions; (c) making investment recommendations or providing advice; (d) arranging for financing; (e) processing trade documentation; (f) conducting independent asset valuations; (g) holding, having access to, handling, managing, or possessing user funds, securities, or stablecoins; (h) executing or settling transactions; or (i) taking or routing orders (note that the Statement appears to distinguish between “taking or routing” orders and converting user-identified transaction parameters into blockchain-legible commands for signature and transmission via the user’s self-custodial wallet).

Practical Implications

Taken together with the Commission’s March 17, 2026 interpretive guidance on the application of the federal securities laws to crypto asset securities, and prior Staff statements on topics such as tokenization taxonomy, custody, stablecoins, and net capital, the Statement represents an important step toward regulatory clarity and offers an actionable pathway for certain market participants.  At the same time, it is non-binding Staff level guidance and leaves meaningful questions unanswered.  For example, questions remain regarding specific custody and fee structures, AML/KYC, order handling, execution venues, and DeFi integrations, among others.  As a result, market participants should carefully evaluate the Statement in the context of their specific activities, compliance programs, and strategic objectives.  Following the Staff Statement, Commissioner Peirce commended the Staff for publishing the Statement and expressed the need for public feedback to inform future rulemaking to assess defined terms, such as “broker,” against the backdrop of new technologies.⁸  Market participants should consider proactively engaging with the SEC as the Staff welcomes comments on all aspects of the Statement, to ensure their perspective is considered in future guidance, relief, or rulemaking.