On May 19, 2026, the Commodity Futures Trading Commission (CFTC)’s Division of Enforcement (Division) issued a new Division Policy on Cooperation (2026 Policy) establishing a revised enforcement policy for evaluating self-reporting, cooperation, remediation, restitution and/or disgorgement. The 2026 Policy rescinds and supersedes the Division’s 2025 Enforcement Advisory (2025 Advisory), providing a more structured and specific – and in some respects more rewarding – framework for registrants to self-report. The availability of a formal declination pathway for registrants that fully cooperate, remediate, and make victims whole represents a significant incentive for prompt and complete disclosure. At the same time, the elimination of the 2025 Advisory’s tiered matrix in favor of threshold requirements means that partial credit for incomplete cooperation or remediation is more limited.
Key Differences at a Glance
- Structure: The 2025 Advisory used a tiered scoring matrix (three tiers for self-reporting, four tiers for cooperation) to calculate presumptive penalty discounts. The 2026 Policy replaces that matrix with a declination-first framework built around defined threshold criteria.
- Declination Standard: The 2026 Policy introduces an affirmative declination pathway with specific, enumerated criteria. The 2025 Advisory considered declinations only in extraordinary and limited circumstances.
- Penalty Reduction Percentages: The 2025 Advisory provided presumptive discounts ranging from 0% to 55%, depending on the combination of self-reporting and cooperation tiers. The 2026 Policy provides for reductions of at least 50% in some cases or at least 25% in others, with a maximum reduction of 75% in any case.
- Restitution and Disgorgement: The 2025 Advisory excluded disgorgement and restitution from mitigation credit eligibility. The 2026 Policy makes full restitution and/or disgorgement an affirmative requirement for obtaining a declination or cooperation credit.
- Self-Reporting Requirements: The 2026 Policy imposes more detailed and specific requirements for a self-report to qualify as a “Voluntary Self-Report,” including requiring the registrant to demonstrate timeliness. The 2025 Advisory did not impose such a requirement.
- Cooperation Standard: The 2026 Policy requires “Full Cooperation” as a defined threshold concept, replacing the four-tier cooperation scale of the 2025 Advisory. The new definition includes more granular minimum requirements, such as proactive disclosure of information not specifically requested and deconfliction of internal investigations.
- Remediation: The 2026 Policy provides a significantly expanded and more detailed definition of “Timely and Appropriate Remediation,” including specific compliance program elements, record retention obligations, and individual-specific remediation measures. The 2025 Advisory treated remediation as one component of the cooperation evaluation rather than a standalone threshold requirement.
- Rescission of Prior Guidance: The 2026 Policy explicitly rescinds the 2025 Advisory and states that it serves as the Division’s exclusive policy, with a new enforcement manual to follow.
Analysis of Changes
1. From a Tiered Matrix to a Declination-First Framework
The 2025 Advisory organized its analysis around a matrix that combined self-reporting tiers (Tier 1 through Tier 3) and cooperation tiers (Tier 1 through Tier 4) to yield a presumptive percentage discount on civil monetary penalties. Under that framework, the maximum presumptive discount was 55% (achieved only with an “Exemplary Self-Report” and “Exemplary Cooperation”), and declinations were reserved for extraordinary circumstances, such as being the first person to report pervasive fraud involving multiple parties while also providing Exemplary Cooperation.
The 2026 Policy restructures the matrix into a new framework operating with three tiers of outcomes, rather than a scoring grid:
- Part I addresses full declinations, available when a registrant satisfies all four threshold criteria (Voluntary Self-Report, Full Cooperation, Timely and Appropriate Remediation, and Full Restitution and/or Disgorgement), absent aggravating circumstances.
- Part II addresses matters where a registrant acts in good faith but falls short of a declination, providing reductions of at least 50% (where self-reporting does not qualify as a Voluntary Self-Report) or at least 25% (where aggravating factors exist), with a maximum reduction of 75%.
- Part III preserves discretionary cooperation credit of up to 25% in all other matters where some cooperation, remediation, and restitution/disgorgement occurred.
This change elevates declination from a remedy available only in extraordinary circumstances to a defined outcome for registrants that satisfy the stated criteria.
2. Restitution and Disgorgement as a Prerequisite, Not an Exclusion
One of the most notable changes involves the treatment of restitution and disgorgement. The 2025 Advisory stated that “[d]isgorgement and restitution will not be eligible for Mitigation Credit” – that is, paying disgorgement or restitution would not be factored into reducing any civil monetary penalty.
The 2026 Policy reverses this approach. Full restitution and/or disgorgement is now one of four affirmative requirements for a declination under Part I and a prerequisite for cooperation credit under Parts II and III. The 2026 Policy expressly encourages registrants to make victims whole immediately, and states that the Division will give credit to registrants that proactively provide even partial restitution before a formal agreement is reached. This change incentivizes promptly compensating victims.
3. Elevated Self-Reporting Standards
The 2026 Policy’s definition of “Voluntary Self-Report” imposes a higher bar in several respects compared to the 2025 Advisory:
- The new policy places the burden of demonstrating timeliness expressly on the registrant, with an expectation that registrants will report “at the earliest possible opportunity” and not defer until a routine reporting date.
- The new policy requires a registrant to have timely fulfilled any statutory or regulatory obligation to provide related information to the CFTC or its appropriate divisions – a prerequisite not present in the prior framework.
- Notably, however, the 2026 Policy provides that a qualifying self-report remains a Voluntary Self-Report even if the CFTC already has independent knowledge of the misconduct – a more permissive standard than the 2025 Advisory, which treated information already known to the CFTC as ineligible for self-reporting consideration.
4. Expanded Cooperation and Remediation Definitions
The 2026 Policy’s definition of “Full Cooperation” is more detailed and expansive than the cooperation tiers of the 2025 Advisory. New elements include:
- Proactive identification of evidence not in the registrant’s possession or otherwise unknown to the Division;
- A requirement to deconflict internal investigative steps with Division requests, including delaying interviews when specifically requested;
- Production of overseas documents with custodian and location information; and
- Facilitation of third-party document production and provision of accurate translations of foreign-language documents.
Similarly, the “Timely and Appropriate Remediation” definition in the 2026 Policy is expanded. It now includes a requirement for a thorough root-cause analysis of the misconduct. Additionally, “Timely and Appropriate Remediation” requires implementation of an effective risk-based compliance program (including compensation that incentivizes compliance, independent compliance function with access to senior leadership, and ongoing testing and evaluation), appropriate record retention and messaging application controls, and tailored remediation requirements for individuals (such as ethics training, retention of professionals, and restrictions on business activities).
5. Aggravating Circumstances
The 2026 Policy introduces a list of aggravating circumstances that may preclude declination eligibility: pervasive intentional or reckless misconduct by ownership or senior management; intentional or reckless misconduct over an extended period; recidivist intentional or reckless misconduct; and particularly egregious aggregate harm. The 2025 Advisory did not contain a comparable list, although it noted that the Division retained discretion to consider factors such as culpability, recidivism, and severity.
In the May 19 release accompanying the 2026 Policy, Division Director of Enforcement David Miller stated, “As promised, the Division of Enforcement is issuing a new policy today to incentivize cooperation, simplify our approach to cooperation credit, and operate more fairly with parties before the division. This policy encourages good conduct from market participants and gives us another tool in our efforts to fight fraud, manipulation, and market abuse.”