CFTC Announces Amendments To Rules Of Practice And Rules Relating To Investigations

On December 1, 2025, Commodity Futures Trading Commission (the Commission or CFTC) Acting Chairman Caroline Pham announced a suite of changes to the Commission's Rules of Practice and the Wells process outlined in the Commission's Rules Relating to Investigations. In addition to certain technical and conforming revisions, these changes include enhancements to the process for drafting action memoranda recommending enforcement actions, extending the time period for submitting Wells notices, and additional transparency regarding the pision of Enforcement (the pision) Staff's proposed charges. These changes became effective on December 3, 2025, when they were published in the Federal Register.

As discussed below, several of the amendments around the Wells process mirror aspects of the Securities and Exchange Commission's (SEC) Wells process that were recently highlighted by Chairman Paul Atkins in an October 2025 keynote address.¹ Specifically, Chairman Atkins emphasized that the SEC requires that potential respondents receive at least four weeks for Wells submissions, disclosure of the evidentiary basis for contemplated charges (i.e., a reverse proffer) and that every submission be provided to the Commission.

These changes address some of Acting Chairman Pham's long-standing concerns with the Commission's enforcement process, including that the enforcement recommendations by pision Staff did not reflect the full investigative record, including white papers or other mitigating analysis presented by the respondent.

Revisions to Part 10 Rules of Practice

The first component of the amendments revises the Commission's Rules of Practice. The most significant amendment imposes new requirements on the action memoranda prepared by pision Staff to recommend the institution of a settled or litigation action. Under revised Section 10.108(d), these action memoranda must be objective, adhere to the rules of professional conduct, include a "comprehensive explanation of the factual and legal foundation for the recommendation," and distinguish unfavorable facts or legal precedent. Moreover, the memorandum must be supported by evidence in the investigative record (or stipulations by the parties) and the arguments in the memorandum must have legal support.

The remaining revisions to Part 10 largely memorialize existing practices or conform the existing rules in ways that will not have substantive impact for practitioners and market participants going through the enforcement process. First, the amendments revise the definition of adjudicatory proceedings under Section 10.2(b) to clarify that adjudicatory proceedings include an order issued by the Commission, Commission findings and remedial sanctions imposed by the Commission.² Second, the amendments revise Section 10.108(d) to clarify that the Commission may accept an offer of settlement by order in lieu of adjudicatory proceedings, and the Commission may do so either by Commission meeting or through the seriatim process.³ Finally, the amendments strike references to provisions no longer in effect and to communications by fax.⁴

Revisions to Part 11 Rules Relating to Investigation

The second component of the amendments revises Appendix A to Part 11 of the Rules Relating to Investigation to clarify the Commission's Wells notice process. The rules allow the pision, in its discretion, to decide whether to provide such notice to persons who may be named in a proposed enforcement proceeding. The revised Appendix A outlines the requirements for providing such notice, specifically:

1. The notice should be provided in writing where possible, and if provided orally, it should be followed by written confirmation.
2. The written notice (or confirmation of oral notice) should identify the specific charges that the pision will recommend to the Commission.
3. The pision may also refer to specific evidence that supports the basis for the recommendation. According to the adopting release, the disclosure of specific evidence "promotes transparency and enhances the pision's ability to have productive dialogues with the entity or inpidual who may be named."⁵

The revisions to Appendix A also modify the procedures around the potential respondent providing a written response to the Wells notice, specifically:

1. Potential respondents now have at least 30 days to submit a response rather than within 14 days, as previously required.
2. The pision may only require a shorter period for submissions where there is good cause and it has been approved by senior attorneys. The rules previously did not require a showing of good cause.
3. A person submitting a written response may request that it be provided to the Commission promptly. According to the adopting release, this requirement "may expedite consideration of the matter in some cases" and may inform the Commission of the matter at an earlier stage.⁶
4. All written statements will be provided to the Commission. The rule previously only required written statements to be provided to the Commission upon request.

Analysis and Implications

Together, the revisions to the CFTC rules may have meaningful impacts on the disposition of pision investigations. As reflected in her public comments, Acting Chairman Pham has had long-standing concerns about aspects of the enforcement process and whether it was providing market participants adequate process and the Commission a full and fair understanding of the record.

In particular, Acting Chairman Pham raised concerns that the pision's practice of not transmitting white papers and expert reports to the Commission, unless specifically requested to do so, "undermine[d] the Commission's ability to fairly adjudicate in its administrative proceedings on enforcement actions because of the lack of a complete administrative record."⁷ She noted that these materials were "material to the Commission's deliberation and cannot be hidden from view."⁸ The amendments to Part 10 are designed to address these concerns and ensure that the pision's action memoranda accurately reflect the administrative record, including the potential respondents' legal and factual analysis. Acting Chairman Pham also raised concerns that the pision's processes did not provide adequate time or information for potential respondents to respond to proposed charges.⁹

Going forward, these changes should impose more consistency around the Wells process and ensure that the Commission receives a full and fair characterization of the administrative record when evaluating a potential enforcement action.

Footnotes

1. Chairman Paul S. Atkins, Keynote Address at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law (Oct. 7, 2025), https://www.sec.gov/newsroom/speeches-statements/atkins-100925-keynote-address-25th-annual-aa-sommer-jr-lecture-corporate-securities-financial-law.

2. Final Rule, Amendments to CFTC Rules of Practice and Rules Relating to Investigations, 90 Fed. Reg. 55642, 55643 (Dec. 3, 2025).

3. Id.

4. Id.

5. Id.

6. Id.

7. Dissenting Statement of Commissioner Caroline D. Pham on Commercial End-User Enforcement Action (Aug. 27, 2024), https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstatement082724.

8. Id.

9. Acting Chairman Pham Announces Reforms to Wells Process, Amends Rules of Practice and Rules Relating to Investigations; (Dec. 1, 2025), https://www.cftc.gov/PressRoom/PressReleases/9144-25; Statement of Commissioner Caroline D. Pham on the Deliberative Process Privilege (Oct. 23, 2023), https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstatement102323.

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