Adjustments to Civil Monetary Penalty Amounts, 1396-1399 [2018-00387]
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Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices
are not present here. The proposed
changes are limited to fees for Internal
Distributers who use the data for
internal use only and not for the
redistribution and sale to external
parties.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed
Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 23 and paragraph (f) of Rule
19b–4 thereunder.24 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
srobinson on DSK9F5VC42PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeBZX–2017–019 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeBZX–2017–019. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
23 15
24 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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00:05 Jan 11, 2018
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeBZX–2017–019 and
should be submitted on or before
February 1, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–00309 Filed 1–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–10451; 34–82455; IA–
4842; IC–32963]
Adjustments to Civil Monetary Penalty
Amounts
Securities and Exchange
Commission.
ACTION: Notice of annual inflation
adjustment of civil monetary penalties.
I. Background
This notice is being published
pursuant to the 2015 Act,1 which
amended the Federal Civil Penalties
Inflation Adjustment Act of 1990 (the
‘‘Inflation Adjustment Act’’).2 The
Inflation Adjustment Act previously had
been amended by the Debt Collection
Improvement Act of 1996 (the ‘‘DCIA’’) 3
to require that each federal agency adopt
regulations at least once every four years
that adjust for inflation the CMPs that
can be imposed under the statutes
administered by the agency. Pursuant to
this requirement, the Commission
previously adopted regulations in 1996,
2001, 2005, 2009, and 2013 to adjust the
maximum amount of the CMPs that
could be imposed under the statutes the
Commission administers.4
The 2015 Act replaces the inflation
adjustment formula prescribed in the
DCIA with a new formula for calculating
the inflation-adjusted amount of CMPs.
The 2015 Act requires that agencies use
this new formula to re-calculate the
inflation-adjusted amounts of the
AGENCY:
The Securities and Exchange
Commission (the ‘‘Commission’’) is
publishing this notice pursuant to the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (the ‘‘2015 Act’’). This Act requires
all agencies to annually adjust for
inflation the civil monetary penalties
that can be imposed under the statutes
administered by the agency and publish
the adjusted amounts in the Federal
Register. This notice sets forth the
annual inflation adjustment of the
maximum amount of civil monetary
penalties (‘‘CMPs’’) administered by the
Commission under the Securities Act of
1933, the Securities Exchange Act of
SUMMARY:
25 17
Jkt 244001
1934 (the ‘‘Exchange Act’’), the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, and
certain penalties under the SarbanesOxley Act of 2002. These amounts are
effective beginning on January 15, 2018,
and will apply to all penalties imposed
after that date for violations of the
aforementioned statutes that occurred
after November 2, 2015.
FOR FURTHER INFORMATION CONTACT:
James A. Cappoli, Assistant General
Counsel, Office of the General Counsel,
at (202) 551–7923, or Stephen M. Ng,
Senior Special Counsel, Office of the
General Counsel, at (202) 551–7957.
SUPPLEMENTARY INFORMATION:
PO 00000
CFR 200.30–3(a)(12).
Frm 00070
Fmt 4703
Sfmt 4703
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.
3 Public Law 104–134, Title III, § 31001(s)(1), 110
Stat. 1321–373 (1996), codified at 28 U.S.C. 2461
note.
4 See Release Nos. 33–7361, 34–37912, IA–1596,
IC–22310, dated November 1, 1996 (effective
December 9, 1996), previously found at 17 CFR
201.1001 and Table I to Subpart E of Part 201;
Release Nos. 33–7946, 34–43897, IA–1921, IC–
24846, dated January 31, 2001 (effective February
2, 2001), previously found at 17 CFR 201.1002 and
Table II to Subpart E of Part 201; Release Nos. 33–
8530, 34–51136, IA–2348, IC–26748, dated
February 9, 2005 (effective February 14, 2005),
previously found at 17 CFR 201.1003 and Table III
to Subpart E of Part 201; Release Nos. 33–9009, 34–
59449, IA–2845, IC–28635, dated February 25, 2009
(effective March 3, 2009), previously found at 17
CFR 201.1004 and Table IV to Subpart E of Part 201;
and Release Nos. 33–9387, 34–68994, IA–3557, IC–
30408, dated February 27, 2013 (effective March 5,
2013), previously found at 17 CFR 201.1005 and
Table V to Subpart E of Part 201. The penalty
amounts contained in these releases have now been
consolidated into Table I to 17 CFR 201.1001.
