Financial Business handshake for teamwork of business merger and
Listen to this post

On May 19, 2026, the Commodity Futures Trading Commission’s (CFTC) Division of Enforcement (Division) issued CFTC Letter No. 26-15, a staff advisory establishing a comprehensive new policy on self-reporting, cooperation, and remediation. The policy creates clear incentives for proactive compliance and early disclosure of potential misconduct.

The Path to a Declination

The Division will not recommend enforcement action for violations of the Commodity Exchange Act (CEA) and/or CFTC Regulations when all the following factors are met:

  • The party made a Voluntary Self-Report to the CFTC;
  • The party provided Full Cooperation during the Division’s investigation;
  • The party effected Timely and Appropriate Remediation of the misconduct;
  • The party provided Full Restitution and/or Disgorgement, if applicable; and
  • There are no aggravating circumstances that preclude eligibility such as pervasive, intentional, or reckless misconduct by ownership or senior management, misconduct occurring over an extended period, recidivist conduct, or particularly egregious aggregate harm.

Penalty Reductions When a Declination Is Not Available

Not every situation will qualify for a full declination, but the policy still provides meaningful relief for parties that cooperate. If a party provided Full Cooperation, Remediation, and Full Restitution and/or Disgorgement, but is ineligible for a declination because the self-report did not qualify as a Voluntary Self-Report, the Division will recommend a civil monetary penalty reduction of at least 50 percent. Where aggravating factors preclude a declination, the reduction is at least 25 percent. The maximum recommended reduction is no more than 75 percent.

Even if a party does not qualify for any of the above reductions, the Division may still recommend up to a 25-percent reduction based on the facts and circumstances. In any case, the party must engage in Timely and Appropriate Remediation and provide Full Restitution and/or Disgorgement.

Key Definitions

The new Policy sets out detailed definitions for each of its four core requirements. Highlights include:

  • Voluntary Self-Report: A report must be made before any known or reasonably anticipated imminent threat of disclosure through a whistleblower, the media, or other channels, or before any anticipated investigation by an exchange, self-regulatory organization, or state or federal governmental entity. Parties must disclose misconduct within a reasonably prompt time after becoming aware of it and may not defer disclosure until a routine or periodic reporting date. Importantly, the Division will provide a safe harbor and will not recommend charges under certain CEA provisions for a self-report that is later found to be inaccurate, provided the report was made in good faith and any inaccuracies are corrected promptly upon discovery.
  • Full Cooperation: Full Cooperation requires timely disclosure of all non-privileged, relevant information, including information gathered during any internal investigation, and identification of all individuals involved in the misconduct regardless of position, status, or seniority. Parties must also cooperate proactively by disclosing relevant information even when not specifically requested. The Division will take into consideration the size, sophistication, and financial condition of the cooperating party when assessing the scope and quality of cooperation.
  • Timely and Appropriate Remediation: Parties must conduct a thorough root-cause analysis of the misconduct and implement remediation measures designed to address those root causes. Parties must also implement an effective compliance and ethics program calibrated to the size and resources of the organization. Critically, parties must implement appropriate record-retention measures, including policies prohibiting the improper destruction of business records and adequate controls over the use of personal devices and ephemeral messaging platforms.
  • Full Restitution and/or Disgorgement: Parties must create or implement a plan to provide full restitution to those harmed, and the Division encourages parties to make victims whole immediately. Credit will also be given for proactive partial restitution made before a formal plan is agreed upon. Where applicable, parties must also disgorge all ill-gotten gains.

What This Means for Market Participants

The Division’s policy is designed to incentivize registrants and market participants to invest in effective compliance programs, voluntarily self-report potential misconduct, and make good-faith efforts to remediate wrongdoing. Accordingly, entities and individuals subject to CFTC oversight should consider establishing a procedure to elevate significant internal compliance issues to an individual or group responsible for evaluating potential early disclosure to the CFTC. Too often potential self-reports become mired in internal investigations without a thorough evaluation of the merits of early self-reporting. The policy rewards those who have already done the internal work when a problem surfaces. Second, the timing and completeness of a self-report are central to whether the Division will treat it as a qualifying Voluntary Self-Report so if misconduct is discovered, it pays to move quickly. Third, there is no need to wait for a perfect picture before disclosing potential wrongdoing. The policy provides safe harbor for good faith but inadvertently inaccurate self-reports remove a key barrier to prompt reporting. Finally, cooperation must be genuine and comprehensive, including candid identification of responsible individuals at all levels of an organization.