Annual Adjustment of Civil Monetary Penalties to Reflect Inflation-2022

Citation87 FR 2033
Record Number2022-00595
Published date13 January 2022
SectionRules and Regulations
CourtCommodity Futures Trading Commission
Federal Register, Volume 87 Issue 9 (Thursday, January 13, 2022)
[Federal Register Volume 87, Number 9 (Thursday, January 13, 2022)]
                [Rules and Regulations]
                [Pages 2033-2035]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-00595]
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                COMMODITY FUTURES TRADING COMMISSION
                17 CFR Part 143
                RIN 3038-AF10
                Annual Adjustment of Civil Monetary Penalties to Reflect
                Inflation--2022
                AGENCY: Commodity Futures Trading Commission.
                ACTION: Final rule.
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                SUMMARY: The Commodity Futures Trading Commission (Commission) is
                amending Rule 143.8, 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 January 13, 2022 and is applicable to
                penalties assessed after January 15, 2022.
                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\
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                 \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-22-07,
                Implementation of Penalty Inflation Adjustments for 2022, Pursuant
                to the Federal Civil Penalties Inflation Adjustment Act Improvements
                Act of 2015 (Dec. 15, 2021) (2021 OMB Guidance) (https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-07.pdf).
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                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\
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                 \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.
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                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
                [[Page 2034]]
                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 2021 CPI-U (276.589)/October 2020 CPI-U
                (260.388) = 1.06222.\10\ In order to complete the 2022 annual
                adjustment, the CFTC must multiply each of its most recent CMP amounts
                by the multiplier, 1.06222, and round to the nearest dollar.\11\
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                 \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, 2021 OMB Guidance at 3.
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                B. Civil Monetary Penalty Adjustments
                 Applying the FCPIAA annual inflation adjustment methodology results
                in the following amended CMPs:
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                 Violations occurring on or after 11/02/2015
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                U.S. Code citation Civil monetary penalty Penalty CPI-U New adjusted
                 description amount multiplier penalty
                 in 2021 amount
                 Final Rule \1\
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                 Civil Monetary Penalty Imposed by the Commission in an Administrative Action
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                7 U.S.C. 9 (Section 6(c) of For any person Non- $170,129 1.06222 $180,714
                 the Commodity Exchange Act). other than a Manipulation
                 registered or Attempted
                 entity \2\. Manipulation.
                 For any person Manipulation or 1,227,202 1.06222 1,303,559
                 other than a Attempted
                 registered Manipulation.
                 entity \2\.
                7 U.S.C. 13a (Section 6b of For a registered Non- 937,161 1.06222 995,471
                 the Commodity Exchange Act). entity \2\ or Manipulation
                 any of its or Attempted
                 directors, Manipulation.
                 officers or
                 employees.
                 For a registered Manipulation or 1,227,202 1.06222 1,303,559
                 entity \2\ or Attempted
                 any of its Manipulation.
                 directors,
                 officers or
                 employees.
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                 Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
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                7 U.S.C. 13a-1 (Section 6c of Any Person...... Non- 187,432 1.06222 199,094
                 the Commodity Exchange Act). Manipulation
                 or Attempted
                 Manipulation.
                 Any Person...... Manipulation or 1,227,202 1.06222 1,303,559
                 Attempted
                 Manipulation.
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                \1\ Annual Adjustment of Civil Monetary Penalties to Reflect Inflation--2021, 86 FR 7802 (Feb. 2, 2021).
                \2\ 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.\12\ Thus,
                the new CMP amounts established by this rulemaking shall apply to
                penalties assessed after January 15, 2022, for violations that occurred
                on or after November 2, 2015, the effective date of the FCPIAA
                amendment requiring annual adjustments, the 2015 Act.
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                 \12\ FCPIAA Section 6.
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                IV. Administrative Compliance
                A. Notice Requirement
                 The FCPIAA specifically exempted from the Administrative Procedure
                Act (APA) the rulemakings required to implement annual inflation
                adjustments.\13\ 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.\14\ 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.\15\
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                 \13\ FCPIAA Section 4(b)(2).
                 \14\ 2021 OMB Guidance at 3-4.
                 \15\ Lake Carriers' Ass'n v. E.P.A., 652 F.3d 1, 10 (D.C. Cir.
                2011).
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                B. Regulatory Flexibility Act
                 The Regulatory Flexibility Act \16\ 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 rule(s) for which the agency publishes a general notice of proposed
                rulemaking pursuant to section 553(b) or any other law.\17\ 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 143.8, the Commission
                additionally is not obligated to conduct a regulatory flexibility
                analysis.
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                 \16\ 5 U.S.C. 601-612.
                 \17\ 5 U.S.C. 603(a).
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                C. Paperwork Reduction Act
                 The Paperwork Reduction Act of 1995 (PRA),\18\ 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.
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                 \18\ 44 U.S.C. 3507(d).
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                D. Consideration of Costs and Benefits
                 Section 15(a) of the CEA \19\ 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.
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                 \19\ 7 U.S.C. 19(a).
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                 The Commission believes that benefits of this rulemaking greatly
                outweigh the costs, if any. As the Commission understands, the
                statutory
                [[Page 2035]]
                provisions by which it is making cost-of-living adjustments to the CMPs
                in Rule 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
                 Claims, Penalties.
                 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:
                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, 9a, 12a(5), 13a, 13a-1(d), 13(a), 13b; 31
                U.S.C. 3701-3720E; 28 U.S.C. 2461 note.
                0
                2. Amend Sec. 143.8 by revising paragraph (b) to read as follows:
                Sec. 143.8 Inflation-adjusted civil monetary penalties.
                * * * * *
                 (b) 2022 Inflation adjustment. The maximum amount of each civil
                monetary penalty in the following charts applies to penalties assessed
                after January 15, 2022:
                 (1) For Non-Manipulation or Attempted Manipulation Violations:
                 Table 1 to Paragraph (b)(1)
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                 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
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                 Civil Monetary Penalty Imposed by the Commission in an Administrative Action
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                7 U.S.C. 9 (Section 6(c) of For any person $130,000 $130,000 $140,000 $180,714
                 the Commodity Exchange Act). other than a
                 registered
                 entity \1\.
                7 U.S.C. 13a (Section 6b of For a registered 625,000 675,000 700,000 995,471
                 the Commodity Exchange Act). entity \1\ or
                 any of its
                 directors,
                 officers or
                 employees.
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                 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...... 130,000 140,000 140,000 199,094
                 the Commodity Exchange Act).
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                \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)
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                 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
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                 Civil Monetary Penalty Imposed by the Commission in an Administrative Action
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                7 U.S.C. 9 (Section 6(c) of For any person $130,000 $1,000,000 $1,025,000 $1,303,559
                 the Commodity Exchange Act). other than a
                 registered
                 entity \1\.
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                7 U.S.C. 13a (Section 6b of For a registered 625,000 1,000,000 1,025,000 1,303,559
                 the Commodity Exchange Act). entity \1\ or
                 any of its
                 directors,
                 officers or
                 employees.
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                 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 1,303,559
                 the Commodity Exchange Act).
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                \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 10, 2022, by the
                Commission.
                Robert Sidman
                Deputy Secretary of the Commission.
                 Note: The following appendix will not appear in the Code of
                Federal Regulations.
                Appendix to Adjustment of Civil Monetary Penalties for Inflation--
                2022--Commission Voting Summary
                 On this matter, Chairman Behnam and Commissioner Stump voted in
                the affirmative. No Commissioner voted in the negative.
                [FR Doc. 2022-00595 Filed 1-12-22; 8:45 am]
                BILLING CODE 6351-01-P
                

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