Rule2025-21888
Amendments to CFTC Rules of Practice and Rules Relating to Investigations
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Published
December 3, 2025
Effective
December 3, 2025
Issuing agencies
Commodity Futures Trading Commission
Abstract
The Commodity Futures Trading Commission ("CFTC" or "Commission") is amending its Rules of Practice and its Rules Relating to Investigations. The revised Rules of Practice enhance the transparency of the Commission's enforcement proceedings, specifying that the Commission can accept an offer of settlement by order of the Commission and establishing requirements for the form and content of recommendation memos provided by the Division of Enforcement to the Commission when recommending an offer of settlement. The revised Rules Relating to Investigations revise the applicable procedures when the Division of Enforcement notifies persons who may be named in an enforcement action, including that the notification or confirmation of the notice be in writing.
Full Text
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<title>Federal Register, Volume 90 Issue 230 (Wednesday, December 3, 2025)</title>
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[Federal Register Volume 90, Number 230 (Wednesday, December 3, 2025)]
[Rules and Regulations]
[Pages 55642-55646]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21888]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Parts 10 and 11
RIN 3038-AF44
Amendments to CFTC Rules of Practice and Rules Relating to
Investigations
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule.
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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or
``Commission'') is amending its Rules of Practice and its Rules
Relating to Investigations. The revised Rules of Practice enhance the
transparency of the Commission's enforcement proceedings, specifying
that the Commission can accept an offer of settlement by order of the
Commission and establishing requirements for the form and content of
recommendation memos provided by the Division of Enforcement to the
Commission when recommending an offer of settlement. The revised Rules
[[Page 55643]]
Relating to Investigations revise the applicable procedures when the
Division of Enforcement notifies persons who may be named in an
enforcement action, including that the notification or confirmation of
the notice be in writing.
DATES: This rule is effective on December 3, 2025.
FOR FURTHER INFORMATION CONTACT: James G. Wheaton, Special Counsel to
the Director of Enforcement, Division of Enforcement, at (646) 746-9752
or <a href="/cdn-cgi/l/email-protection#48223f202d293c2726082b2e3c2b662f273e"><span class="__cf_email__" data-cfemail="8fe5f8e7eaeefbe0e1cfece9fbeca1e8e0f9">[email protected]</span></a>, Commodity Futures Trading Commission, 290
Broadway 6th Floor, New York, NY 10007.
SUPPLEMENTARY INFORMATION: The Commodity Futures Trading Commission is
amending its rules of practice and its rules relating to
investigations. The Commission is authorized to promulgate this rule
under section 2(a)(12) of the Commodity Exchange Act (``the Act'').\1\
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\1\ Section 2a(11), 7 U.S.C. 2a(12), authorizes the Commission
to promulgate such rules and regulations as it deems necessary to
govern the operating procedures and conduct of the business of the
Commission.
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The revisions fall into five categories: (1) revisions in part 10
to clarify the definition of adjudicatory proceedings to include an
order by the Commission instituting proceedings pursuant to the Act,
making findings, and imposing remedial sanctions; (2) revisions to part
10 removing references to regulations that are no longer effective or
to communications by facsimile machine; (3) revisions to part 10 to
clarify that the Commission can accept an offer of settlement by an
order; (4) revisions to part 10 establishing certain requirements for
the form of the recommendation memorandum that the Division of
Enforcement (``Division'') provides to the Commission when recommending
that the Commission accept an offer of settlement; and (5) revisions to
appendix A to part 11 detailing the procedures to be used when the
Division chooses to inform persons who may be named in a proposed
enforcement proceeding of the nature of the allegations pertaining to
them as well as the procedure to be followed by such persons in
submitting a written response to the Division.
I. Revisions to Part 10 Rules of Practice
The Commission is revising part 10, Rules of Practice, in four
ways.
First, the Commission is revising the definition of adjudicatory
proceedings in Sec. 10.2(b) to clarify that adjudicatory proceedings
under the Rules of Practice include the issuance of an order by the
Commission instituting proceedings pursuant to the Act, making
findings, and imposing remedial sanctions.
