CFTC Division of Enforcement Issues New Cooperation Policy Advisory

Summary

On May 19, 2026, the Commodity Futures Trading Commission (“CFTC” or the “Commission”) announced a new staff advisory setting forth the Division of Enforcement’s (“Division”) exclusive policy on self-reporting, cooperation, and remediation (“Policy”). The Policy is effective immediately and supersedes all prior advisories on these subjects, including the February 2025 enforcement advisory (“2025 Advisory”), which had introduced a mitigation-credit matrix that provided penalty reductions of up to 55% for voluntary self-reporting with exemplary cooperation and remediation. The new Policy substantially expands the available incentives for voluntary self-reporting and cooperation by creating a structured, three-tier cooperation-credit framework centered on voluntary self-reporting: (i) a path to a full declination where a party satisfies all eligibility criteria; (ii) a potential penalty reduction of 25 to 75 percent for parties whose self-reports did not qualify as Voluntary Self-Reports under the Policy or had other aggravating factors that precluded eligibility for a declination; and (iii) a residual cooperation credit of up to 25 percent for parties that did not self-report or provided more limited cooperation. The Policy also establishes new criteria for qualifying Voluntary Self-Reports and provides more detailed guidance on the Division’s expectations for Full Cooperation, remediation, and record-retention. As the Policy explains, the framework is intended to drive early, voluntary self-reporting of violations, promote timely and effective enforcement of the CEA and CFTC Regulations, reduce market harm, and facilitate prompt remedial action.

Key Aspects of the CFTC Division of Enforcement’s New Cooperation Policy

In a staff advisory the Division explained that the Policy is designed to incentivize registrants and market participants to invest in effective compliance programs, voluntarily self-report potential misconduct, meaningfully cooperate with the Division, and make good-faith efforts to remediate and prevent wrongdoing.^[1]. The key elements are as follows: 

Path to Declination. The Policy provides that the Division will not recommend an enforcement action for violations of the Commodity Exchange Act (“CEA”) and/or CFTC Regulations where a party: (1) made a qualifying Voluntary Self-Report; (2) provided Full Cooperation; (3) effected Timely and Appropriate Remediation; (4) provided Full Restitution and/or Disgorgement, if applicable; and (5) aggravating circumstances do not preclude eligibility. Aggravating circumstances are limited to those involving intentional or reckless misconduct either by ownership or senior management or over extended periods of time, or involving recidivism or particularly egregious aggregate harm. Even where aggravating circumstances exist, the Division retains discretion to decline enforcement after balancing those circumstances against the party’s cooperation efforts.

Penalty Reductions for Ineligible Parties. Where a party provided Full Cooperation, Timely and Appropriate Remediation, and Full Restitution and/or Disgorgement but is ineligible for a declination, either because its self-report did not qualify or because aggravating factors preclude eligibility, the Division will recommend a penalty reduction. That reduction will be at least 50 percent where the self-report did not qualify, or at least 25 percent in matters involving aggravating factors, with a maximum of 75 percent in either case. Where a party is not eligible for a reduction under either framework, the Division retains discretion to recommend up to a 25-percent reduction for any self-reporting or cooperation that occurred.

Voluntary Self-Report. The Division will carefully assess the circumstances of each self-report, including the extent to which the report enabled the Division to preserve and obtain relevant evidence. The report must be made in good faith and before any known or reasonably anticipated imminent threat of disclosure through a whistleblower, the media, or other channels, or of an investigation by an exchange, self-regulatory organization, or governmental entity. The misconduct must be disclosed within a reasonably prompt time after discovery, with the burden on the party to demonstrate timeliness, and the party must report all material, non-privileged information in its possession or control, including when it has incomplete information or an ongoing internal investigation. A voluntary, good-faith self-report will qualify even if the CFTC already has independent knowledge of the misconduct. The Policy also includes a limited safe harbor: the Division will not recommend charges under specified CEA false-statement provisions where a good-faith self-report later proves inaccurate, provided the information is corrected promptly.

Full Cooperation. Full Cooperation requires timely disclosure of all non-privileged, relevant information, including internal investigation findings, identification of all individuals involved regardless of position or seniority, and rolling updates on the internal investigation. Parties must proactively provide relevant information even when not specifically requested, timely preserve and produce relevant documents (including overseas documents and translations), deconflict internal investigative steps with the Division’s requests, and make officers, employees, and agents available for interviews, including, where possible, individuals located overseas and former employees. The Division will consider the size, sophistication, and financial condition of the cooperating party when assessing cooperation.

