Annual Adjustment of Civil Monetary Penalties for Inflation-2017, 7643-7645 [2017-00488]
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Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Rules and Regulations
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 143
RIN 3038–AE51
Annual Adjustment of Civil Monetary
Penalties for Inflation—2017
Commodity Futures Trading
Commission.
ACTION: Interim final rule.
AGENCY:
The Commodity Futures
Trading Commission (Commission) is
amending its rule that governs the
maximum amount of civil monetary
penalties, to adjust for inflation. This
rule sets forth the maximum, inflationadjusted dollar amount for civil
monetary penalties (CMPs) assessable
for violations of the Commodity
Exchange Act (CEA) and Commission
rules, regulations and orders
thereunder. The rule, as amended,
implements the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended.
SUMMARY:
Effective Date: This interim final
rule is effective January 23, 2017.
FOR FURTHER INFORMATION CONTACT:
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.
SUPPLEMENTARY INFORMATION:
DATES:
I. Background
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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 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 act is to
establish a mechanism that (1) allows for regular
adjustment for inflation of civil monetary penalties;
(2) maintains the deterrent effect of civil monetary
penalties and promote compliance with the law;
and (3) improves 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, 2015 Act, Public Law
114–74, 129 Stat. 584 (2015), title VII, Section 701.
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1, 2016.4 For every year thereafter
effective not later than January 15, 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
II. Commodity Exchange Act Civil
Monetary Penalties
The CEA provides for CMPs that meet
the FCPIAA definition 6 and these CMPs
are, therefore, subject to the inflation
adjustment in the following instances:
Sections 6(c), 6(d), 6b, and 6c of the
CEA.7
Section 6(c) of the CEA,8 as adjusted
by the FCPIAA,9 currently sets the
maximum CMP that may be imposed by
the Commission, in a proceeding
initiated on or after August 1, 2016, on
‘‘any person (other than a registered
entity)’’ for: (1) Each violation of Section
6(c) of the CEA or any other provisions
of the Act or of the rules, regulations, or
orders of the Commission thereunder to
the greater of $152,243 or triple the
monetary gain to the violator; and (2)
any manipulation or attempted
manipulation in violation of Section
6(c) or 9(a)(2) of the CEA to the greater
of $1,098,190 or triple the monetary
gain to the violator.
Section 6(d) of the CEA,10 as adjusted
by the FCPIAA,11 currently sets the
maximum CMP that may be imposed by
the Commission, in a proceeding
initiated on or after August 1, 2016, on
‘‘any person (other than a registered
entity)’’ 12 for violations of the CEA or
any other provisions of the CEA or of
4 FCPIAA Sections 4 and 5. See also, Adjustment
of Civil Monetary Penalties for Inflation, 81 FR
41435 (June 27, 2016) (to be codified at 17 CFR
143.8).
5 FCPIAA Sections 4 and 5. See also, Executive
Office of the President, Office of Management and
Budget Memorandum, M–17–11, Implementation of
the 2017 annual adjustment pursuant to the Federal
Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (Dec. 16, 2016) available
at https://www.whitehouse.gov/sites/default/files/
omb/memoranda/2017/m-17-11_0.pdf.
6 FCPIAA Section 3(2).
7 7 U.S.C. 9, 13a, 13a–1, 13b.
8 7 U.S.C. 9.
9 See 17 CFR 143.8(a)(1)(ii).
10 7 U.S.C. 13b.
11 See 17 CFR 143.8(a)(2)(ii).
12 The term ‘‘registered entity’’ is a defined term
under the CEA. Section 1a(40) provides that the
term ‘‘registered entity’’ means (A) a board of trade
designated as a contract market under section 7 of
the act; (B) a derivatives clearing organization
registered under section 7a–1 of this act; (C) a board
of trade designated as a contract market under
section 7b–1 of the act; (D) a swap execution facility
registered under section 7b–3 of this title; (E) a
swap data repository registered under section 24a
of the act; and (F) with respect to a contract that
the Commission determines is a significant price
discovery contract, any electronic trading facility on
which the contract is executed or traded. 7 U.S.C.