Second, the Commission is revising Sec. 10.1(i) to remove a
reference to no longer effective provisions of part 13 of the
Commission's regulations.
Third, the Commission is removing references to communications by
fax from Sec. Sec. 10.4 and 10.12.
Fourth, the Commission is revising Sec. 10.108(d) to clarify that
in lieu of adjudicatory proceedings under subpart B of part 10, the
Commission may accept an offer of settlement by order instituting
proceedings pursuant to the Act, and making findings and imposing
remedial sanctions, and that the Commission can determine to accept an
offer of settlement in lieu of an adjudicatory proceeding either by
Commission meeting or by the Commission's seriatim process. To ensure
that the Commission has the information necessary to evaluate a matter,
the revisions require the Division to include certain information with
its recommendation that the Commission accept an offer of settlement.
In particular, the revisions require the Division must provide an
objective memorandum that adheres to the applicable rules of
professional conduct, provides a comprehensive explanation of the
factual and legal foundation for the recommendation, and distinguishes
unfavorable facts or legal precedents. In addition, to ensure a
complete and accurate administrative record, the Division's
recommendation memorandum must be supported by citations to evidence in
the investigative record or to stipulations by the parties, and legal
arguments must be supported by points and authorities.
II. Revisions to Part 11 Rules Relating to Investigation
Appendix A to Part 11--Informal Procedure Relating to the
Recommendation of Enforcement Proceedings
The Commission is making several revisions to this procedure, which
applies to when the Division, in its discretion, chooses to inform
persons who may be named in a proposed enforcement proceeding of the
nature of the allegations pertaining to them. While the Division can
decide whether it will provide such notice, the revised procedure
details the requirements for such notice if given. Under the revised
appendix A, the notice should be provided in writing when possible,
and, if given orally, is to be followed by written confirmation. The
revisions promote transparency to entities or individuals who may be
named in a proposed enforcement proceeding by requiring that the
written notice or confirmation of oral notice identifies the specific
charges that the Division has made preliminary determinations to
recommend to the Commission. The revisions also state that the Division
may provide information regarding the facts and circumstances that form
the basis for the recommendation by referring to specific evidence.
Establishing that the Division can choose to disclose specific evidence
learned during the investigation promotes transparency and enhances the
Division's ability to have productive dialogues with the entity or
individual who may be named.
While the Division still maintains the discretion to advise
entities or individuals who may be named that they may submit a written
statement prior to consideration of a staff recommendation, the revised
appendix A modifies the procedures surrounding such a response. The
revised appendix A provides that a potential respondent shall have at
least 30 days to submit a response, rather than having to submit within
14 days as required by the prior version of appendix A. The amended
procedures only permit the Division to require a submission be made in
a shorter period if there is both good cause and the approval of
specified senior attorneys, a change from the prior version which did
not explicitly require good cause. This revision is designed to ensure
that respondents have adequate time to respond. The revised appendix A
also states that a person submitting a written statement may request
that the statement be provided to the Commission ``promptly,'' a
requirement that may expedite consideration of the matter in some cases
and, when used, may inform the Commission about the pending matter at
an earlier stage than the previous Appendix A, which contemplated
providing respondent responses to the Commission when the Division made
its recommendation to the Commission rather than when the response was
initially received. Finally, the Revision states that all written
statements will be forwarded to the Commission, a change from the
previous version which only required that written submissions be
forwarded to the Commission upon request of the submitter. This
provision helps to ensure that the Commission has an accurate and
complete record on which to base decisions if the Division ultimately
does recommend the commencement of an enforcement action.
[[Page 55644]]
III. Related Matters
A. Notice Requirement
The Administrative Procedure Act (``APA'') \2\ requires federal
agencies to publish a notice of proposed rulemaking and provide an
opportunity for public comment before issuing a new rule. Rules are
exempt from notice and comment if they are interpretive rules, general
statements of policy, or rules of agency organization, procedure, or
practice.\3\ The Commission has determined that this exception applies.