Remediation, Restitution, and Record-Retention. Remediation requires a thorough root-cause analysis and implementation of measures designed to address those root causes, including an effective compliance and ethics program calibrated to the size and resources of the organization. Among the aspects of an effective compliance and ethics program that the Division will look for and consider include adequate compliance resources, independence and authority of the compliance function with meaningful access to senior leadership, a risk-based program informed by a robust compliance -risk assessment, and ongoing testing and evaluation. The Policy requires appropriate discipline of employees responsible for the misconduct, including individuals who directly engaged in the wrongdoing, those who failed in their oversight responsibilities, and individuals with supervisory authority over the relevant business area. Record-retention measures must include policies prohibiting the improper destruction or deletion of business records and adequate controls over personal devices and ephemeral messaging platforms, a new requirement not present in the 2025 Advisory. As to restitution, the party must implement a Division-approved plan to provide full restitution to those harmed and full disgorgement of all ill-gotten gains, if applicable, with credit given for proactive partial restitution provided before agreement on a formal plan.

Implications

The new Cooperation Policy has practical consequences for registrants, market participants, and individuals involved in CFTC enforcement matters, both prospectively and with respect to pending matters.

Self-Reporting Incentives. The Policy significantly expands the incentives available to parties that voluntarily self-report. Under the 2025 Advisory, the maximum mitigation credit was 55 percent, available only for parties achieving exemplary marks for both self-reporting and cooperation, and declinations were reserved for extraordinary circumstances. The new Policy replaces that framework with a structured path to a full declination for eligible self-reporters and penalty reductions of up to 75 percent for parties whose self-reports did not qualify as Voluntary Self-Reports under the Policy or had other aggravating factors that precluded eligibility for a declination. The quantified penalty reductions and express declination criteria may lead to greater predictability of enforcement outcomes and are likely to inform the cost-benefit analysis for parties evaluating whether to self-report.  Notably, the 2025 Advisory's provision deeming a party "uncooperative" for failing to self-report a material violation involving willful misconduct, harm to clients or counterparties, or significant financial losses has no counterpart in the 2026 Policy.

Absence of a Penalty Baseline. The Policy quantifies the percentage reductions available at each tier of the newly announced framework but does not address how the starting penalty will be determined.  Whereas the 2025 Advisory indicated that initial penalty amounts would be based, among other things, on past Commission precedent, the Policy states only that reductions will be calculated from “the Division’s good-faith calculated penalty,” without providing guidance on the methodology for that calculation.  Without specific details around the baseline penalty to which discounts are to be applied, market participants may find it challenging to evaluate how the Policy is being implemented. 

Narrow Self-Reporting Window. The self-reporting window is time-sensitive: a report must be made “within a reasonably prompt time” after becoming aware of the misconduct, and before any known or reasonably anticipated imminent threat of disclosure or investigation. Although the Division will recognize self-reports made to “any division of the CFTC,” the Policy makes clear that the Division “expects registrants to report misconduct at the earliest possible opportunity,” rather than waiting for a “routine or periodic reporting date.” This may signal a greater challenge for registrants to secure declinations for material non-compliance issues addressed only in annual reports submitted under Rule 3.3. The path to a declination will close once external disclosure or an investigation becomes imminent, and all companies that become aware of potential violations should promptly evaluate whether to self-report.

Demanding Cooperation and Remediation Standards. Full Cooperation is a comprehensive obligation requiring not only disclosure but proactive assistance, complete document production (including overseas documents and foreign language translations), and deconfliction with the Division’s investigative process. The 2026 Policy provides substantially more detailed cooperation guidance than the 2025 Advisory, which described cooperation obligations in broad terms. In particular, the deconfliction requirements are entirely new and had no counterpart in the 2025 Advisory. Remediation is equally exacting: the Division expects a root-cause analysis, a robust compliance program, discipline of responsible employees at every level, and record-retention measures that specifically address ephemeral messaging platforms. Notably, the 2026 Policy is silent on the role of the CFTC’s Operating Divisions in evaluating remediation, a significant departure from the 2025 Advisory, which provided that the relevant Operating Division would assess the adequacy of remediation and determine whether to recommend a compliance monitor or consultant.

Individual Accountability. The Policy applies to both entities and individuals. The requirement that cooperating parties identify all individuals involved in the misconduct regardless of seniority, and the emphasis on disciplining not only those who engaged in wrongdoing but also those who failed in oversight, signals that individual accountability remains central to the Division’s enforcement approach.

Impact on Pending Matters. Because the Policy is effective immediately and rescinds all prior cooperation advisories, parties with pending matters should assess whether the new framework alters the calculus around self-reporting, cooperation, or remediation. The Division indicated that a new Enforcement Manual incorporating this Policy will be released, and parties should monitor for that publication.