CFTC Division of Enforcement Issues New Cooperation Policy

On May 19, 2026, the Division of Enforcement (Division) of the Commodity Futures Trading Commission (CFTC) issued a new cooperation policy (Policy) establishing a practical framework for how the Division will consider self-reporting, cooperation, and remediation in declination and penalty determinations.¹ The Policy rescinds and replaces the Division’s prior guidance on these subjects, including the February 2025 Enforcement Advisory.

Key Takeaways

• The Division has created a clear path to a declination. For the first time, the Division has laid out detailed criteria for a declination where a party satisfies five conditions: a voluntary self-report, full cooperation, timely and appropriate remediation, full restitution and/or disgorgement, and there are no aggravating circumstances.
• The criteria for a declination are strict, and timing matters. A self-report must be prompt, in good faith, complete as to material nonprivileged information then available, and made before a known or reasonably anticipated imminent threat of disclosure or investigation. Previous CFTC guidance suggested that in considering whether a self-report was “prompt,” a party would be afforded time to investigate and escalate the issue internally. This new guidance requires parties to report misconduct “at the earliest possible opportunity.”
• Even when a declination is not appropriate, parties can receive significant credit for self-reporting and cooperation: Where a party fully cooperates, remediates, and provides restitution or disgorgement but either lacks a qualifying voluntary self-report or has aggravating factors, the Division may recommend penalty reductions of at least 50% or at least 25%, respectively, with the maximum reduction capped at 75%. Further, even if there has not been both a voluntary self-report and full cooperation, the Division may recommend a penalty reduction of up to 25% for partial cooperation.
• The advisory does not specify the penalties levels from which the reductions are assessed: The advisory does address a challenge practitioners have long articulated — that in the absence of penalties levels or penalty guidelines, it can be hard to assess the real-world impact of percentage penalty reductions. As before, the Division is guided by statutory maximums and precedent, which affords staff discretion in assessing penalties.

Overview

Under the new framework, the Division will not recommend that the CFTC bring an enforcement action against a firm or individual for violations of the Commodity Exchange Act (CEA) or CFTC regulations if the party fulfills the following conditions:

• The party made a voluntary self-report to the CFTC about the misconduct.
• The party provided full cooperation during the Division’s investigation.
• The party effected timely and appropriate remediation of the misconduct.
• The party provided full restitution and/or disgorgement, if applicable.
• No aggravating circumstances exist that will preclude eligibility.

Defining Each Factor

To ensure that market participants understand how the Division will apply these factors in practice, the Policy sets out definitions for determining whether a party has satisfied each condition.

I. Voluntary Self-Report

To qualify as a voluntary self-report under the Policy:

1. The party must report the misconduct to any division of the CFTC.
2. The party must report the misconduct in “good faith,” a determination based on the level of transparency, timing, completeness, and circumstances leading to the self-report.
3. The party must report the misconduct “voluntarily,” that is, before a known or imminent threat of disclosure or investigation.
4. The party must disclose the misconduct “within a reasonably prompt time” — meaning “at the earliest possible opportunity” — after becoming aware of the misconduct.
5. The party must report “all material, non-privileged information in its possession or control about the misconduct.”
6. After becoming aware of the misconduct, the party “must have timely fulfilled any statutory or regulatory obligation to provide related information to the CFTC or any of its operating divisions.”

Even if the CFTC has independent knowledge of the misconduct, a voluntary, good-faith report that otherwise satisfies the Policy will qualify as a voluntary self-report.

The Policy also offers a limited safe harbor for good-faith inaccuracies in a self-report if the party promptly supplements and corrects the inaccurate information after discovery.

II. Full Cooperation

Under the Policy, full cooperation means more than responding to requests. It requires

1. timely disclosure of all nonprivileged, relevant information, including information gathered during any internal investigation and identification of all individuals involved in or responsible for the misconduct
2. proactive cooperation, including disclosure of relevant information not specifically requested
3. timely preservation, collection, and production of all relevant information
4. deconflicting internal investigative steps at the Division’s request
5. making officers, employees, and agents with relevant information available for interviews

III. Timely and Appropriate Remediation

For a party to receive credit for timely and appropriate remediation under the Policy, it must

1. conduct a root-cause analysis of the misconduct and, where appropriate, implement remedial measures
2. implement an effective compliance and ethics program calibrated to its size, resources, and business risk
3. discipline employees responsible for the misconduct, including individuals with relevant supervisory authority
4. implement appropriate record-retention measures

The Division may grant a declination or award cooperation credit before or after the full implementation of timely and appropriate remediation, depending on the circumstances.

IV. Full Restitution and/or Disgorgement

Restitution and disgorgement require an acceptable plan. The Division must agree that the party has put in place an appropriate plan to provide full restitution and disgorge ill-gotten gains, as applicable.

The Division may grant a declination or award cooperation credit before or after payment, depending on the circumstances.

V. Aggravating Circumstances

Under the Policy, aggravating circumstances that may, but do not necessarily, preclude eligibility are limited to

1. pervasive intentional or reckless misconduct by ownership or senior management,
2. intentional or reckless misconduct occurring over an extended period,
3. recidivist intentional or reckless misconduct, or
4. instances in which the misconduct has caused particularly egregious aggregate harm.

Cooperation Credit When the Party Fails to Meet All Factors

The Policy also addresses situations where a party may obtain cooperation credit even when it falls short of satisfying every factor required for a declination.

Where aggravating circumstances or failure to qualify for a voluntary self-report preclude eligibility for a declination, cooperation credit is still available. If a party meets the other factors, the Division will recommend a reduction in the monetary penalty of at least 25% (where there are aggravating circumstances) and 50% (where there was a good-faith self-report that did not qualify as a voluntary self-report). In each case, the maximum credit is a 75% reduction.

The Division also retains discretion to award cooperation credit of up to a 25% penalty reduction for self-reporting or cooperation efforts, so long as the party has “engaged in Timely and Appropriate Remediation and has provided Full Restitution and/or Disgorgement.”

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¹ Commodity Futures Trading Comm’n, Div. of Enf’t, CFTC Letter No. 26-15, New Division of Enforcement Policy on Cooperation (May 19, 2026).