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Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices
penalties they administer on an annual
basis and publish these new amounts in
the Federal Register by January 15 of
each year.5 The Commission previously
published the first annual adjustment
required by the 2015 Act on January 6,
2017 (the ‘‘2017 Adjustment’’).6 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.
A CMP is defined in relevant part as
any penalty, fine, or other sanction that:
(1) Is for a specific amount, or has a
maximum amount, as provided by
federal law; and (2) is assessed or
enforced by an agency in an
administrative proceeding or by a
federal court pursuant to federal law.7
This definition applies to the 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.
In addition, the Sarbanes-Oxley Act of
2002 provides the Public Company
Accounting Oversight Board (the
‘‘PCAOB’’) authority to levy civil
monetary penalties in its disciplinary
proceedings pursuant to 15 U.S.C.
7215(c)(4)(D).8 The definition of a CMP
in the Inflation Adjustment Act
encompasses such civil monetary
penalties.9
II. Adjusting the commission’s penalty
amounts for inflation
This notice sets forth the annual
inflation adjustment required by the
2015 Act for all CMPs under the
Securities Act, the Exchange Act, the
Investment Company Act, and the
Investment Advisers Act, and certain
civil monetary penalties under the
Sarbanes-Oxley Act.
Pursuant to the 2015 Act, the penalty
amounts in the 2017 Adjustment are
adjusted for inflation by increasing them
by the percentage change between the
Consumer Price Index for all Urban
Consumers (‘‘CPI–U’’) for October 2016
and the October 2017 CPI–U.10 OMB has
provided its calculation of this
multiplier (the ‘‘CPI–U Multiplier’’) to
agencies.11 The new penalty amounts
are determined by multiplying the
current penalty amounts by the CPI–U
Multiplier and then rounding to the
nearest dollar.
For example, the CMP for certain
insider trading violations by controlling
persons under Exchange Act Section
21A(a)(3) 12 was readjusted for inflation
as part of the 2017 Adjustment to
$2,011,061. To determine the new CMP
under this provision, the Commission
multiplies this amount by the CPI–U
Multiplier of 1.02041, and rounds to the
nearest dollar. Thus, the new CMP for
Exchange Act Section 21A(a)(3) is
$2,052,107.
Below is the Commission’s
calculation of the new penalty amounts
for the penalties it administers:
2017
Adjustment
penalty
amounts
CPI–U
multiplier
2018
Adjusted
penalty
amounts
U.S. Code citation
Civil monetary penalty description
15 U.S.C. 77h–1(g) (Securities Act Sec.
8A(g)).
For natural person ..........................................
$8,289
1.02041
$8,458
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others or gains to self.
For any other person/fraud/substantial losses
or risk of losses to others or gain to self.
For natural person ..........................................
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others.
For any other person/fraud/substantial losses
or risk of losses to others.
For natural person ..........................................
82,893
82,893
414,466
165,787
1.02041
1.02041
1.02041
1.02041
84,585
84,585
422,925
169,171
801,299
1.02041
817,654
9,054
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
1.02041
9,239
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
9,054
1.02041
9,239
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
2,011,061
1.02041
2,052,107
15 U.S.C. 77t(d) (Securities Act Sec. 20(d)) ..
15 U.S.C. 78u(d)(3) (Exchange Act Sec.
21(d)(3)).
srobinson on DSK9F5VC42PROD with NOTICES
15 U.S.C. 78u–1(a)(3) (Exchange Act Sec.
21A(a)(3)).
5 28
U.S.C. 2461 note Sec. 4.
Nos. 33–10276; 34–79749; IA–4599; IC–
32414 (effective Jan. 18, 2017).
7 28 U.S.C. 2461 note Sec. 3(2).
8 15 U.S.C. 7215(c)(4)(D).
9 The Commission may by order affirm, modify,
remand, or set aside sanctions, including civil
monetary penalties, imposed by the PCAOB. See
Section 107(c) of the Sarbanes-Oxley Act of 2002,
6 Release
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For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others or gains to self.
For any other person/fraud/substantial losses
or risk of losses to others or gain to self.
