On May 19, 2026, the Division of Enforcement of the Commodity Futures Trading Commission (CFTC) issued a staff advisory establishing a new self-reporting and cooperation policy. The advisory supersedes the Division's February 2025 cooperation policy and articulates a clearer, more predictable path to declination for companies that voluntarily disclose misconduct. For market participants weighing whether to come forward, the revised framework materially reshapes the enforcement risk calculus and warrants a fresh look at internal escalation, investigation, and disclosure protocols.
Under the new policy, full declinations are available when a company satisfies five factors. First, the company must voluntarily self-report the misconduct to the Division. Second, it must provide full cooperation throughout the Division's investigation. Third, it must undertake timely and appropriate remediation. Fourth, it must make full restitution and disgorgement to the extent applicable. Fifth, the matter must be free of aggravating circumstances. When all five elements are present, the staff advisory contemplates that the Division will decline to pursue an enforcement action, providing a meaningful incentive for companies to surface issues identified through internal compliance processes.
For parties that do not qualify for a full declination, the advisory provides for penalty reductions of up to 75 percent, preserving substantial value for companies that engage constructively with the Division even where declination is unavailable. Notably, the policy moves to a binary full cooperation or not standard, eliminating intermediate gradations of credit. That shift raises the stakes for cooperation decisions, because partial or selective cooperation will no longer yield partial credit. Companies must be prepared to commit fully once a decision to cooperate is made.
Practically, the policy elevates the importance of well-rehearsed incident response and internal investigation procedures, careful evaluation of disclosure timing, and disciplined coordination among legal, compliance, and business stakeholders. Boards and senior management should consider revisiting voluntary disclosure protocols, remediation playbooks, and restitution mechanisms in light of the revised criteria, particularly the heightened importance of demonstrating timely remediation and full restitution at the front end of any engagement with the Division.
This update is provided for general informational purposes only and does not constitute legal advice. Clients facing potential CFTC enforcement matters should consult counsel for advice tailored to their specific circumstances.