These amendments apply to agency procedure and practice, as they
pertain to the procedures by which the Commission settles adjudicatory
proceedings, the Division of Enforcement makes settlement
recommendations to the Commission, and the Division of Enforcement, in
its discretion, makes persons aware of potential allegations against
them. Furthermore, an agency may also issue a new rule without a pre-
publication public comment period when it for ``good cause'' finds that
prior notice and comment is ``impracticable, unnecessary, or contrary
to the public interest.'' \4\ If made effective immediately, these
amendments to parts 10 and 11 will promote efficiency and facilitate
the Commission's core mission without imposing any new burden on market
participants or the public.
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\2\ 5 U.S.C. 553 et seq.
\3\ 5 U.S.C. 553(b)(3)(A).
\4\ 5 U.S.C. 553(b)(3)(B).
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act \5\ requires the Commission to
consider whether the regulations it adopts will have a significant
economic impact on a substantial number of small entities. The
Commission is obligated to conduct a regulatory flexibility analysis
for any rule for which the agency publishes a general notice of
proposed rulemaking pursuant to section 553(b) of the Administrative
Procedure Act or any other law.\6\ This rulemaking is excepted from the
public rulemaking provisions of the Administrative Procedure Act.\7\
Accordingly, the Commission is not required to conduct a regulatory
flexibility analysis for this rulemaking.
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\5\ 5 U.S.C. 601 et seq.
\6\ 5 U.S.C. 601(2).
\7\ See supra notes 3 and 4.
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C. Paperwork Reduction Act
The Paperwork Reduction Act (``PRA'') \8\ imposes certain
requirements on federal agencies in connection with their conducting or
sponsoring any collection of information. This proposed rule does not
contain any new collection of information requirements within the
meaning of the PRA. Accordingly, the requirements imposed by the PRA
are not applicable to this rule.
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\8\ 5 U.S.C. 3501 et seq.
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D. Cost-Benefit Considerations
Section 15(a) of the CEA \9\ requires the Commission to consider
the costs and benefits of its actions before promulgating a regulation
under the CEA or issuing certain orders. Section 15(a) further
specifies that the costs and benefits shall be evaluated considering
five broad areas of market and public concern: (1) Protection of market
participants and the public; (2) efficiency, competitiveness, and
financial integrity of the futures markets; (3) price discovery; (4)
sound risk management practices; and (5) other public interest
considerations. The Commission considers the costs and benefits
resulting from its discretionary determinations with respect to the
section 15(a) factors.
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\9\ 7 U.S.C. 19(a).
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The Commission may, in its discretion, give greater weight to any
of the five enumerated areas of concern, and may, in its discretion,
determine that, notwithstanding its costs, a particular rule is
necessary or appropriate to protect the public interest, or to
effectuate any of the provisions, or to accomplish any of the purposes,
of the CEA. The Commission considers the costs and benefits resulting
from its discretionary determinations with respect to the section 15(a)
factors.
The Commission identifies and considers the benefits and costs of
the final rule relative to the baseline of those generated by the
current statutory and regulatory framework applicable to the issues
addressed by this final rule, i.e., the current status quo. The
baseline is the current rules of practice in part 10 with regards to
adjudicatory proceedings and appendix A to part 11 detailing the
procedures to be used when the Division chooses to inform entities or
individuals who may be named in a proposed enforcement proceeding and
the procedures surrounding the submission of a response prior to
consideration of a staff recommendation.
As discussed above, the Commission is revising part 10 to: (1)
clarify the definition of adjudicatory proceedings to include in that
definition an order by the Commission instituting proceedings pursuant
to the Act, making findings, and imposing remedial sanctions; (2)
remove references to regulations that are no longer effective or to
communications by facsimile machine; (3) clarify that the Commission
can accept an offer of settlement by an order; (4) establish certain
requirements for the form of the recommendation memorandum that the
Division provides to the Commission when recommending that the
Commission accept an offer of settlement. In addition, the Commission
is revising appendix A to part 11 detailing the procedures to be used
when the Division chooses to inform persons who may be named in a
proposed enforcement proceeding of the nature of the allegations
pertaining to them as well as the procedure to be followed by such
persons in submitting a written response to the Division.