Insider Trading—controlling person ...............
15 U.S.C. 7217. The Commission may enforce such
orders in federal district court pursuant to Section
21(e) of the Exchange Act. As a result, penalties
assessed by the PCAOB in its disciplinary
proceedings are penalties ‘‘enforced’’ by the
Commission for purposes of the Inflation
Adjustment Act. See Adjustments to Civil Monetary
Penalty Amounts, Release No. 33–8530 (Feb. 4,
2005) [70 FR 7606 (Feb. 14, 2005)].
10 28 U.S.C. 2461 note Sec. 5.
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11 Office of Management and Budget,
Implementation of Penalty Inflation Adjustments
for 2018, Pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015
(December 15, 2017), available at https://
www.whitehouse.gov/wp-content/uploads/2017/11/
M-18-03.pdf. This multiplier represents the
percentage increase between the October 2016 CPI–
U and the October 2017 CPI–U, plus 1.
12 15 U.S.C. 78u–1(a)(3).
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Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices
2017
Adjustment
penalty
amounts
CPI–U
multiplier
2018
Adjusted
penalty
amounts
U.S. Code citation
Civil monetary penalty description
15 U.S.C. 78u–2 (Exchange Act Sec. 21B) ...
For natural person ..........................................
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others.
For any other person/fraud/substantial losses
or risk of losses to others.
Exchange Act/failure to file information documents, reports.
Foreign Corrupt Practices—any issuer ..........
9,054
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
1.02041
9,239
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
534
1.02041
545
20,111
1.02041
20,521
Foreign Corrupt Practices—any agent or
stockholder acting on behalf of issuer.
For natural person ..........................................
20,111
1.02041
20,521
9,054
1.02041
9,239
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others or gains to self.
For any other person/fraud/substantial losses
or risk of losses to others or gain to self.
For natural person ..........................................
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
9,054
1.02041
9,239
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others.
For any other person/fraud/substantial losses
or risk of losses to others.
For natural person ..........................................
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
9,054
1.02041
9,239
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others or gains to self.
For any other person/fraud/substantial losses
or risk of losses to others or gain to self.
For natural person ..........................................
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
9,054
1.02041
9,239
For any other person .....................................
For natural person/fraud ................................
For any other person/fraud ............................
For natural person/fraud/substantial losses or
risk of losses to others.
For any other person/fraud/substantial losses
or risk of losses to others.
For natural person ..........................................
90,535
90,535
452,677
181,071
1.02041
1.02041
1.02041
1.02041
92,383
92,383
461,916
184,767
905,353
1.02041
923,831
133,331
1.02041
136,052
For any other person .....................................
For natural person ..........................................
2,666,624
999,984
1.02041
1.02041
2,721,050
1,020,394
For any other person .....................................
19,999,678
1.02041
20,407,871
15 U.S.C. 78ff(b) (Exchange Act Sec. 32(b))
15 U.S.C. 78ff(c)(1)(B) (Exchange Act Sec.
32(c)(1)(B)).
15 U.S.C. 78ff(c)(2)(B) (Exchange Act Sec.
32(c)(2)(B)).
15 U.S.C. 80a–9(d) (Investment Company
Act Sec. 9(d)).
15 U.S.C. 80a–41(e) (Investment Company
Act Sec. 42(e)).
15 U.S.C. 80b–3(i) (Investment Advisers Act
Sec. 203(i)).
15 U.S.C. 80b–9(e) (Investment Advisers Act
Sec. 209(e)).
15 U.S.C. 7215(c)(4)(D)(i) (Sarbanes-Oxley
Act Sec. 105(c)(4)(D)(i)).
srobinson on DSK9F5VC42PROD with NOTICES
15 U.S.C. 7215(c)(4)(D)(ii) (Sarbanes-Oxley
Act Sec. 105(c)(4)(D)(ii)).
