2021-00897
Federal Register, Volume 86 Issue 20 (Tuesday, February 2, 2021)
[Federal Register Volume 86, Number 20 (Tuesday, February 2, 2021)]
[Rules and Regulations]
[Pages 7802-7804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00897]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 143
RIN 3038-AE97
Annual Adjustment of Civil Monetary Penalties To Reflect
Inflation--2021
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (Commission) is
amending its rule that governs the maximum amount of civil monetary
penalties imposed under the Commodity Exchange Act (CEA), to adjust for
inflation. This rule sets forth the maximum, inflation-adjusted dollar
amount for civil monetary penalties (CMPs) assessable for violations of
the CEA and Commission rules, regulations and orders thereunder. The
rule, as amended, implements the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended.
DATES: This rule is effective on February 2, 2021 and is applicable to
penalties assessed after January 15, 2021.
FOR FURTHER INFORMATION CONTACT: Edward J. Riccobene, Associate Chief
Counsel, Division of Enforcement, at (202) 418-5327 or
[email protected], Commodity Futures Trading Commission, 1155 21st
Street NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act of 1990
(FCPIAA) \1\ requires the head of each Federal agency to periodically
adjust for inflation the minimum and maximum amount of CMPs provided by
law within the jurisdiction of that agency.\2\ A 2015 amendment to the
FCPIAA \3\ required agencies to make an initial ``catch-up'' adjustment
to its civil monetary penalties effective no later than August 1,
2016.\4\ For every year thereafter effective not later than January
15th, the FCPIAA, as amended, requires agencies to make annual
adjustments for inflation, with guidance from the Director of the
Office of Management and Budget.\5\
---------------------------------------------------------------------------
\1\ The FCPIAA, Public Law 101-410 (1990), as amended, is
codified at 28 U.S.C. 2461 note. The FCPIAA states that the purpose
of the FCPIAA is to establish a mechanism that shall (1) allow for
regular adjustment for inflation of civil monetary penalties; (2)
maintain the deterrent effect of civil monetary penalties and
promote compliance with the law; and (3) improve the collection by
the Federal Government of civil monetary penalties.
\2\ For the relevant CMPs within the Commission's jurisdiction,
the Act provides only for maximum amounts that can be assessed for
each violation of the Act or the rules, regulations and orders
promulgated thereunder; the Act does not set forth any minimum
penalties. Therefore, the remainder of this release will refer only
to CMP maximums.
\3\ Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, Public Law 114-74, 129 Stat. 584 (2015)
(2015 Act), title VII, Section 701.
\4\ FCPIAA Sections 4 and 5. See also, Adjustment of Civil
Monetary Penalties for Inflation, 81 FR 41435 (June 27, 2016).
\5\ FCPIAA Sections 4 and 5. See also, Executive Office of the
President, Office of Management and Budget Memorandum, M-21-10,
Implementation of Penalty Inflation Adjustments for 2021, Pursuant
to the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (Dec. 23, 2020) (2020 OMB Guidance) (https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf).
---------------------------------------------------------------------------
II. Commodity Exchange Act Civil Monetary Penalties
The following sections of the CEA provide for CMPs that meet the
FCPIAA definition \6\ and these CMPs are, therefore, subject to the
inflation adjustment: Sections 6(c), 6b, and 6c of the CEA.\7\
---------------------------------------------------------------------------
\6\ FCPIAA Section 3(2).
\7\ 7 U.S.C. 9, 13a-1, 13b. Criminal authorities may also seek
fines for criminal violations of the CEA (see 7 U.S.C. 13, 13(c),
13(d), 13(e), and 13b). The FCPIA does not affect the amounts of
these criminal penalties.
---------------------------------------------------------------------------
III. Annual Inflation Adjustment for Commodity Exchange Act Civil
Monetary Penalties
A. Methodology
The FCPIAA annual inflation adjustment, in the context of the
CFTC's CMPs, is determined by increasing the maximum penalty by a
``cost-of-living adjustment'' rounded to the nearest multiple of one
dollar.\8\ Annual inflation adjustments are based on the percent change
between the October Consumer Price Index for all Urban Consumers (CPI-
U) preceding the date of the adjustment, and the prior year's October
CPI-U.\9\ In this case, the October 2020 CPI-U (260.388)/October 2019
CPI-U (257.346) = 1.01182.\10\ In order to complete the 2021 annual
adjustment, the CFTC must multiply each of its most recent CMP amounts
by the multiplier, 1.01182, and round to the nearest dollar.\11\
---------------------------------------------------------------------------
\8\ FCPIAA Sections 4 and 5.
\9\ FCPIAA Section 5(b)(1).
\10\ The CPI-U is published by the Department of Labor.
