CFTC Division of Enforcement Issues New Cooperation Policy

On May 19, the Commodity Futures Trading Commission’s (CFTC or Commission) Division of Enforcement (Enforcement or Division) issued an advisory setting forth a new policy for evaluating cooperation when considering declinations or making enforcement recommendations to the Commission (Policy). The Policy explains Enforcement’s approach to assessing self-reports, cooperation, remediation, and restitution and/or disgorgement and sets forth Enforcement’s approach regarding potential declinations.¹ The Policy is effective immediately, supersedes Enforcement’s prior self-reporting, cooperation, and remediation guidance–including that in a February 25, 2025 advisory covering those topics and related Division Enforcement Manual statements–and will be incorporated into a forthcoming Enforcement Manual update.²

What Has Changed From the 2025 Framework

The Policy replaces the February 2025 framework implemented under then-Acting Chair Caroline D. Pham, which introduced the CFTC’s first mitigation-credit matrix.³ Pham’s matrix approach assigned presumptive penalty discounts based on graduated self-reporting and cooperation scores.

The new Policy abandons that scoring exercise. As Division Director David I. Miller previewed in March 2026 (discussed in our April 6, 2026 Client Alert), cooperation is now binary: A party either fully cooperates or it does not.⁴ That threshold question then feeds into three possible outcomes–declination, substantial penalty credit, or more limited discretionary credit.

The Policy’s Core Requirements

1. Voluntary Self-Report: To qualify as a “Voluntary Self-Report,” a report must be prompt, made in good faith, and made before a known or reasonably anticipated imminent threat of disclosure occurs. It must include all material, non-privileged information then in the party’s possession or control, and it can still qualify if the CFTC already has independent knowledge of the misconduct.⁵ The Policy provides a safe harbor against certain potential charges under the Commodity Exchange Act for any self-report later found to be inaccurate, if the self-report was made in good faith and any inaccurate information is supplemented and corrected promptly after the inaccuracy is discovered.
2. Full Cooperation: For a party’s cooperation to be considered “Full Cooperation,” the party must, among other things, proactively provide non-privileged relevant information; identify all responsible individuals; provide updates on any internal investigations; preserve, collect, and produce documents; deconflict investigative steps upon Enforcement’s request; and make relevant personnel available. Enforcement will assess those expectations in light of the party’s size, sophistication, and financial condition.
3. Timely and Appropriate Remediation: For remediation to be considered “Timely and Appropriate Remediation,” a party must identify root causes, implement remediation where appropriate, maintain an effective compliance and ethics program, impose appropriate discipline, and maintain record-retention controls for business records, personal devices, and messaging applications. For individuals, remediation may include additional training, retaining third-party service providers (e.g., accountants, financial consultants), or temporary activity limits.
4. Full Restitution and/or Disgorgement: To receive credit for “Full Restitution and/or Disgorgement,” Enforcement must agree that a restitution and/or disgorgement plan is appropriate, which requires a party to make harmed parties whole and disgorge ill-gotten gains through a Division-approved plan, with some Enforcement flexibility where identifying all victims is impracticable or calculating the full restitution amount would delay payment and where partial restitution is to be made prior to Enforcement approving a restitution plan.
   
   

The Three Potential Outcomes: Declination, a 25%-75% Penalty Reduction, and a Penalty Reduction Capped at 25%

The goal of cooperation with Enforcement’s investigation by performing the core actions covered by the Policy and discussed above is for Enforcement to decline to recommend enforcement action to the Commission or, failing that, to receive cooperation credit in the form of a reduction in the penalty that Enforcement would otherwise recommend that the CFTC impose. The Policy outlines how different levels of cooperation lead to one of three outcomes.

• Declinations: Enforcement will not recommend that the Commission institute an enforcement action where a party has made a Voluntary Self-Report, provided Full Cooperation, effected Timely and Appropriate Remediation, and provided Full Restitution and/or Disgorgement (if applicable) and there are no disqualifying aggravating circumstances. Even when there are aggravating circumstances, Enforcement retains the discretion to grant a declination based on the overall record.
• A 25%-75% penalty reduction in the absence of a Voluntary Self-Report or in the presence of aggravating factors: When a party provides Full Cooperation and effects Timely and Appropriate Remediation and Full Restitution and/or Disgorgement (if applicable) but does not qualify for a declination path because its good-faith self-report does not qualify as a Voluntary Self-Report under the Policy or because aggravating factors render the party ineligible for a declination, Enforcement will recommend a minimum reduction of 50% in the former scenario and 25% in the latter, capped at 75% in either case.
• A 25% penalty reduction in the absence of both a Voluntary Self-Report and Full Cooperation: When a party has provided neither a Voluntary Self-Report nor Full Cooperation but has engaged in Timely and Appropriate Remediation and provided Full Restitution and/or Disgorgement (if applicable), a party may receive cooperation credit of up to a maximum of 25% (or a potentially greater credit in unspecified “extraordinary circumstances”).
  
  

Potential Industry Implications

Registrants, registered entities, and market participants should review their compliance policies, including the elements on cooperation and self-reporting, against the new Policy to ensure that they can evaluate the best approach when potential misconduct surfaces.

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This alert is for informational purposes only and does not constitute legal advice. If you have any questions about this alert or would like to discuss how these developments may affect your business, please contact the attorneys listed above.

¹ CFTC Letter No. 26-15, CFTC Staff Advisory, Division of Enforcement, New Division of Enforcement Policy on Cooperation (May 19, 2026), available at https://www.cftc.gov/PressRoom/PressReleases/9234-26.
² Id. at 1 and n.2.
³ CFTC Division of Enforcement, Enforcement Advisory: Advisory on Self-Reporting, Cooperation, and Remediation (Feb. 25, 2025).
⁴ Remarks of David I. Miller, director, CFTC Division of Enforcement, NYU Law Program on Corporate Compliance and Enforcement (Mar. 31, 2026).
⁵ In this regard, the Policy diverges from the U.S. Department of Justice’s corporate enforcement policy.