CFTC Staff Publishes Enforcement Referrals Procedure

• On May 20, 2025, the Market Participants Division and the Division of Enforcement of the CFTC jointly issued CFTC Procedure No. APP-800.9-PRO. The Procedure documents the Divisions’ policy with respect to the circumstances under which: (1) MPD would make a referral to DOE concerning a potential enforcement matter against a registered non-U.S. swap dealer (or other Swap Entity as defined in the Procedure) for violation of a CFTC requirement for which such Swap Entity is relying on substituted compliance and (2) DOE would recommend that the CFTC commence an enforcement action for such a violation.
• Among other things, the Procedure clarifies that MPD and DOE will not make an enforcement referral or recommendation, respectively, against a Swap Entity relying on substituted compliance if the relevant foreign regulator confirms that it has determined that the Swap Entity is in compliance with the applicable foreign comparable standard.
• Additionally, absent “exigent or extraordinary circumstances,” MPD and DOE will not make an enforcement referral or recommendation, respectively, if the relevant foreign regulator (1) is in the process of determining a Swap Entity’s compliance with the applicable foreign comparable standard or (2) has determined that the Swap Entity is not compliant, but is satisfied that appropriate remedial action has been or will be taken.

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