1a(40).
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7643
the rules, regulations, or orders of the
Commission thereunder to the greater of
$152,243 or triple the monetary gain to
the violator.
Section 6b of the CEA 13 provides that
the Commission, in an administrative
proceeding, may impose a CMP on: (1)
Any registered entity for not enforcing
or has not enforced its rules of
government made a condition of its
designation or registration as set forth in
the CEA, or (2) any registered entity, or
any director, officer, agent, or employee
of any registered entity, for violations of
the CEA or any rules, regulations, or
orders of the Commission thereunder. In
actions initiated on or after August 1,
2016, for each violation for which a
CMP is assessed pursuant to Section 6b,
the current, FCPIAA-adjusted maximum
penalty is set at: The greater of
$1,098,190 or triple the monetary gain
to such person for manipulation or
attempted manipulation in violation of
Section 6(c), 6(d), or 9(a)(2) of the CEA;
and the greater of $838,640 or triple the
monetary gain to such person for all
other violations.14
Section 6c of the CEA 15 provides that
Commission may bring an action in the
proper district court of the United States
or the proper United States court of any
territory or other place subject to the
jurisdiction of the United States and the
court may impose on a CMP on ‘‘any
registered entity or other person’’ found
by the court to have committed any
violation of any provision of the CEA or
any rule, regulation, or order
thereunder, or is restraining trading in
any commodity for future delivery or
any swap. In actions initiated on or after
August 1, 2016, for each violation for
which a CMP is assessed pursuant to
Section 6c(d), the current, FCPIAAadjusted maximum penalty is set at: The
greater of $1,098,190 or triple the
monetary gain to such person for
manipulation or attempted
manipulation in violation of Section
6(c), 6(d), or 9(a)(2) of the CEA; and the
greater of $167,728 or triple the
monetary gain to such person for all
other violations.16
III. Annual Inflation Adjustment for
Commodity Exchange Act Civil
Monetary Penalties
A. Methodology
The annual inflation adjustment
under the FCPIAA, in the context of the
CFTC’s CMPs, is determined by
increasing the maximum penalty by a
‘‘cost-of-living adjustment,’’ rounded to
13 7
U.S.C. 13a.
CFR 143.8(a)(3)(ii).
15 7 U.S.C. 13a–1.
16 17 CFR 143.8(a)(4)(ii).
14 17
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Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Rules and Regulations
the nearest multiple of one dollar.17
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.18 In this case,
October 2016 CPI–U (241.729)/October
2015 CPI–U (237.838) = 1.01636.19 In
order to complete the 2017 annual
adjustment, the CFTC must multiply
each of its most recent CMP amounts by
the multiplier, 1.01636, and round to
the nearest dollar.
B. Civil Monetary Penalty Adjustments
Applying the FCPIAA annual
inflation adjustment methodology
results in the following amended CMPs:
Current
inflation
adjusted
CMP amount
Citation
Description
Section 6(c) of the CEA, 7 U.S.C. 9
Prohibition Regarding Manipulation and False Information [Other Violation (Non-Manipulation)].
Prohibition Regarding Manipulation and False Information [Manipulation
or Attempted Manipulation].
Manipulations or Other Violations; Cease and Desist Orders Against
Persons Other Than Registered Entities; Punishment; Misdemeanor
or Felony; Separate Offenses.
Nonenforcement of Rules of Government or Other Violations; Cease
and Desist Orders; Fines and Penalties; Imprisonment; Misdemeanor;
Separate Offenses [Other Violation (Non-Manipulation)].
Nonenforcement of Rules of Government or Other Violations; Cease
and Desist Orders; Fines and Penalties; Imprisonment; Misdemeanor;
Separate Offenses [Manipulation or Attempted Manipulation].
Enjoining or Restraining Violations [Other Violation (Non-Manipulation)]
Section 6(c) of the CEA, 7 U.S.C. 9
Section 6(d) of the CEA, 7 U.S.C.
13b.
Section 6b of the CEA, 7 U.S.C.
13a.
Section 6b of the CEA, 7 U.S.C.
13a.