Pursuant to the 2015 Act and 17 CFR
201.1001, the adjusted penalty amounts
in this notice (and all penalty
adjustments performed pursuant to the
2015 Act) apply to penalties imposed
after the date the adjustment is effective
for violations that occurred after
November 2, 2015, the 2015 Act’s
enactment date. These penalty amounts
supersede the amounts in the 2017
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00:05 Jan 11, 2018
Jkt 244001
Adjustment.13 For violations that
13 The penalty amounts in this notice are being
published in the Federal Register and will not be
added to the Code of Federal Regulations in
accordance with the 2015 Act and 17 CFR
201.1001(b). See 28 U.S.C. 2461 note Sec. 4(a)(2);
17 CFR 201.1001(b). In addition to being published
in the Federal Register, the penalty amounts in this
notice will be made available on the Commission’s
website at https://www.sec.gov/enforce/civilpenalties-inflation-adjustments.htm, as detailed in
17 CFR 201.1001(b). This website also lists the
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Fmt 4703
Sfmt 4703
occurred on or before November 2,
2015, the penalty amounts in Table I to
17 CFR 201.1001 continue to apply.14
By the Commission.
penalty amounts for violations that occurred on or
before November 2, 2015.
14 17 CFR 201.1001(a).
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Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices
Dated: January 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018–00387 Filed 1–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82451; File No. 4–698]
Joint Industry Plan; Notice of Filing
and Immediate Effectiveness of
Amendment No. 4 to the National
Market System Plan Governing the
Consolidated Audit Trail by Cboe BYX
Exchange, Inc., Cboe BZX Exchange,
Inc., Cboe EDGA Exchange, Inc., Cboe
EDGX Exchange, Inc., BOX Options
Exchange LLC, Cboe C2 Exchange,
Inc., Cboe Exchange, Inc., Chicago
Stock Exchange, Inc., Financial
Industry Regulatory Authority, Inc.,
Investors’ Exchange LLC, Miami
International Securities Exchange,
LLC, MIAX PEARL, LLC, Nasdaq BX,
Inc., Nasdaq GEMX, LLC, Nasdaq ISE,
LLC, Nasdaq MRX, LLC, Nasdaq PHLX
LLC, The Nasdaq Stock Market LLC,
New York Stock Exchange LLC, NYSE
Arca, Inc., NYSE American, LLC and
NYSE National, Inc.
January 5, 2018.
srobinson on DSK9F5VC42PROD with NOTICES
I. Introduction
On December 11, 2017, the Operating
Committee for CAT NMS, LLC (the
‘‘Company’’), on behalf of the following
parties to the National Market System
Plan Governing the Consolidated Audit
Trail (the ‘‘CAT NMS Plan’’ or ‘‘Plan’’): 1
1 On February 27, 2015, BATS–Y Exchange, Inc.
(n/k/a Cboe BYX Exchange, Inc.), BATS Exchange,
Inc. (n/k/a Cboe BZX Exchange, Inc.), BOX Options
Exchange LLC, C2 Options Exchange, Incorporated
(n/k/a Cboe C2 Exchange, Inc.), Chicago Board
Options Exchange, Incorporated (n/k/a Cboe
Exchange, Inc.), Chicago Stock Exchange, Inc.,
EDGA Exchange, Inc. (n/k/a Cboe EDGA Exchange,
Inc.), EDGX Exchange, Inc. (n/k/a Cboe EDGX
Exchange, Inc.), Financial Industry Regulatory
Authority, Inc., International Securities Exchange,
LLC (n/k/a Nasdaq ISE, LLC), ISE Gemini, LLC (n/
k/a Nasdaq GEMX, LLC), Miami International
Securities Exchange LLC, NASDAQ OMX BX, Inc.
(n/k/a Nasdaq BX, Inc.), NASDAQ OMX PHLX LLC
(n/k/a Nasdaq PHLX LLC), The NASDAQ Stock
Market LLC, National Stock Exchange, Inc. (n/k/a
NYSE National, Inc.), New York Stock Exchange
LLC, NYSE MKT LLC (n/k/a NYSE American LLC),
and NYSE Arca, Inc. filed with the Commission,
pursuant to Section 11A of the Exchange Act and
Rule 608 of Regulation NMS thereunder, the CAT
NMS Plan. 15 U.S.C. 78k–1; 17 CFR 242.608. The
Plan was published for comment in the Federal
Register on May 17, 2016, and approved by the
Commission, as modified, on November 15, 2016.