The proposed amendments to parts 10 and 11 relate solely to agency
organization, procedure and practice. The clarification of Sec.
10.2(b) should reduce any burdens on market participants caused by any
confusion interpreting the current definition. The amendment to Sec.
10.108 is procedural regarding internal Commission procedures and does
not impose any new burdens on outside entities. The amendment to the
part 11 appendix reduces burdens by providing more time for potential
respondents to submit responses, and by providing more clarity
regarding potential charges and evidence. Taken collectively, these
amendments will have no cost to the market or the public, and there is
only a de minimis cost for Commission staff to provide documents
already within the Division of Enforcement's control or produce a
recommendation memorandum in a particular format. The Commission has
considered the costs and benefits of this amendment and has concluded
that, with regard to the public interest consideration, the rule is
fully consistent with the public interest and with the requirements and
prohibitions of the Commodity Exchange Act.
E. Antitrust Considerations
Section 15(b) of the CEA requires the Commission to take into
consideration the public interest to be protected by the antitrust laws
and endeavor to take the least anticompetitive means of achieving the
objectives of the CEA in issuing any order or adopting any Commission
rule or regulation.\10\ The Commission does not anticipate that the
proposed amendments to parts 10 and 11 will result in anticompetitive
behavior because the Commission would simply be updating certain
internal procedures and in some cases
[[Page 55645]]
providing potential respondents to enforcement action with additional
clarity (and potentially additional time) to respond to a request from
the Division of Enforcement. Accordingly, the Commission has determined
that the amendments are not anticompetitive and have no anticompetitive
effects. Because the Commission has made this determination, the
Commission has not identified any less anticompetitive means of
achieving the purposes of the CEA.
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\10\ 7 U.S.C. 19(b).
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List of Subjects
17 CFR Part 10
Administrative practice and procedure, Commodity futures.
17 CFR Part 11
Administrative practice and procedure, Commodity futures,
Investigations, Rules relating to investigations.
For the reasons set forth in the preamble, and pursuant to the
authority contained in sections 2a and 8a of the Commodity Exchange
Act, 7 U.S.C. 2(a) and 8a, the Commodity Futures Trading Commission
amends 17 CFR chapter I as follows:
PART 10--RULES OF PRACTICE
0
1. The authority citation for part 10 continues to read as follows:
Authority: Pub. L. 93-463, sec. 101(a)(11), 88 Stat. 1391; 7
U.S.C. 2(a)(12).
0
2. In Sec. 10.1, revise paragraph (i) to read as follows:
Sec. 10.1 Scope and applicability of rules of practice.
* * * * *
(i) Public rulemaking, except as specifically made applicable by
the Rules Relating to Public Rulemaking Procedures.
* * * * *
0
3. In Sec. 10.2, revise paragraph (b) to read as follows:
Sec. 10.2 Definitions.
* * * * *
(b) Adjudicatory proceeding means a judicial-type proceeding
leading to the formulation of a final order, including an order by the
Commission instituting proceedings pursuant to the Act, making
findings, and imposing remedial sanctions;
* * * * *
0
4. Revise Sec. 10.4 to read as follows:
Sec. 10.4 Business address; hours.
The Office of Proceedings is located at the Commission's
Washington, DC headquarters. Emails must be sent to
<a href="/cdn-cgi/l/email-protection#db8b8994988484bdb2b7b2b5bca89bb8bdafb8f5bcb4ad"><span class="__cf_email__" data-cfemail="6333312c203c3c050a0f0a0d041023000517004d040c15">[email protected]</span></a>. The office is open from 8:15 a.m. to 4:45 p.m.,
Eastern Time, Monday through Friday, except on federal holidays.
0
5. In Sec. 10.12, revise paragraph (d)(1) to read as follows:
Sec. 10.12 Service and filing of documents; form and execution.