Section 6c of the CEA, 7 U.S.C.
13a–1.
Section 6c of the CEA, 7 U.S.C.
13a–1.
Enjoining or Restraining Violations [Manipulation or Attempted Manipulation].
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.20 Thus, the new CMP amounts
established by this rulemaking may be
applied only in Commission
administrative or civil injunctive
enforcement proceedings that are
initiated on or after the effective date of
this amendment, January 15, 2017.
IV. Administrative Compliance
A. Notice Requirement
The notice and comment procedures
of 5 U.S.C. 553 do not apply to this
rulemaking because the Commission is
acting herein pursuant to statutory
language which mandates that the
Commission act in a nondiscretionary
matter. Lake Carriers’ Ass’n v. E.P.A.,
652 F.3d 1, 10 (D.C. Cir. 2011).21
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act 22
requires agencies with rulemaking
authority to consider the impact of
17 FCPIAA
Sections 4 and 5.
Section 5(b)(1).
19 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/. Under the
‘‘CPI Databases’’ heading, select ‘‘All Urban
Consumers (Current Series)’’, ‘‘Top Picks.’’ Then
18 FCPIAA
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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.
Because 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 regulation
143.8, the Commission additionally is
not obligated to conduct a regulatory
flexibility analysis.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA),23 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.
check the box for ‘‘U.S. All items, 1982–84 =
100¥CUUR0000SA0’’, and click the ‘‘Retrieve
data’’ button.
20 FCPIAA Section 6.
21 The Commission has determined that the
amendment to rule 143.8 is exempt from the
provisions of the Administrative Procedure Act, 5
U.S.C. 553, which generally require notice of
proposed rulemaking and provide other
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2017 Annual
inflation
adjusted
CMP amount
$152,243
$154,734
1,098,190
1,116,156
152,243
154,734
838,640
852,360
1,098,190
1,116,156
167,728
170,472
1,098,190
1,116,156
D. Consideration of Costs and Benefits
Section 15(a) of the CEA 24 requires
the Commission to consider the costs
and benefits of its action before issuing
a new regulation. Section 15(a) 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
provisions by which it is making costof-living adjustments to the CMPs in
regulation 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
opportunities for public participation, but excludes
rules of agency practice, such as those found in part
143 of the Commission’s regulations, and in
particular rule 143.8 being revised herein.
22 5 U.S.C. 601–612.
23 44 U.S.C. 3507(d).
24 7 U.S.C. 19(a).
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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), or any other factors.
List of Subjects in 17 CFR Part 143
Civil monetary penalties, Claims.
For the reasons stated in the
preamble, the Commodity Futures
Trading Commission amends part 17
CFR part 143 as follows:
PART 143—COLLECTION OF CLAIMS
OWED THE UNITED STATES ARISING
FROM ACTIVITIES UNDER THE
COMMISSION’S JURISDICTION
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.
2. Amend § 143.8 as follows:
a. Revise paragraphs (a)(1)(ii)
introductory text, (a)(2)(ii), (a)(3)(ii)
introductory text, and (a)(4)(ii)
introductory text; and
■ b. Add paragraphs (a)(1)(iii), (a)(2)(iii),
(a)(3)(iii), and (a)(4)(iii).
The revisions and additions read as
follows:
■
■
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§ 143.8 Inflation-adjusted civil monetary
penalties.
