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Commodity Futures Trading Commission.
Final rule.
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.
This rule is effective on January 13, 2022 and is applicable to penalties assessed after January 15, 2022.
Edward J. Riccobene, Associate Chief Counsel, Division of Enforcement, at (202) 418-5327 or ericcobene@cftc.gov, Commodity Futures Trading Commission, 1155 21st Street NW, Washington, DC 20581.
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]
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]
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 ( printed 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]
Applying the FCPIAA annual inflation adjustment methodology results in the following amended CMPs:
| Violations occurring on or after 11/02/2015 | |||||
| U.S. Code citation | Civil monetary penalty description | Penalty amount in 2021 Final Rule 1 | CPI-U multiplier | New adjusted penalty amount | |
| Civil Monetary Penalty Imposed by the Commission in an Administrative Action | |||||
| 7 U.S.C. 9 (Section 6(c) of the Commodity Exchange Act) | For any person other than a registered entity 2 | Non-Manipulation or Attempted Manipulation | $170,129 | 1.06222 | $180,714 |
| For any person other than a registered entity 2 | Manipulation or Attempted Manipulation | 1,227,202 | 1.06222 | 1,303,559 | |
| 7 U.S.C. 13a (Section 6b of the Commodity Exchange Act) | For a registered entity 2 or any of its directors, officers or employees | Non-Manipulation or Attempted Manipulation | 937,161 | 1.06222 | 995,471 |
| For a registered entity 2 or any of its directors, officers or employees | Manipulation or Attempted Manipulation | 1,227,202 | 1.06222 | 1,303,559 | |
| Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action | |||||
| 7 U.S.C. 13a-1 (Section 6c of the Commodity Exchange Act) | Any Person | Non-Manipulation or Attempted Manipulation | 187,432 | 1.06222 | 199,094 |
| Any Person | Manipulation or Attempted Manipulation | 1,227,202 | 1.06222 | 1,303,559 | |
| 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.
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]
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.
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.
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.
The Commission believes that benefits of this rulemaking greatly outweigh the costs, if any. As the Commission understands, the statutory ( printed 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.
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:
1. The authority citation for part 143 continues to read as follows:
2. Amend § 143.8 by revising paragraph (b) to read as follows:
(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:
| U.S. Code citation | Civil monetary penalty description | Date of violation and corresponding penalty | |||
|---|---|---|---|---|---|
| 10/23/2004 through 10/22/2008 | 10/23/2008 through 10/22/2012 | 10/23/2012 through 11/01/2015 | 11/02/2015 to present | ||
| Civil Monetary Penalty Imposed by the Commission in an Administrative Action | |||||
| 7 U.S.C. 9 (Section 6(c) of the Commodity Exchange Act) | For any person other than a registered entity 1 | $130,000 | $130,000 | $140,000 | $180,714 |
| 7 U.S.C. 13a (Section 6b of the Commodity Exchange Act) | For a registered entity 1 or any of its directors, officers or employees | 625,000 | 675,000 | 700,000 | 995,471 |
| Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action | |||||
| 7 U.S.C. 13a-1 (Section 6c of the Commodity Exchange Act) | Any Person | 130,000 | 140,000 | 140,000 | 199,094 |
| 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:
| U.S. Code citation | Civil monetary penalty description | Date of violation and corresponding penalty | |||
|---|---|---|---|---|---|
| 10/23/2004 through 05/21/2008 | 05/22/2008 through 08/14/2011 | 08/15/2011 through 11/01/2015 | 11/02/2015 to Present | ||
| Civil Monetary Penalty Imposed by the Commission in an Administrative Action | |||||
| 7 U.S.C. 9 (Section 6(c) of the Commodity Exchange Act) | For any person other than a registered entity 1 | $130,000 | $1,000,000 | $1,025,000 | $1,303,559 |
| 7 U.S.C. 13a (Section 6b of the Commodity Exchange Act) | For a registered entity 1 or any of its directors, officers or employees | 625,000 | 1,000,000 | 1,025,000 | 1,303,559 |
| Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action | |||||
| 7 U.S.C. 13a-1 (Section 6c of the Commodity Exchange Act) | Any Person | 130,000 | 1,000,000 | 1,025,000 | 1,303,559 |
| 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.
The following appendix will not appear in the Code of Federal Regulations.
On this matter, Chairman Behnam and Commissioner Stump voted in the affirmative. No Commissioner voted in the negative.
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.
Back to Citation2. 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.
Back to Citation3. Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, 129 Stat. 584 (2015) (2015 Act), title VII, Section 701.
Back to Citation4. FCPIAA Sections 4 and 5. See also, Adjustment of Civil Monetary Penalties for Inflation, 81 FR 41435 (June 27, 2016).
Back to Citation5. 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).
Back to Citation6. FCPIAA Section 3(2).
Back to Citation7. 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.
Back to Citation8. FCPIAA Sections 4 and 5.
Back to Citation9. FCPIAA Section 5(b)(1).
Back to Citation10. 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.
Back to Citation11. FCPIAA Section 5(a). See also, 2021 OMB Guidance at 3.
Back to Citation12. FCPIAA Section 6.
Back to Citation13. FCPIAA Section 4(b)(2).
Back to Citation14. 2021 OMB Guidance at 3-4.
Back to Citation15. Lake Carriers' Ass'n v. E.P.A., 652 F.3d 1, 10 (D.C. Cir. 2011).
Back to Citation[FR Doc. 2022-00595 Filed 1-12-22; 8:45 am]
BILLING CODE 6351-01-P