CFTC Issues New Staff Advisory on Cooperation

Last week, the Commodity Futures Trading Commission (CFTC or Commission) issued a Staff Advisory (the Advisory) that outlines the Division of Enforcement’s (Division) revised guidance on cooperation for entities and individuals subject to the Commission’s jurisdiction.

Following on the heels of Enforcement Director David Miller’s announcement of the forthcoming changes in late March, as covered in our April 7, 2026, blog post, the Advisory fills in the details of the new policy, which rescinds and replaces the CFTC’s February 2025 advisory and now stands as the sole cooperation policy in force for the agency.

As previewed by Miller, the policy implements a more streamlined evaluation system that appears to allow for better chances of obtaining declinations. In place of the system set by the February 2025 advisory—which included two multitier frameworks and a cooperation “matrix”—the new policy creates a three-part system: Under Part I, parties will secure a declination if they meet the specified requirements (discussed below); under Part II, parties will obtain cooperation credit if they meet several of the specified requirements but (1) fail to meet the self-reporting requirement and/or (2) aggravating factors are present; and under Part III, parties may obtain a lesser amount of cooperation credit—subject to the Division’s discretion—if they are not eligible for relief under Part I or Part II, but they provided some amount of cooperation and/or engaged in some amount of self-reporting.

Part I: Declinations

A party will secure a declination under Part I if: (1) the party made a voluntary self-report to the CFTC; (2) the party fully cooperated during the CFTC’s investigation; (3) the party timely and appropriately remediated any misconduct; (4) the party provided full restitution and/or disgorgement, where applicable; and (5) there were no aggravating circumstances present. The Advisory details further the first four requirements in its Part IV. As to the fifth requirement, Part I defines “aggravating circumstances” as including these four circumstances only: (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, and/or (4) instances in which the misconduct has caused particularly egregious aggregate harm. The Advisory further states that aggravating circumstances may, but do not necessarily, preclude eligibility, as the Division “still retains discretion to refrain from recommending that the Commission commence an enforcement action” based on its assessment of the severity of the circumstances balanced against the party’s actions under the other four criteria.

The new declination scheme and its expressly stated criteria stand in contrast to the previous scheme, under which declinations were available in “extraordinary circumstances” only, and parties lacked definitive guideposts for what would qualify as such from case to case. So, too, does the new scheme’s inclusion of defined “aggravating circumstances.” The previous policy did not include an “aggravating circumstances” component, and its guidance on a similar component, “uncooperative conduct,” provided several examples of such conduct but did not limit itself to those examples, thus casting a broader and more uncertain net for affected parties.

Parts II and III: Cooperation Credit

As to matters that don’t merit declinations, a party can qualify for cooperation credit under Part II or partial cooperation credit under Part III. A party qualifying under Part II can obtain penalty reductions up to 75%, including a guaranteed minimum 50% reduction if the party’s only deficiency was in its self-reporting or a minimum 25% reduction if the matter involved aggravating circumstances.

On the other hand, a party qualifying under Part III—which mandates that the party satisfy the remediation and restitution/disgorgement requirements—can obtain a maximum 25% penalty reduction.

Additionally, in keeping with its more streamlined approach, the new policy assesses both self-reporting and “full cooperation” on a binary standard, with conduct either qualifying or not qualifying based on the criteria enumerated in the policy. These standards replace the previous policy’s three-tier scale for evaluating self-reporting and its four-tier scale for evaluating cooperation.

Remediation and ‘Appropriate Discipline’

Relevant to each of the parts, the new policy designates “Timely and Appropriate Remediation” as its own separate requirement rather than a sub-requirement of cooperation as under the previous policy. Notably, the new policy also imposes a requirement that to earn remediation credit, parties must administer “[a]ppropriate discipline of employees responsible for the misconduct.” This is a significant benchmark given that remediation credit is a prerequisite for obtaining even the lowest level of cooperation credit (Part III). It also reflects a major departure from the previous policy, which merely “consider[ed]” whether parties implemented “accountability measures” for responsible employees as part of their remediation plan.

While practitioners must await examples of how the CFTC applies the “appropriate discipline” mandate in practice, the Advisory as written raises a concerning specter—that a party could successfully fulfill all other policy requirements yet possibly receive no cooperation credit if the Division ultimately disagrees with the party’s disciplinary decisions.

Other Policy Provisions of Note

Other notable changes implemented by the new policy include:

• A requirement that for full credit, parties must self-report “at the earliest possible opportunity, and … not defer disclosure until a routine or periodic reporting date,” while also “encourag[ing]” parties to self-report even before or during an internal investigation instead of waiting until the investigation has concluded
• A related requirement that parties “timely fulfill[] any statutory or regulatory obligation to provide related information to the CFTC or any of its operating divisions after becoming aware of the misconduct”
• As previewed by Miller in April, a provision stating that parties may satisfy the self-reporting requirement even if the agency had previously been made aware of the underlying issue confidentially
• Permitting consideration of parties’ “size, sophistication, and financial condition” in evaluating cooperation
• An express statement that full cooperation requires parties to attribute to specific sources the information they disclose “where doing so does not violate any privilege”—an issue that can be a difficult line to walk for parties
• A requirement for cooperation that parties make former employees available for interviews, facilitate document production from third parties, and “when possible,” facilitate interviews of third parties
• A provision mandating approval of all resolutions by the enforcement director

Finally, the Advisory notes that the Division will release a new Enforcement Manual incorporating this policy, although the Advisory does not give a timeframe for doing so. As that publication has not been updated since May 20, 2020, practitioners and market participants alike will be awaiting the new manual with marked interest. And the same is true for the initial set of outcomes under the new policy—the industry will be observing keenly to see how the CFTC applies its provisions in practice and whether the policy truly provides the “clear path to declinations” of which Director Miller has spoken.