(a) * * *
(1) * * *
(ii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on August 1,
2016 through January 14, 2017:
*
*
*
*
*
(iii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on or after
January 15, 2017:
(A) For manipulation or attempted
manipulation violations, not more than
the greater of $1,116,156 or triple the
monetary gain to such person for each
such violation; and
(B) For all other violations, not more
than the greater of $154,734 or triple the
monetary gain to such person for each
such violation; and
(2) * * *
(ii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on August 1,
2016 through January 14, 2017, not
more than the greater of $152,243 or
triple the monetary gain to such person
for each such violation;
(iii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on or after
January 15, 2017, not more than the
greater of $154,734 or triple the
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monetary gain to such person for each
such violation; and
(3) * * *
(ii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on August 1,
2016 through January 14, 2017:
*
*
*
*
*
(iii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on or after
January 15, 2017:
(A) For manipulation or attempted
manipulation violations, not more than
the greater of $1,116,156 or triple the
monetary gain to such person for each
such violation; and
(B) For all other violations, not more
than the greater of $852,360 or triple the
monetary gain to such person for each
such violation; and
(4) * * *
(ii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on August 1,
2016 through January 14, 2017:
*
*
*
*
*
(iii) In an administrative proceeding
before the Commission or a civil action
in Federal court initiated on or after
January 15, 2017:
(A) For manipulation or attempted
manipulation violations, not more than
the greater of $1,116,156 or triple the
monetary gain to such person for each
such violation; and
(B) For all other violations, not more
than the greater of $170,472 or triple the
monetary gain to such person for each
such violation.
*
*
*
*
*
Issued in Washington, DC, on January 6,
2017, by the Commission.
Robert N. 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—
2017—Commission Voting Summary
On this matter, Chairman Massad and
Commissioners Bowen and Giancarlo voted
in the affirmative. No Commissioner voted in
the negative.
7645
SECURITIES AND EXCHANGE
COMMISSION
17 CFR Part 232
[Release Nos. 33–10265; 34–79519; 39–
2513; IC–32387]
Adoption of Updated EDGAR Filer
Manual
Securities and Exchange
Commission.
ACTION: Final rule.
AGENCY:
The Securities and Exchange
Commission (the Commission) is
adopting revisions to the Electronic Data
Gathering, Analysis, and Retrieval
System (EDGAR) Filer Manual and
related rules to reflect updates to the
EDGAR system. The updates are being
made primarily to support the
submission of Municipal Advisor
submission form types. The EDGAR
system is scheduled to be upgraded to
support the other functionalities on
December 12, 2016.
DATES: Effective January 23, 2017. The
incorporation by reference of the
EDGAR Filer Manual is approved by the
Director of the Federal Register as of
January 23, 2017.
FOR FURTHER INFORMATION CONTACT: In
the Division of Corporation Finance, for
questions concerning Form ABS–EE and
Regulation A submission form types,
contact Vik Sheth at (202) 551–3818; in
the Division of Trading and Markets, for
questions concerning Form MA and
Form 17–H, contact Kathy Bateman at
(202) 551–4345; and in the Division of
Economic and Risk Analysis, for
questions concerning eXtensible
Business Reporting Language (XBRL)
submissions; contact Walter Hamscher
at (202) 551–5397.
SUPPLEMENTARY INFORMATION: We are
adopting an updated EDGAR Filer
Manual, Volume I and Volume II. The
Filer Manual describes the technical
formatting requirements for the
preparation and submission of
electronic filings through the EDGAR
system.1 It also describes the
requirements for filing using
EDGARLink Online and the Online
Forms/XML Web site.
The revisions to the Filer Manual
reflect changes within Volume I entitled
EDGAR Filer Manual, Volume I:
‘‘General Information,’’ Version 25
(December 2016), and Volume II entitled
SUMMARY:
[FR Doc. 2017–00488 Filed 1–19–17; 8:45 am]
1 We originally adopted the Filer Manual on April
1, 1993, with an effective date of April 26, 1993.
Release No. 33–6986 (April 1, 1993) [58 FR 18638].
We implemented the most recent update to the Filer
Manual on September 19, 2016. See Release No. 33–
10217 (September 30, 2016) [81 FR 67118].
BILLING CODE 6351–01–P
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]]>Agencies
[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)]
[Rules and Regulations]
[Pages 7643-7645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00488]
[[Page 7643]]
=======================================================================
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 143
RIN 3038-AE51
Annual Adjustment of Civil Monetary Penalties for Inflation--2017
AGENCY: Commodity Futures Trading Commission.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (Commission) is
amending its rule that governs the maximum amount of civil monetary
penalties, to adjust for inflation. This rule sets forth the maximum,
inflation-adjusted dollar amount for civil monetary penalties (CMPs)
assessable for violations of the Commodity Exchange Act (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: Effective Date: This interim final rule is effective January 23,
2017.
