CFTC Staff Issues Advisory on Cooperation in Enforcement Matters

What Changed

• - The CFTC Division of Enforcement has adopted a new, unified cooperation policy that expressly supersedes all prior Division cooperation and self‑reporting advisories (including the 2017 corporate and individual cooperation factors and the February
• The new advisory establishes a clear “declination pathway” under which, absent aggravating circumstances, a respondent that voluntarily self‑reports, fully cooperates, timely and appropriately remediates, and provides full restitution and/or disgorge
• The advisory formalizes that voluntary self‑reporting is a central prerequisite for the highest level of credit, distinguishing between cases with self‑reports (potential declination or high mitigation credit) and cases without self‑reports (limited
• The policy confirms that “full cooperation” will be a necessary condition for a declination, which in practice will require proactive, resource‑intensive engagement with Enforcement beyond mere compliance with legal process (for example, extensive vo
• The advisory codifies that timely and appropriate remediation is a separate and indispensable requirement for top‑tier outcomes, emphasizing that firms must implement corrective measures before resolution, not merely promise future changes.
• Full restitution and/or disgorgement of ill‑gotten gains is now expressly identified as a condition for a declination, indicating that respondents should expect to be made economically neutral at a minimum even where penalties are declined.

Suggested Considerations

• Identify and catalogue all existing internal policies, playbooks, and checklists relating to CFTC investigations, dawn raids, inquiries, self‑reporting, and cooperation, and amend them to reflect the new advisory’s superseding status.
• Update the firm’s enforcement‑response framework to explicitly incorporate the new declination pathway, including clear decision criteria for when and how to voluntarily self‑report potential CFTC violations.
• Establish or refine escalation triggers for potential insider trading, fraud, manipulation, and market abuse in CFTC‑regulated markets to ensure that issues can be investigated and elevated quickly enough to support “prompt” and “voluntary” self‑reporting.
• Design and document a structured internal investigation protocol that can generate the level of factual development, analysis, and documentation needed to demonstrate “full cooperation,” including protocols for sharing findings, data, and analytics with the CFTC where appropriate.
• Implement procedures to rapidly secure, preserve, and collect relevant trading records, communications (including messaging apps), surveillance alerts, and algorithmic trading data so that the firm can cooperate effectively and avoid any appearance of obstruction or delay.
• Enhance remediation governance by defining what constitutes “timely and appropriate remediation” for key CFTC risk areas (e.g., surveillance calibration, trade controls, conflicts of interest, benchmark submission controls) and ensuring those steps can be completed before case resolution.

Key Dates

Who is Affected