[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]


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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.

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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\
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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-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).
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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 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\
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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, 2020 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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    \12\ Annual Adjustment of Civil Monetary Penalties to Reflect 
Inflation--2020, 85 FR 1747 (Jan. 13, 2020).

[[Page 7803]]



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                                     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
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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 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.
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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........  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.
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\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.
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    \13\ 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.\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\
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    \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).
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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.
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    \17\ 5 U.S.C. 601-612.
    \18\ 5 U.S.C. 603(a).
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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.
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    \19\ 44 U.S.C. 3507(d).
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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.
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    \20\ 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 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)
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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        $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.
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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......         130,000         140,000         140,000         187,432
 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      $1,227,202
 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.
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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       1,227,202
 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 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