* * * * *
(d) * * *
(1) All documents which are required to be served upon a party
shall be filed concurrently with the Proceedings Clerk. A document
shall be filed by delivering it in person or by first-class mail or a
more expeditious form of United States mail or by overnight or similar
commercial delivery service to Proceedings Clerk, Office of Proceedings
at the Commission's Washington, DC headquarters; or emailing it to
<a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="2b7b79646874746d424742454c586b484d5f48054c445d">[email protected]</a> in accordance with the conditions set forth in
paragraph (a)(2) of this section.
* * * * *
0
6. In Sec. 10.108, revise paragraph (d) to read as follows:
Sec. 10.108 Settlements.
* * * * *
(d) Acceptance of offer by the Commission. The Commission will
accept an offer of settlement only by issuing its opinion and order
based on the offer. Upon issuance of the opinion and order, the
proceeding shall be terminated as to the respondent involved and so
noted on the docket by the Proceedings Clerk. In lieu of the procedure
to institute adjudicatory proceedings set forth in subpart B of this
part, the Commission may determine to accept an offer of settlement by
order instituting proceedings pursuant to the Act, making findings, and
imposing remedial sanctions, whether by Commission meeting or by
disposition of business by seriatim Commission consideration as set
forth in Sec. 140.12 of this chapter. The Division's recommendation to
accept an offer of settlement shall be set forth in an objective
memorandum to the Commission that adheres to the applicable rules of
professional conduct and provides a comprehensive explanation of the
recommendation's factual and legal foundation and distinguishes
unfavorable facts or legal precedent. To ensure an accurate and
complete administrative record, the statement of facts must be
supported by citations to evidence in the investigative record or
stipulations by the parties, and the legal argument must be supported
by points and authorities.
* * * * *
PART 11--RULES RELATING TO INVESTIGATIONS
0
7. The authority citation for part 11 continues to read as follows:
Authority: 7 U.S.C. 4a(j), 9, 12, 12a(5) and 15.
0
8. Revise appendix A to part 11 to read as follows:
Appendix A to Part 11--Informal Procedure Relating to the
Recommendation of Enforcement Proceedings
The Division of Enforcement (``Division''), in its discretion,
may inform persons who may be named in a proposed enforcement
proceeding of the nature of the allegations pertaining to them. Such
notice should be in writing when possible, and if given orally, it
should be followed promptly by a written confirmation. The written
notice or written confirmation of an oral notice should identify the
specific charges the Division has made a preliminary determination
to recommend to the Commission. The Division may also refer to
specific evidence regarding the facts and circumstances that form
the basis for the Division's recommendation. The Division, in its
discretion, may advise such persons that they may submit a written
statement prior to the consideration by the Commission of any staff
recommendation for the commencement of such proceeding. Unless for
good cause, and otherwise provided for by either the Director or a
Deputy Director of the Division, such written statements shall have
at least 30 days for submission after persons are informed by the
Division of Enforcement of the nature of the proposed allegations
pertaining to them and shall be no more than 20 pages, double spaced
on 8\1/2\ by 11 inch paper, setting forth their views of factual,
legal or policy matters relevant to the commencement of an
enforcement proceeding. Any statement of fact included in the
submission must be sworn to by a person with personal knowledge of
such fact. Statements shall be forwarded to the Director, Division
of Enforcement, at the Commission's Washington, DC headquarters,
with copies to the staff conducting the investigation, shall clearly
identify the specific investigation, and, if desired, may request
that the statement be forwarded to the Commission promptly.
Similarly, persons who become involved in an investigation, and
submit a written statement on their initiative, should follow the
relevant procedures described in this appendix. In the event the
Division recommends the commencement of an enforcement proceeding to
the Commission, the Division shall forward any such written
statement to the Commission promptly. The Commission may, in its
discretion, consider all, any portion or none of the submission when
it considers the staff recommendation to commence an enforcement
proceeding.
[[Page 55646]]
Issued in Washington, DC, on December 1, 2025, by the
Commission.
Christopher Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not appear in the Code of Federal
Regulations.
Appendix to Amendments to CFTC Rules of Practice and Rules Relating to
Investigations--Commission Voting Summary
On this matter, Acting Chairman Pham voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2025-21888 Filed 12-2-25; 8:45 am]
BILLING CODE 6351-01-P
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