The CFTC Resets Its Cooperation Framework: New Advisory Creates Clear Path To Declination

Key Takeaways

• The CFTC’s Division of Enforcement issued a new cooperation advisory that creates a clear path to declination, subject to the Division’s discretion, for companies that self-report, fully cooperate, provide full restitution and/or disgorgement, and remediate misconduct, absent aggravating circumstances.
• The advisory replaces prior, highly structured guidance with a more streamlined approach.
• The Division will credit prompt, good-faith self-reporting even if the CFTC already learned of the misconduct from another source, a notable departure from past practice.
• The new advisory reflects the Commission’s continuing effort to recalibrate its cooperation framework, but frequent revisions to cooperation policies create uncertainty for market participants weighing self-reporting decisions.

The New Cooperation Framework

On May 19, 2026, the Commodity Futures Trading Commission’s (CFTC) Division of Enforcement (Division) issued a staff advisory outlining a new approach to evaluating cooperation, self-reporting and remediation in enforcement matters. The advisory supersedes all prior guidance and is intended to provide greater clarity, promote consistency and reinforce transparency in the Division’s enforcement practices.

The centerpiece of the new advisory is a defined pathway to declination. Under the advisory, the Division may, in its discretion, decline to recommend enforcement action where a party voluntarily self-reports misconduct, provides full cooperation, undertakes timely and appropriate remediation and provides restitution and/or disgorgement as necessary, so long as no aggravating circumstances preclude eligibility. This represents a meaningful change from prior guidance, in which declinations were reserved for exceptional or extraordinary cases.

To qualify as a voluntary self-report, disclosure must be made proactively and before any known or reasonably anticipated imminent threat of disclosure from another source. The self-report may be made to any CFTC division and need not be made directly to the Division of Enforcement. It also must be made within a reasonably prompt time after becoming aware of the misconduct, and the party must report all material, non-privileged information in its possession or control. Notably, the Division will credit good faith self-reporting even if the Commission has already learned of the underlying conduct from a confidential source.

To receive credit for full cooperation, a party must make timely and proactive disclosure of all relevant non-privileged information at the time of reporting, even if an internal investigation is ongoing. Full cooperation typically requires, among other things, preserving and producing relevant documents in a timely manner, providing factual information identified through internal reviews, identifying and facilitating access to key personnel and otherwise assisting the Division in understanding the facts.

Timely and appropriate remediation requires a company to identify and address the root causes of the misconduct. A party must implement an effective compliance and ethics program and appropriately discipline employees responsible for the misconduct, including those who engaged directly in wrongdoing and those who failed in their supervisory responsibilities. Recognizing that the remediation process may be lengthy and complex, the Division may award cooperation credit before full implementation of remediation.

If a party voluntarily self-reports, provides full cooperation, undertakes timely and appropriate remediation and provides restitution or disgorgement as required, the Division has discretion to grant a declination. Aggravating circumstances—such as intentional or reckless misconduct, recidivism or egregious harm—may preclude eligibility for a declination, though the Division still retains discretion to refrain from recommending an enforcement action where such circumstances do not outweigh cooperation and remediation. The advisory also provides for reductions in recommended civil monetary penalties of between 25 and 75 percent under certain circumstances, such as when a party has provided timely and appropriate remediation and full restitution and/or disgorgement, but did not make a voluntary self-report, did not engage in full cooperation, and/or aggravating circumstances are present.

Implications for Market Participants

The CFTC’s new cooperation advisory is a sharp departure from the detailed framework set out in the CFTC’s February 2025 advisory on self-reporting, cooperation and remediation. That earlier guidance introduced a highly structured methodology for evaluating cooperation, including a three-tier scale for self-reporting, a four-tier scale for cooperation and a mitigation credit matrix linking those assessments to quantitative reductions in civil monetary penalties.

The advisory reflects a deliberate effort to simplify the approach to self-reporting and cooperation while strengthening incentives for market participants to disclose and remediate misconduct. By establishing a clearer path to declination and replacing a complex matrix-based framework with a simplified standard, the Division has prioritized transparency and ease of administration.

This presents both opportunities and potential pitfalls for market participants. The most immediate benefit is the availability of a clearer and more transparent pathway to declination for companies that are prepared to self-report, cooperate fully and remediate misconduct. This clarity may facilitate more predictable and favorable outcomes and encourage earlier engagement with the Division. However, the advisory creates a relatively high bar for declination, and parties who self-report misconduct risk failing to meet it. In addition, the Division’s history of frequent revisions to its cooperation guidance introduces uncertainty regarding the durability of the new advisory.

The cooperation framework also raises important questions regarding its interaction with the CFTC’s whistleblower program, which is designed to incentivize individuals to report potential violations by offering monetary awards and anti-retaliation protections. By allowing firms to receive self-reporting credit even where the Commission has already learned of the misconduct from a confidential source, the advisory may reduce the relative leverage of whistleblower tips in certain enforcement scenarios.

Market participants should carefully evaluate how the new framework affects their compliance programs, internal investigation protocols and decision-making regarding self-reporting. Our experienced white collar and regulatory lawyers can assist with reviews of policies and procedures and other considerations in light of this new advisory.

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