[Federal Register Volume 91, Number 128 (Tuesday, July 7, 2026)]
[Notices]
[Pages 41722-41723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-13629]
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SECURITIES AND EXCHANGE COMMISSION
[Release Nos. 33-11428; 34-105832; IA-6977; IC-36237]
No Adjustment to Civil Monetary Penalty Amounts
AGENCY: Securities and Exchange Commission.
ACTION: Notice that maximum civil monetary penalties will not increase
for inflation in the 2026 calendar year.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
publishing this notice (``Notice'') pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (``2015
Act''). This Act requires all agencies to annually adjust for inflation
the civil monetary penalties that may be imposed under the statutes
administered by the agency and publish the adjusted amounts in the
Federal Register. This Notice informs the public that, in accordance
with the April 17, 2026, guidance from the Office of Management and
Budget (``OMB''), there will be no inflation adjustment for 2026. The
maximum inflation-adjusted civil monetary penalty amounts published in
January 2025 for penalties under the Securities Act of 1933
(``Securities Act''), the Securities Exchange Act of 1934 (``Exchange
Act''), the Investment Company Act of 1940 (``Investment Company
Act''), the Investment Advisers Act of 1940 (``Advisers Act''), and
certain penalties under the Sarbanes-Oxley Act of 2002 will continue to
apply to all civil monetary penalties imposed after January 15, 2025,
for violations of the aforementioned statutes that occurred after
November 2, 2015.
FOR FURTHER INFORMATION CONTACT: Stephen Ng, Senior Special Counsel,
Office of the General Counsel, at (202) 551-7957, or Hannah Riedel,
Senior Counsel, Office of the General Counsel, at (202) 551-7918.
SUPPLEMENTARY INFORMATION:
I. Background
This Notice is being published pursuant to the 2015 Act,\1\ which
amended the Federal Civil Penalties Inflation Adjustment Act of
1990.\2\ The 2015 Act requires that agencies use a specific formula to
calculate the maximum inflation-adjusted amounts of civil monetary
penalties they administer on an annual basis and publish these new
amounts in the Federal Register by January 15th of each year.\3\ The
Commission published the first annual adjustment required by the 2015
Act on January 6, 2017 (``2017 Adjustment'').\4\
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\1\ Public Law 114-74 Sec. 701, 129 Stat. 599-601 (Nov. 2,
2015), codified at 28 U.S.C. 2461 note.
\2\ Public Law 101-410, 104 Stat. 890-892 (1990), codified at 28
U.S.C. 2461 note. The Inflation Adjustment Act previously had been
amended by the Debt Collection Improvement Act of 1996 (``DCIA'') to
require that each Federal agency adopt regulations at least once
every four years that adjust for inflation the civil penalties that
may be imposed under the statutes administered by the agency. Public
Law 104-134, Title III, Sec. 31001(s)(1), 110 Stat. 1321-373 (1996),
codified at 28 U.S.C. 2461 note.
\3\ 28 U.S.C. 2461 note Sec. 4. The 2015 Act replaced the
formula prescribed in the DCIA with a new formula for calculating
the inflation-adjusted amount of relevant civil monetary penalties.
\4\ Release Nos. 33-10276; 34-79749; IA-4599; IC-32414
(effective Jan. 18, 2017). As part of the 2017 Adjustment, the
Commission promulgated 17 CFR 201.1001(a) and Table I to Subsection
1001, which lists the penalty amounts for all violations that
occurred on or before November 2, 2015. For violations occurring
after November 2, 2015, Subsection 1001(b) provides that the
applicable penalty amounts will be adjusted annually based on the
formula set forth in the 2015 Act. Subsection 1001(b) further
provides that these adjusted amounts will be published in the
Federal Register and on the Commission's website.
