CFTC Acting Chairman Pham Announces Effort to Quickly Resolve Recordkeeping and Reporting Investigations and Pledges Additional Guidance on Self-Reporting and Cooperation

During her keynote address at the Futures Industry Association’s International Futures Industry Conference, BOCA50, CFTC Acting Chairman Caroline D. Pham announced a new effort to encourage market participants to resolve open investigations regarding minor compliance violations with no customer harm, in order to free up Division of Enforcement (the “Division”) resources to focus on market abuse and fraud. This effort is another in a series of steps Acting Chairman Pham has taken since her appointment to provide transparency and due process in the agency's law enforcement function,[1] and to address the CFTC’s shift in “its enforcement program to focus on registration and compliance instead of the CFTC’s mission to prevent fraud, manipulation, and abuse in our markets.”[2]

Under the new effort, over the next two weeks, the Division of Enforcement (the “Division”) is inviting market participants that have open investigations with the Division regarding certain types of compliance violations to present (1) an update on the market participants’ remediation and improvement plan and (2) a “reasonable settlement offer.” Importantly, the Division will only consider such a proposal only if the violations do not involve customer harm, market abuse, concerns with transparency or fraudulent conduct, such as recordkeeping or swap data reporting violations. If the Division determines that a market participant meets these conditions, the Division will analyze civil monetary penalties for similar conduct over the last 10 years and propose an expedited settlement with a reasonable civil monetary penalty, based on the circumstances of the case. The Division anticipates market participants will be interested in this effort and plans to release official written guidance in the coming days. 

Additionally, Acting Chairman Pham indicated that the Division’s recent guidance regarding self-reporting and cooperation[3] is only the first step in the Division’s effort to provide regulatory clarity to market participants, and that the CFTC plans to issue additional guidance in the coming weeks that address how matters are referred to the Division from other CFTC operating divisions, including criteria for how those referral decisions will be made. 

[1]See Katten’s coverage of the CFTC’s Guidance on Self-Reporting and Cooperation here: https://katten.com/clearer-skies-ahead-cftc-enforcement-divisions-new-advisory-opens-doors-for-self-reporting-and-increased-cooperation.

[2]See Statement of Commissioner Caroline D. Pham on Swap Data Reporting Settlement Order and the Examination Process (Oct. 1, 2024), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstatement100124.

[3]See CFTC Div. of Enforcement, Advisory on Self-Reporting, Cooperation, and Remediation (Feb. 25, 2025)  available at https://www.cftc.gov/media/11821/EnfAdv_Resolutions022525/download.