FOR FURTHER INFORMATION CONTACT: 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.
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 15,
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\
---------------------------------------------------------------------------
\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 act is to establish a mechanism that (1) allows for regular
adjustment for inflation of civil monetary penalties; (2) maintains
the deterrent effect of civil monetary penalties and promote
compliance with the law; and (3) improves 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, 2015 Act, Public Law 114-74, 129 Stat. 584
(2015), 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) (to be
codified at 17 CFR 143.8).
\5\ FCPIAA Sections 4 and 5. See also, Executive Office of the
President, Office of Management and Budget Memorandum, M-17-11,
Implementation of the 2017 annual adjustment pursuant to the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015
(Dec. 16, 2016) available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
---------------------------------------------------------------------------
II. Commodity Exchange Act Civil Monetary Penalties
The CEA provides for CMPs that meet the FCPIAA definition \6\ and
these CMPs are, therefore, subject to the inflation adjustment in the
following instances: Sections 6(c), 6(d), 6b, and 6c of the CEA.\7\
---------------------------------------------------------------------------
\6\ FCPIAA Section 3(2).
\7\ 7 U.S.C. 9, 13a, 13a-1, 13b.
---------------------------------------------------------------------------
Section 6(c) of the CEA,\8\ as adjusted by the FCPIAA,\9\ currently
sets the maximum CMP that may be imposed by the Commission, in a
proceeding initiated on or after August 1, 2016, on ``any person (other
than a registered entity)'' for: (1) Each violation of Section 6(c) of
the CEA or any other provisions of the Act or of the rules,
regulations, or orders of the Commission thereunder to the greater of
$152,243 or triple the monetary gain to the violator; and (2) any
manipulation or attempted manipulation in violation of Section 6(c) or
9(a)(2) of the CEA to the greater of $1,098,190 or triple the monetary
gain to the violator.
---------------------------------------------------------------------------
\8\ 7 U.S.C. 9.
\9\ See 17 CFR 143.8(a)(1)(ii).
---------------------------------------------------------------------------
Section 6(d) of the CEA,\10\ as adjusted by the FCPIAA,\11\
currently sets the maximum CMP that may be imposed by the Commission,
in a proceeding initiated on or after August 1, 2016, on ``any person
(other than a registered entity)'' \12\ for violations of the CEA or
any other provisions of the CEA or of the rules, regulations, or orders
of the Commission thereunder to the greater of $152,243 or triple the
monetary gain to the violator.
---------------------------------------------------------------------------
\10\ 7 U.S.C. 13b.
\11\ See 17 CFR 143.8(a)(2)(ii).
\12\ The term ``registered entity'' is a defined term under the
CEA. Section 1a(40) provides that the term ``registered entity''
means (A) a board of trade designated as a contract market under
section 7 of the act; (B) a derivatives clearing organization
registered under section 7a-1 of this act; (C) a board of trade
designated as a contract market under section 7b-1 of the act; (D) a
swap execution facility registered under section 7b-3 of this title;
(E) a swap data repository registered under section 24a of the act;
and (F) with respect to a contract that the Commission determines is
a significant price discovery contract, any electronic trading
facility on which the contract is executed or traded. 7 U.S.C.
1a(40).
---------------------------------------------------------------------------
Section 6b of the CEA \13\ provides that the Commission, in an
administrative proceeding, may impose a CMP on: (1) Any registered
entity for not enforcing or has not enforced its rules of government
made a condition of its designation or registration as set forth in the
CEA, or (2) any registered entity, or any director, officer, agent, or
employee of any registered entity, for violations of the CEA or any
rules, regulations, or orders of the Commission thereunder. In actions
initiated on or after August 1, 2016, for each violation for which a
CMP is assessed pursuant to Section 6b, the current, FCPIAA-adjusted
maximum penalty is set at: The greater of $1,098,190 or triple the
monetary gain to such person for manipulation or attempted manipulation
in violation of Section 6(c), 6(d), or 9(a)(2) of the CEA; and the
greater of $838,640 or triple the monetary gain to such person for all
other violations.\14\
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\13\ 7 U.S.C. 13a.