Interested parties may find the relevant Consumer Price Index on the
internet. To access this information, go to the Consumer Price Index
Home Page at: http://www.bls.gov/cpi/. Click the ``CPI Data/
Databases'' heading, and select ``All Urban Consumers (Current
Series)'', ``Top Picks.'' Then check the box for ``U.S. city
average, All items--CUUR0000SA0'', and click the ``Retrieve data''
button.
\11\ FCPIAA Section 5(a). See also, 2020 OMB Guidance at 3.
---------------------------------------------------------------------------
B. Civil Monetary Penalty Adjustments
Applying the FCPIAA annual inflation adjustment methodology results
in the following amended CMPs:
---------------------------------------------------------------------------
\12\ Annual Adjustment of Civil Monetary Penalties to Reflect
Inflation--2020, 85 FR 1747 (Jan. 13, 2020).
[[Page 7803]]
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Violations occurring on or after 11/02/2015
-----------------------------------------
U.S. Code citation Civil monetary penalty description Penalty ............ New
amount in CPI-U adjusted
2020 final multiplier penalty
rule \12\ amount
----------------------------------------------------------------------------------------------------------------
Civil Monetary Penalty Imposed by the Commission in an Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of the For any person Non-Manipulation $168,142 1.01182 $170,129
Commodity Exchange Act). other than a or Attempted
registered entity Manipulation.
\1\.
For any person Manipulation or 1,212,866 1.01182 1,227,202
other than a Attempted
registered entity Manipulation.
\1\.
7 U.S.C. 13a (Section 6b of the For a registered Non-Manipulation 926,213 1.01182 937,161
Commodity Exchange Act). entity \1\ or any or Attempted
of its directors, Manipulation.
officers or
employees.
For a registered Manipulation or 1,212,866 1.01182 1,227,202
entity \1\ or any Attempted
of its directors, Manipulation.
officers or
employees.
----------------------------------------------------------------------------------------------------------------
Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of Any Person........ Non-Manipulation 185,242 1.01182 187,432
the Commodity Exchange Act). or Attempted
Manipulation.
Any Person........ Manipulation or 1,212,866 1.01182 1,227,202
Attempted
Manipulation.
----------------------------------------------------------------------------------------------------------------
\1\ The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).
The FCPIAA provides that any increase under the FCPIAA in a civil
monetary penalty shall apply only to civil monetary penalties,
including those whose associated violation predated such increase,
which are assessed after the date the increase takes effect.\13\ Thus,
the new CMP amounts established by this rulemaking shall apply to
penalties assessed after January 15, 2021, for violations that occurred
on or after November 2, 2015, the effective date of the FCPIAA
amendment requiring annual adjustments, the 2015 Act.
---------------------------------------------------------------------------
\13\ FCPIAA Section 6.
---------------------------------------------------------------------------
IV. Administrative Compliance
A. Notice Requirement
The FCPIAA specifically exempted from the Administrative Procedure
Act (APA) the rulemakings required to implement annual inflation
adjustments.\14\ This means that the public procedure the APA generally
requires--notice, an opportunity for comment, and a delay in effective
date--is not required for agencies to issue regulations implementing
the annual adjustment.\15\ The Commission further notes that the notice
and comment procedures of the APA do not apply to this rulemaking
because the Commission is acting herein pursuant to statutory language
that mandates that the Commission act in a nondiscretionary matter.\16\
---------------------------------------------------------------------------
\14\ FCPIAA Section 4(b)(2).
\15\ 2020 OMB Guidance at 3.
\16\ Lake Carriers' Ass'n v. E.P.A., 652 F.3d 1, 10 (D.C. Cir.
2011).
---------------------------------------------------------------------------
B. Regulatory Flexibility Act
The Regulatory Flexibility Act \17\ requires agencies with
rulemaking authority to consider the impact of certain of their rules
on small businesses. A regulatory flexibility analysis is only required
for rules for which the agency publishes a general notice of proposed
rulemaking pursuant to section 553(b) or any other law.\18\ Because, as
discussed above, the Commission is not obligated by section 553(b) or
any other law to publish a general notice of proposed rulemaking with
respect to the revisions being made to Rule Sec. 143.8, the Commission
additionally is not obligated to conduct a regulatory flexibility
analysis.
---------------------------------------------------------------------------
\17\ 5 U.S.C. 601-612.
\18\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA),\19\ which imposes
certain requirements on Federal agencies, including the Commission, in
connection with their conducting or sponsoring any collection of
information as defined by the PRA, does not apply to this rule. This
rule amendment does not contain information collection requirements
that require the approval of the Office of Management and Budget.
---------------------------------------------------------------------------
\19\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------
D. Consideration of Costs and Benefits
Section 15(a) of the CEA \20\ requires the Commission to consider
the costs and benefits of its action before issuing a new regulation.
