[Federal Register Volume 90, Number 15 (Friday, January 24, 2025)]
[Rules and Regulations]
[Pages 8111-8113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01724]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 90, No. 15 / Friday, January 24, 2025 / Rules
and Regulations
[[Page 8111]]
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 143
RIN 3038-AF41
Annual Adjustment of Civil Monetary Penalties To Reflect
Inflation--2025
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 January 24, 2025 and is applicable to
penalties assessed after January 15, 2025.
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 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-25-02,
Implementation of Penalty Inflation Adjustments for 2025 (Dec. 17,
2024) (2024 OMB Guidance) (https://www.whitehouse.gov/wp-content/uploads/2024/12/M-25-02.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), 6(d), 6b, and 6c of the CEA.\7\
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\6\ FCPIAA Section 3(2).
\7\ 7 U.S.C. 9, 13a, 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 2024 CPI-U (315.664)/October 2023
CPI-U (307.671) = 1.02598.\10\ In order to complete the 2025 annual
adjustment, the CFTC must multiply each of its most recent CMP amounts
by the multiplier, 1.02598, 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 heading ``CPI
Data'' then the subheading ``Databases'', 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, 2024 OMB Guidance at 1.
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B. Civil Monetary Penalty Adjustments
Applying the FCPIAA annual inflation adjustment methodology results
in the following amended CMPs:
[[Page 8112]]
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Violations occurring on or after 11/02/2015
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U.S. Code citation Civil monetary penalty Penalty amount CPI-U New adjusted
description in 2024 multiplier penalty amount
final rule \12\
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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 Other Than $201,021 1.02598 $206,244
the Commodity Exchange Act). other than a Manipulation
registered or Attempted
entity \1\. Manipulation.
For any person Manipulation or 1,450,040 1.02598 1,487,712
other than a Attempted
registered Manipulation.
entity \1\.
7 U.S.C. 13a (Section 6b of For a registered Other Than 1,107,332 1.02598 1,136,100
the Commodity Exchange Act). entity \1\ or Manipulation
any of its or Attempted
directors, Manipulation.
officers or
employees.
For a registered Manipulation or 1,450,040 1.02598 1,487,712
entity \1\ 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...... Other Than 221,466 1.02598 227,220
the Commodity Exchange Act). Manipulation
or Attempted
Manipulation.
Any Person...... Manipulation or 1,450,040 1.02598 1,487,712
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, 2025, 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\ Annual Adjustment of Civil Monetary Penalties to Reflect
Inflation--2024, 89 FR 4542 (Jan. 24, 2024); https://www.cftc.gov/sites/default/files/2024/01/2024-01341a.pdf.
\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 notice and comment process the
APA generally requires--i.e., 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\ 2024 OMB Guidance at 4.
\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 (RFA) \17\ requires agencies with
rulemaking authority to consider the impact of certain of their rules
on small businesses. In relevant part, the RFA requires a regulatory
flexibility analysis 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
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. 601(2), 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 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 Commission amends
part 143 of chapter I of title 17 of the Code of Federal Regulations as
follows:
[[Page 8113]]
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) 2025 Inflation adjustment. The maximum amount of each civil
monetary penalty in the following charts applies to penalties assessed
after January 15, 2025:
(1) For violations other than manipulation or attempted
manipulation:
Table 1 to Paragraph (b)(1)
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Date of violation and corresponding penalty
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U.S. Code citation Civil monetary 10/23/2004 10/23/2008 10/23/2012
penalty description through 10/ through 10/ through 11/ 11/02/2015
22/2008 22/2012 01/2015 to 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 the For any person other $130,000 $140,000 $140,000 $206,244
Commodity Exchange Act). than a registered
entity \1\.
7 U.S.C. 13a (Section 6b of the For a registered 625,000 675,000 700,000 1,136,100
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 the Any Person.......... 130,000 140,000 140,000 227,220
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
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U.S. Code citation Civil monetary 10/23/2004 05/22/2008 08/15/2011
penalty description through 05/ through 08/ through 11/ 11/02/2015
21/2008 14/2011 01/2015 to 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 the For any person other $130,000 $1,000,000 $1,025,000 $1,487,712
Commodity Exchange Act). than a registered
entity \1\.
7 U.S.C. 13a (Section 6b of the For a registered 625,000 1,000,000 1,025,000 1,487,712
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 the Any Person.......... 130,000 1,000,000 1,025,000 1,487,712
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 21, 2025, 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 Annual Adjustment of Civil Monetary Penalties To Reflect
Inflation--2025--Commission Voting Summary
On this matter, Chairman Behnam and Commissioners Johnson,
Goldsmith Romero, Mersinger, and Pham voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2025-01724 Filed 1-23-25; 8:45 am]
BILLING CODE 6351-01-P