\14\ 17 CFR 143.8(a)(3)(ii).
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Section 6c of the CEA \15\ provides that Commission may bring an
action in the proper district court of the United States or the proper
United States court of any territory or other place subject to the
jurisdiction of the United States and the court may impose on a CMP on
``any registered entity or other person'' found by the court to have
committed any violation of any provision of the CEA or any rule,
regulation, or order thereunder, or is restraining trading in any
commodity for future delivery or any swap. In actions initiated on or
after August 1, 2016, for each violation for which a CMP is assessed
pursuant to Section 6c(d), the current, FCPIAA-adjusted maximum penalty
is set at: The greater of $1,098,190 or triple the monetary gain to
such person for manipulation or attempted manipulation in violation of
Section 6(c), 6(d), or 9(a)(2) of the CEA; and the greater of $167,728
or triple the monetary gain to such person for all other
violations.\16\
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\15\ 7 U.S.C. 13a-1.
\16\ 17 CFR 143.8(a)(4)(ii).
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III. Annual Inflation Adjustment for Commodity Exchange Act Civil
Monetary Penalties
A. Methodology
The annual inflation adjustment under the FCPIAA, in the context of
the CFTC's CMPs, is determined by increasing the maximum penalty by a
``cost-of-living adjustment,'' rounded to
[[Page 7644]]
the nearest multiple of one dollar.\17\ 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.\18\ In this case,
October 2016 CPI-U (241.729)/October 2015 CPI-U (237.838) =
1.01636.\19\ In order to complete the 2017 annual adjustment, the CFTC
must multiply each of its most recent CMP amounts by the multiplier,
1.01636, and round to the nearest dollar.
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\17\ FCPIAA Sections 4 and 5.
\18\ FCPIAA Section 5(b)(1).
\19\ 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/. Under the ``CPI Databases''
heading, select ``All Urban Consumers (Current Series)'', ``Top
Picks.'' Then check the box for ``U.S. All items, 1982-84 = 100-
CUUR0000SA0'', and click the ``Retrieve data'' button.
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B. Civil Monetary Penalty Adjustments
Applying the FCPIAA annual inflation adjustment methodology results
in the following amended CMPs:
----------------------------------------------------------------------------------------------------------------
Current 2017 Annual
inflation inflation
Citation Description adjusted CMP adjusted CMP
amount amount
----------------------------------------------------------------------------------------------------------------
Section 6(c) of the CEA, 7 U.S.C. 9........ Prohibition Regarding Manipulation $152,243 $154,734
and False Information [Other
Violation (Non-Manipulation)].
Section 6(c) of the CEA, 7 U.S.C. 9........ Prohibition Regarding Manipulation 1,098,190 1,116,156
and False Information
[Manipulation or Attempted
Manipulation].
Section 6(d) of the CEA, 7 U.S.C. 13b...... Manipulations or Other Violations; 152,243 154,734
Cease and Desist Orders Against
Persons Other Than Registered
Entities; Punishment; Misdemeanor
or Felony; Separate Offenses.
Section 6b of the CEA, 7 U.S.C. 13a........ Nonenforcement of Rules of 838,640 852,360
Government or Other Violations;
Cease and Desist Orders; Fines and
Penalties; Imprisonment;
Misdemeanor; Separate Offenses
[Other Violation (Non-
Manipulation)].
Section 6b of the CEA, 7 U.S.C. 13a........ Nonenforcement of Rules of 1,098,190 1,116,156
Government or Other Violations;
Cease and Desist Orders; Fines and
Penalties; Imprisonment;
Misdemeanor; Separate Offenses
[Manipulation or Attempted
Manipulation].
Section 6c of the CEA, 7 U.S.C. 13a-1...... Enjoining or Restraining Violations 167,728 170,472
[Other Violation (Non-
Manipulation)].
Section 6c of the CEA, 7 U.S.C. 13a-1...... Enjoining or Restraining Violations 1,098,190 1,116,156
[Manipulation or Attempted
Manipulation].