See Securities Exchange Act Release Nos. 77724
(April 27, 2016), 81 FR 30614 (May 17, 2016); 79318
(November 15, 2016), 81 FR 84696 (November 23,
2016). On January 30, 2017, the Commission
noticed for immediate effectiveness an amendment
to the Plan to add MIAX PEARL, LLC as a
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00:05 Jan 11, 2018
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Cboe BYX Exchange, Inc., (previously
known as Bats BYX Exchange, Inc.),
Cboe BZX Exchange, Inc. (previously
known as Bats BZX Exchange), Inc.,
Cboe EDGA Exchange, Inc. (previously
known as Bats EDGA Exchange, Inc.),
Cboe EDGX Exchange, Inc. (previously
known as Bats EDGX Exchange, Inc.),
BOX Options Exchange LLC, Cboe C2
Exchange, Inc., Cboe Exchange, Inc.,
Chicago Stock Exchange, Inc., Financial
Industry Regulatory Authority, Inc.,
Nasdaq ISE, LLC (previously known as
International Securities Exchange, Inc.),
Investors’ Exchange, LLC, Nasdaq
GEMX (previously known as ISE
Gemini, LLC), Nasdaq MRX (previously
known as ISE Mercury, LLC), Miami
International Securities Exchange, LLC,
MIAX PEARL, LLC, Nasdaq BX, Inc.
(previously known as NASDAQ BX,
Inc.), Nasdaq PHLX LLC (previously
known as NASDAQ PHLX LLC), The
NASDAQ Stock Market LLC, National
Stock Exchange, Inc., New York Stock
Exchange LLC, NYSE Arca, Inc., and
NYSE American (previously known as
NYSE MKT, LLC) (collectively, the
‘‘Participants,’’ ‘‘self-regulatory
organizations’’ or ‘‘SROs’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’ or ‘‘SEC’’) pursuant to
Section 11A(a)(3) of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 2 and Rule 608 thereunder,3 a
proposal to amend the Plan
(‘‘Amendment No. 4’’).4 The proposed
amendment would add a fee schedule to
a new Exhibit B of the Plan which sets
forth the CAT fees to be paid by the
Participants. A copy of proposed Exhibit
B to the CAT NMS Plan is attached as
Appendix A hereto. The Participants
have also included, and as attached
Participant. See Securities Exchange Act Release
No. 79898, 82 FR 9250 (February 3, 2017).
2 15 U.S.C 78k–1(a)(3).
3 17 CFR 242.608.
4 See Letter from Michael Simon, CAT NMS Plan
Operating Committee Chair, to Brent J. Fields,
Secretary, Commission, dated December 11, 2017
(‘‘Transmittal Letter’’). The Participants previously
submitted an amendment to the CAT NMS Plan to
establish Participant fees (‘‘Amendment No. 2’’).
See Letter from Michael Simon, Chair, CAT NMS
Plan Operating Committee, to Brent J. Fields,
Secretary, Commission, dated May 22, 2017. See
also Securities Exchange Act Release No. 80930
(June 14, 2017), 82 FR 28180 (June 20, 2017),
available at https://www.sec.gov/rules/sro/nms/
2017/34-80930.pdf. The Commission issued an
Order of Summary Abrogation of Amendment No.
2 on July 21, 2017, concluding that the amendment
raised concerns and the justifications provided by
the Participants were not sufficient for the
Commission to determine whether the amendment
was consistent with the Act. See Securities and
Exchange Commission Release No. 81189 (July 21,
2017), 82 FR 35005 (July 27, 2017). On October 30,
2017, the Participants filed Amendment No. 3 to the
CAT NMS Plan, which has been withdrawn and
replaced and superseded in its entirety by
Amendment No. 4.
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
1399
hereto, an Appendix B containing two
charts, one listing the current Equity
Execution Venues, each with its rank
and tier, and one listing the current
Options Execution Venues, each with its
rank and tier. The Commission is
publishing this notice to solicit
comments from interested persons on
Amendment No. 4.5
II. Description of the Plan
Set forth in this Section II is the
statement of the purpose and summary
of Amendment No. 4, along with the
information required by Rule 608(a)(4)
and (5) under the Exchange Act,6
prepared and submitted by the
Participants to the Commission.7
A. Description of the Amendments to
the CAT NMS Plan
(1) Executive Summary
The following provides an executive
summary of the CAT funding model
approved by the Operating Committee,
as well as Participants’ obligations
related to the payment of CAT Fees
calculated pursuant to the CAT funding
model. A detailed description of the
CAT funding model and the CAT Fees
follows this executive summary.