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Since 2017, the Commission has published annual adjustments as
required by the 2015 Act, the most recent of which was published on
January 7, 2025 (``2025 Adjustment'').\5\ The annual adjustments apply
to the civil monetary penalty provisions contained in four statutes
administered by the Commission: the Securities Act, the Exchange Act,
the Investment Company Act, and the Investment Advisers Act.\6\ In
addition, the Sarbanes-Oxley Act provides the Public Company Accounting
Oversight Board (``PCAOB'') authority to levy civil monetary penalties
in its disciplinary proceedings.\7\ Penalties assessed by the PCAOB in
its disciplinary proceedings are penalties ``enforced'' by the
Commission for purposes of the 2015 Act.\8\
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\5\ Release Nos. 33-11350; 34-102134; IA-6808; IC-35442
(effective Jan. 15, 2025).
\6\ See 28 U.S.C. 2461 note Sec. 3(2).
\7\ 15 U.S.C. 7215(c)(4)(D).
\8\ The Commission may by order affirm, modify, remand, or set
aside sanctions, including civil monetary penalties, imposed by the
PCAOB. See Sarbanes-Oxley Act of 2002, 15 U.S.C. 7217(c).
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II. Cancellation of 2026 Penalty Inflation Adjustment
Since 2017, the Commission has, as provided in the 2015 Act,
annually adjusted these maximum civil penalties for inflation by
increasing them by a multiplier (``CPI-U Multiplier'') that represents
the percentage change between the Consumer Price Index for all Urban
Consumers (``CPI-U'') from the Bureau of Labor Statistics (``BLS'') for
October of the prior year and October of the year directly preceding
the January adjustment.\9\ OMB provides the CPI-U Multiplier to Federal
agencies in an annual memorandum.\10\ The Commission adjusted civil
monetary penalty amounts for 2025 Adjustment by multiplying the amounts
in its previous adjustment by the CPI-U Multiplier and then rounding to
the nearest dollar.\11\
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\9\ See 28 U.S.C. 2461 note Sec. 5.
\10\ Id. Sec. 7(a) (requiring OMB to issue annual guidance to
agencies on implementing the inflation adjustments required under
the 2015 Act); OMB, M-16-06, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (Feb.
24, 2016), at 4, available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2016/m-16-06.pdf
(indicating that OMB will issue annual adjustment rate guidance).
\11\ See Release Nos. 33-11350; 34-102134; IA-6808; IC-35442
(effective Jan. 15, 2025), at 5-7. The CPI-U Multiplier for the 2025
Adjustment was 1.02598. See OMB, M-25-02, Implementation of Penalty
Inflation Adjustments for 2025, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (Dec.
17, 2024), available at available at https://www.whitehouse.gov/wp-content/uploads/2024/12/M-25-02.pdf.
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Due to a lapse in appropriations from October 1, 2025, until
November 12, 2025, BLS was unable to produce the October 2025 CPI-U
data. As a result, there was no inflation adjustment multiplier for
2026, which is needed to adjust civil monetary penalties for the 2026
calendar year under the 2015 Act. On April 17, 2026, OMB issued
Memorandum M-26-11 informing agencies of the cancellation of the
inflation adjustment for 2026.\12\ Accordingly, the Commission will
continue using the maximum civil monetary penalties as adjusted for
inflation by the 2025 Adjustment for all penalties imposed after
January 15, 2025, for violations that occurred after November 2,
2015.\13\ For violations that
[[Page 41723]]
occurred on or before November 2, 2015, the penalty amounts in Table I
to 17 CFR 201.1001 continue to apply.\14\
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\12\ See OMB, M-26-11, Cancellation of Penalty Inflation
Adjustments for 2026, Regarding the Federal, Civil Penalties
Inflation Adjustment Act Improvements Act of 2015 (Apr. 17, 2026),
available at https://www.whitehouse.gov/wp-content/uploads/2026/04/M-26-11-Cancellation-of-Penalty-Inflation-Adjustments-for-2026-Regarding-the-Federal-Civil-Penalties-Inflation-Adjustment-Act-Improvements-Act-of-2015.pdf.
\13\ The maximum civil penalty amounts from the 2025 Adjustment
are available in the Federal Register, 90 FR 2767 (published Jan.
13, 2025), and on the Commission's website, available at https://www.sec.gov/files/civil-penalties-inflation-adjustments-011525.pdf.
\14\ 17 CFR 201.1001(a).
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By the Commission.
Dated: July 1, 2026.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-13629 Filed 7-6-26; 8:45 am]
BILLING CODE 8011-01-P