----------------------------------------------------------------------------------------------------------------
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.\20\ Thus,
the new CMP amounts established by this rulemaking may be applied only
in Commission administrative or civil injunctive enforcement
proceedings that are initiated on or after the effective date of this
amendment, January 15, 2017.
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\20\ FCPIAA Section 6.
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IV. Administrative Compliance
A. Notice Requirement
The notice and comment procedures of 5 U.S.C. 553 do not apply to
this rulemaking because the Commission is acting herein pursuant to
statutory language which mandates that the Commission act in a
nondiscretionary matter. Lake Carriers' Ass'n v. E.P.A., 652 F.3d 1, 10
(D.C. Cir. 2011).\21\
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\21\ The Commission has determined that the amendment to rule
143.8 is exempt from the provisions of the Administrative Procedure
Act, 5 U.S.C. 553, which generally require notice of proposed
rulemaking and provide other opportunities for public participation,
but excludes rules of agency practice, such as those found in part
143 of the Commission's regulations, and in particular rule 143.8
being revised herein.
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act \22\ 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. Because 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 regulation 143.8, the Commission additionally
is not obligated to conduct a regulatory flexibility analysis.
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\22\ 5 U.S.C. 601-612.
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C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA),\23\ 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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\23\ 44 U.S.C. 3507(d).
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D. Consideration of Costs and Benefits
Section 15(a) of the CEA \24\ requires the Commission to consider
the costs and benefits of its action before issuing a new regulation.
Section 15(a) 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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\24\ 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 regulation 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
[[Page 7645]]
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), or any other factors.
List of Subjects in 17 CFR Part 143
Civil monetary penalties, Claims.
For the reasons stated in the preamble, the Commodity Futures
Trading Commission amends part 17 CFR part 143 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, 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. Amend Sec. 143.8 as follows:
0
a. Revise paragraphs (a)(1)(ii) introductory text, (a)(2)(ii),
(a)(3)(ii) introductory text, and (a)(4)(ii) introductory text; and
0
b. Add paragraphs (a)(1)(iii), (a)(2)(iii), (a)(3)(iii), and
(a)(4)(iii).
The revisions and additions read as follows:
Sec. 143.8 Inflation-adjusted civil monetary penalties.
(a) * * *
(1) * * *
(ii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on August 1, 2016 through
January 14, 2017:
* * * * *
(iii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on or after January 15, 2017:
(A) For manipulation or attempted manipulation violations, not more
than the greater of $1,116,156 or triple the monetary gain to such
person for each such violation; and
(B) For all other violations, not more than the greater of $154,734
or triple the monetary gain to such person for each such violation; and
(2) * * *
(ii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on August 1, 2016 through
January 14, 2017, not more than the greater of $152,243 or triple the
monetary gain to such person for each such violation;
(iii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on or after January 15, 2017,
not more than the greater of $154,734 or triple the monetary gain to
such person for each such violation; and
(3) * * *
(ii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on August 1, 2016 through
January 14, 2017:
* * * * *
(iii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on or after January 15, 2017:
(A) For manipulation or attempted manipulation violations, not more
than the greater of $1,116,156 or triple the monetary gain to such
person for each such violation; and
(B) For all other violations, not more than the greater of $852,360
or triple the monetary gain to such person for each such violation; and
(4) * * *
(ii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on August 1, 2016 through
January 14, 2017:
* * * * *
(iii) In an administrative proceeding before the Commission or a
civil action in Federal court initiated on or after January 15, 2017:
(A) For manipulation or attempted manipulation violations, not more
than the greater of $1,116,156 or triple the monetary gain to such
person for each such violation; and
(B) For all other violations, not more than the greater of $170,472
or triple the monetary gain to such person for each such violation.
* * * * *
Issued in Washington, DC, on January 6, 2017, by the Commission.
Robert N. 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--
2017--Commission Voting Summary
On this matter, Chairman Massad and Commissioners Bowen and
Giancarlo voted in the affirmative. No Commissioner voted in the
negative.
[FR Doc. 2017-00488 Filed 1-19-17; 8:45 am]
BILLING CODE 6351-01-P