• CAT Costs. The CAT funding model
is designed to establish CAT-specific
fees to collectively recover the costs of
building and operating the CAT from all
CAT Reporters, including Industry
Members and Participants. The overall
CAT costs used in calculating the CAT
Fees in this fee filing are comprised of
Plan Processor CAT costs and non-Plan
Processor CAT costs incurred, and
estimated to be incurred, from
November 21, 2016 through November
21, 2017. Although the CAT costs from
November 21, 2016 through November
21, 2017 were used in calculating the
CAT Fees, the CAT Fees set forth in this
fee filing would be in effect until the
automatic sunset date, as discussed
below. (See Section A(2)(E) below)
• Bifurcated Funding Model. The
CAT NMS Plan requires a bifurcated
funding model, where costs associated
with building and operating the CAT
would be borne by (1) Participants and
Industry Members that are Execution
Venues for Eligible Securities through
fixed tier fees based on market share,
and (2) Industry Members (other than
alternative trading systems (‘‘ATSs’’)
that execute transactions in Eligible
Securities (‘‘Execution Venue ATSs’’))
through fixed tier fees based on message
traffic for Eligible Securities. (See
Section A(2) below)
5 17
CFR 242.608.
17 CFR 242.608(a)(4) and (a)(5).
7 See Transmittal Letter, supra note 4.
6 See
E:\FR\FM\11JAN1.SGM
11JAN1
]]>Agencies
[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)]
[Notices]
[Pages 1396-1399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00387]
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SECURITIES AND EXCHANGE COMMISSION
[Release Nos. 33-10451; 34-82455; IA-4842; IC-32963]
Adjustments to Civil Monetary Penalty Amounts
AGENCY: Securities and Exchange Commission.
ACTION: Notice of annual inflation adjustment of civil monetary
penalties.
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SUMMARY: The Securities and Exchange Commission (the ``Commission'') is
publishing this notice pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015 (the ``2015 Act'').
This Act requires all agencies to annually adjust for inflation the
civil monetary penalties that can be imposed under the statutes
administered by the agency and publish the adjusted amounts in the
Federal Register. This notice sets forth the annual inflation
adjustment of the maximum amount of civil monetary penalties (``CMPs'')
administered by the Commission under the Securities Act of 1933, the
Securities Exchange Act of 1934 (the ``Exchange Act''), the Investment
Company Act of 1940, the Investment Advisers Act of 1940, and certain
penalties under the Sarbanes-Oxley Act of 2002. These amounts are
effective beginning on January 15, 2018, and will apply to all
penalties imposed after that date for violations of the aforementioned
statutes that occurred after November 2, 2015.
FOR FURTHER INFORMATION CONTACT: James A. Cappoli, Assistant General
Counsel, Office of the General Counsel, at (202) 551-7923, or Stephen
M. Ng, Senior Special Counsel, Office of the General Counsel, at (202)
551-7957.
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
(the ``Inflation Adjustment Act'').\2\ The Inflation Adjustment Act
previously had been amended by the Debt Collection Improvement Act of
1996 (the ``DCIA'') \3\ to require that each federal agency adopt
regulations at least once every four years that adjust for inflation
the CMPs that can be imposed under the statutes administered by the
agency. Pursuant to this requirement, the Commission previously adopted
regulations in 1996, 2001, 2005, 2009, and 2013 to adjust the maximum
amount of the CMPs that could be imposed under the statutes the
Commission administers.\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.
\3\ Public Law 104-134, Title III, Sec. 31001(s)(1), 110 Stat.
1321-373 (1996), codified at 28 U.S.C. 2461 note.