Section 15(a) of the CEA further specifies that costs and benefits
shall be evaluated in light of five broad areas of market and public
concern: (1) Protection of market participants and the public; (2)
efficiency, competitiveness, and financial integrity of futures
markets; (3) price discovery; (4) sound risk management practices; and
(5) other public interest considerations.
---------------------------------------------------------------------------
\20\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------
The Commission believes that benefits of this rulemaking greatly
outweigh the costs, if any. As the Commission understands, the
statutory provisions by which it is making cost-of-living adjustments
to the CMPs in Rule Sec. 143.8 were enacted to ensure that CMPs do not
lose their deterrence value because of inflation. An analysis of the
costs and benefits of these adjustments were made before enactment of
the statutory provisions under which the Commission is operating, and
limit the discretion of the Commission to the extent that there are no
regulatory choices the Commission could make that would supersede the
pre-enactment analysis with respect to the five factors enumerated in
Section 15(a) of the CEA, or any other factors.
List of Subjects in 17 CFR Part 143
Civil monetary penalties, Claims.
For the reasons set forth in the preamble, the Commodity Futures
Trading Commission amends part 143 of chapter I of title 17 of the Code
of Federal Regulations as follows:
[[Page 7804]]
PART 143--COLLECTION OF CLAIMS OWED THE UNITED STATES ARISING FROM
ACTIVITIES UNDER THE COMMISSION'S JURISDICTION
0
1. The authority citation for part 143 continues to read as follows:
Authority: 7 U.S.C. 9, 15, 9a, 12a(5), 13a, 13a-1(d), 13(a),
13b; 31 U.S.C. 3701-3720E; 28 U.S.C. 2461 note.
0
2. Revise Sec. 143.8(b) to read as follows:
Sec. 143.8 Inflation-adjusted civil monetary penalties.
* * * * *
(b) 2021 Inflation adjustment. The maximum amount of each civil
monetary penalty in the following charts applies to penalties assessed
after January 15, 2021:
(1) For non-manipulation or attempted manipulation violations:
Table 1 to Paragraph (b)(1)
----------------------------------------------------------------------------------------------------------------
Date of violation and corresponding penalty
Civil monetary ---------------------------------------------------------------
U.S. Code citation penalty 10/23/2004 10/23/2008 10/23/2012
description through 10/22/ through 10/22/ through 11/01/ 11/02/2015 to
2008 2012 2015 present
----------------------------------------------------------------------------------------------------------------
Civil Monetary Penalty Imposed By The Commission In An Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of For any person $130,000 $130,000 $140,000 $170,129
the Commodity Exchange Act). other than a
registered
entity \1\.
7 U.S.C. 13a (Section 6b of For a registered 625,000 675,000 700,000 937,161
the Commodity Exchange Act). entity \1\ or
any of its
directors,
officers or
employees.
----------------------------------------------------------------------------------------------------------------
Civil Monetary Penalty Imposed By A Federal District Court In A Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of Any Person...... 130,000 140,000 140,000 187,432
the Commodity Exchange Act).
----------------------------------------------------------------------------------------------------------------
\1\The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).
(2) For manipulation or attempted manipulation violations:
Table 2 to Paragraph (b)(2)
----------------------------------------------------------------------------------------------------------------
Date of violation and corresponding penalty
Civil monetary ---------------------------------------------------------------
U.S. Code citation penalty 10/23/2004 05/22/2008 08/15/2011
description through 05/21/ through 08/14/ through 11/01/ 11/02/2015 to
2008 2011 2015 present
----------------------------------------------------------------------------------------------------------------
Civil Monetary Penalty Imposed By The Commission In An Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of For any person $130,000 $1,000,000 $1,025,000 $1,227,202
the Commodity Exchange Act). other than a
registered
entity \1\.
7 U.S.C. 13a (Section 6b of For a registered 625,000 1,000,000 1,025,000 1,227,202
the Commodity Exchange Act). entity \1\ or
any of its
directors,
officers or
employees.
----------------------------------------------------------------------------------------------------------------
Civil Monetary Penalty Imposed By A Federal District Court In A Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of Any Person...... 130,000 1,000,000 1,025,000 1,227,202
the Commodity Exchange Act).
----------------------------------------------------------------------------------------------------------------
\1\The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).
Issued in Washington, DC, on January 12, 2021, by the
Commission.
Robert Sidman,
Deputy Secretary of the Commission, Commodity Futures Trading
Commission.
Note: The following appendix will not appear in the Code of Federal
Regulations.
Appendix to Adjustment of Civil Monetary Penalties for Inflation--
2021--Commission Voting Summary
On this matter, Chairman Tarbert and Commissioners Quintenz,
Behnam, Stump, and Berkovitz voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2021-00897 Filed 2-1-21; 8:45 am]
BILLING CODE 6351-01-P