The U.S. Commodity Futures Trading Commission (CFTC) has issued new guidance on how it will evaluate self-reporting, cooperation, and remediation efforts when considering enforcement actions, marking a significant shift in how firms and individuals can approach regulatory violations—see CFTC Release Number 9054-25.
For the first time, the CFTC’s Division of Enforcement has introduced a Mitigation Credit Matrix, which outlines how much credit firms and individuals may receive when they voluntarily disclose misconduct and cooperate with investigations. The matrix sets out presumptive penalty reductions, aiming to bring greater transparency, fairness, and consistency to the CFTC’s enforcement process.
Clearer Incentives for Self-Reporting, Cooperation, and Remediation
According to the advisory, the Division will assess self-reporting on a three-tier scale—No Self-Report, Satisfactory Self-Report, and Exemplary Self-Report—with full credit reserved for voluntary, timely, and complete disclosures made directly to the Commission. A key feature is a safe harbor for firms that discover inaccuracies in their disclosures, provided these are corrected promptly in good faith.
The new framework also sets out a four-tier scale for cooperation, ranging from No Cooperation to Exemplary Cooperation, and ties remediation efforts directly to the assessment of cooperation. The Division will consider whether firms have taken substantial steps to prevent future violations, including the potential appointment of compliance monitors or consultants to ensure undertakings are completed. The advisory also provides examples of uncooperative conduct to guide firms on expected standards of behavior.
The Mitigation Credit Matrix describes presumptive mitigation credits—as a percentage of the Division’s initial calculation of the civil monetary penalty—that a party may be eligible for if they have self-reported and/or cooperated. The presumptive credit ranges from 0% (for no self-report and no cooperation) to 55% (for exemplary self-reporting and cooperation), although the Division retains discretion to adjust these credits based on the specific facts and circumstances of a case.
Regulatory Perspective and Policy Context
Acting CFTC Chairman Caroline D. Pham emphasized that the new advisory reflects long-needed improvements to ensure lawful enforcement and alignment with broader government initiatives. “The CFTC is finally making the improvements that I have long proposed are necessary to ensure lawful enforcement, and also implements the Administration’s Executive Order,” said Pham. “From the beginning, I have encouraged firms to self-report to proactively take ownership, ensure accountability, and prevent future violations. By making the CFTC’s expectations for self-reporting, cooperation, and remediation more clear—including a first-ever matrix for mitigation credit—this advisory creates meaningful incentives for firms to come forward and get cases resolved faster with reasonable penalties.”
She also noted the broader impact on the agency’s ability to allocate resources effectively, “Critically, it will enable the CFTC to do more with less and free up enforcement resources to focus relentlessly on catching fraudsters and scammers, helping victims, and promoting market integrity. Today’s advisory gets back to basics by returning to decades of prior CFTC policy on self-reporting and is aligned with best practices for assessing penalties followed by the Department of Justice and other U.S. financial regulators. This ‘no-surprises’ approach is straightforward and demonstrates the CFTC’s renewed commitment to fair treatment under the law and principles of regulatory consistency, transparency, and clarity.”
Division of Enforcement Director Brian Young added that the goal is to encourage accountability and conserve government resources through clearer incentives for cooperation. “Our goal with this advisory is to obtain accountability while encouraging efficiency and conserving government resources by giving entities a clear reason to self-report and cooperate,” said Young. “This advisory informs both staff and the public precisely how to do that. Based on my experience in criminal practice, I believe policies that encourage transparency and cooperation yield efficiencies and better justice outcomes.”
Importantly, the advisory provides fair notice to the public and guidance designed to ensure due process in the Division’s investigations and enforcement actions. By explicitly setting out expectations and a structured credit system, the CFTC aims to foster greater certainty for firms navigating enforcement risks—while also allowing the agency to focus its enforcement attention on the most serious offenders.
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