As part of an effort to reorient its approach to enforcement, the U.S. Commodity Futures Trading Commission (CFTC) issued new guidance setting out its policy on self-reporting, cooperation and remediation in its enforcement activity.
In a new advisory on Tuesday, the U.S. derivatives regulator detailed how it will treat the actions of both companies and individuals when determining whether to bring an enforcement action, and on the sanctions that it will seek in specific cases.
Among other things, the advisory sets out the rubric that the enforcement division will use to evaluate these factors, including a matrix that will guide the setting of monetary penalties — which could provide penalty discounts of up to 55% for exceptional cooperation.
With the new policy, the CFTC said that it seeks to promote compliance and ensure accountability for violators by “incentivizing self-reporting, cooperation, and remediation of potential 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,” said acting chairman of the CFTC, Caroline Pham, in a release.
This approach will “enable the CFTC to do more with less,” Pham said, adding that it is “aligned with best practices for assessing penalties followed by the Department of Justice and other U.S. financial regulators.”
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