The Commodity Futures Trading Commission (CFTC) will consider increasing its enforcement penalties in certain cases to deter future violations of commodities law and punish repeat offenders.

Defendants should also no longer assume no-admit, no-deny resolutions are the default but will instead be a part of the negotiation.

The CFTC’s Division of Enforcement issued an enforcement advisory Tuesday stating the agency will assess “appropriate penalties” to deter misconduct, which “may result in the division recommending higher penalties in resolutions than may have been imposed in similar cases previously.”

The agency said the changes are designed to discourage companies from continuing to act unlawfully, viewing penalties as the cost of doing business. Higher penalties can also benefit compliance teams at businesses receiving higher fines.

“Higher penalties may, in particular, empower compliance professionals at entities to make the business case to senior management for the resources they need to do their jobs effectively,” the advisory said.

Higher penalties will also be considered for recidivist companies, the CFTC said. Recidivism will be considered an aggravating factor and can include whether multiple violations stem from the same root cause or involved the same general subject matter, whether previous similar violations occurred recently, whether multiple violations occurred under overlapping management, whether the misconduct is pervasive and persists over time, and the “robustness and effectiveness of remediation.”

The agency will continue to consider assigning compliance monitors and consultants as part of enforcement actions, with a monitor necessary when a company has not shown it can adequately implement, test, and monitor its remediation. The CFTC will allow a firm to hire a compliance consultant, rather than being assigned a monitor, if it can show it has an adequate plan to test and monitor its remediation efforts.

In negotiations over an enforcement action, the CFTC will push more firms to admit to the underlying wrongdoing. Acceptance of responsibility promotes accountability and justice, the agency said, acts as a deterrence, and helps to facilitate post-resolution cooperation.

CFTC Enforcement Director Ian McGinley, in a speech delivered at New York University Law School on Tuesday, said the agency had been working to “dispel the myth” that it is somehow “friendly” when it comes to enforcement.

He added the CFTC is continuing to encourage firms to step forward and self-report violations and that there are clear benefits for doing so.

“If you self-report, fully cooperate, and remediate, it is likely you will receive a substantial reduction in the penalty that would otherwise be appropriate,” he said. “It is also less likely the division will recommend the imposition of a monitor.”