\4\ See Release Nos. 33-7361, 34-37912, IA-1596, IC-22310, dated
November 1, 1996 (effective December 9, 1996), previously found at
17 CFR 201.1001 and Table I to Subpart E of Part 201; Release Nos.
33-7946, 34-43897, IA-1921, IC-24846, dated January 31, 2001
(effective February 2, 2001), previously found at 17 CFR 201.1002
and Table II to Subpart E of Part 201; Release Nos. 33-8530, 34-
51136, IA-2348, IC-26748, dated February 9, 2005 (effective February
14, 2005), previously found at 17 CFR 201.1003 and Table III to
Subpart E of Part 201; Release Nos. 33-9009, 34-59449, IA-2845, IC-
28635, dated February 25, 2009 (effective March 3, 2009), previously
found at 17 CFR 201.1004 and Table IV to Subpart E of Part 201; and
Release Nos. 33-9387, 34-68994, IA-3557, IC-30408, dated February
27, 2013 (effective March 5, 2013), previously found at 17 CFR
201.1005 and Table V to Subpart E of Part 201. The penalty amounts
contained in these releases have now been consolidated into Table I
to 17 CFR 201.1001.
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The 2015 Act replaces the inflation adjustment formula prescribed
in the DCIA with a new formula for calculating the inflation-adjusted
amount of CMPs. The 2015 Act requires that agencies use this new
formula to re-calculate the inflation-adjusted amounts of the
[[Page 1397]]
penalties they administer on an annual basis and publish these new
amounts in the Federal Register by January 15 of each year.\5\ The
Commission previously published the first annual adjustment required by
the 2015 Act on January 6, 2017 (the ``2017 Adjustment'').\6\ 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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\5\ 28 U.S.C. 2461 note Sec. 4.
\6\ Release Nos. 33-10276; 34-79749; IA-4599; IC-32414
(effective Jan. 18, 2017).
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A CMP is defined in relevant part as any penalty, fine, or other
sanction that: (1) Is for a specific amount, or has a maximum amount,
as provided by federal law; and (2) is assessed or enforced by an
agency in an administrative proceeding or by a federal court pursuant
to federal law.\7\ This definition applies to the 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. In addition, the Sarbanes-Oxley Act of
2002 provides the Public Company Accounting Oversight Board (the
``PCAOB'') authority to levy civil monetary penalties in its
disciplinary proceedings pursuant to 15 U.S.C. 7215(c)(4)(D).\8\ The
definition of a CMP in the Inflation Adjustment Act encompasses such
civil monetary penalties.\9\
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\7\ 28 U.S.C. 2461 note Sec. 3(2).
\8\ 15 U.S.C. 7215(c)(4)(D).
\9\ The Commission may by order affirm, modify, remand, or set
aside sanctions, including civil monetary penalties, imposed by the
PCAOB. See Section 107(c) of the Sarbanes-Oxley Act of 2002, 15
U.S.C. 7217. The Commission may enforce such orders in federal
district court pursuant to Section 21(e) of the Exchange Act. As a
result, penalties assessed by the PCAOB in its disciplinary
proceedings are penalties ``enforced'' by the Commission for
purposes of the Inflation Adjustment Act. See Adjustments to Civil
Monetary Penalty Amounts, Release No. 33-8530 (Feb. 4, 2005) [70 FR
7606 (Feb. 14, 2005)].
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II. Adjusting the commission's penalty amounts for inflation
This notice sets forth the annual inflation adjustment required by
the 2015 Act for all CMPs under the Securities Act, the Exchange Act,
the Investment Company Act, and the Investment Advisers Act, and
certain civil monetary penalties under the Sarbanes-Oxley Act.
Pursuant to the 2015 Act, the penalty amounts in the 2017
Adjustment are adjusted for inflation by increasing them by the
percentage change between the Consumer Price Index for all Urban
Consumers (``CPI-U'') for October 2016 and the October 2017 CPI-U.\10\
OMB has provided its calculation of this multiplier (the ``CPI-U
Multiplier'') to agencies.\11\ The new penalty amounts are determined
by multiplying the current penalty amounts by the CPI-U Multiplier and
then rounding to the nearest dollar.
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\10\ 28 U.S.C. 2461 note Sec. 5.
\11\ Office of Management and Budget, Implementation of Penalty
Inflation Adjustments for 2018, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015
(December 15, 2017), available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf. This multiplier represents the
percentage increase between the October 2016 CPI-U and the October
2017 CPI-U, plus 1.
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For example, the CMP for certain insider trading violations by
controlling persons under Exchange Act Section 21A(a)(3) \12\ was
readjusted for inflation as part of the 2017 Adjustment to $2,011,061.
To determine the new CMP under this provision, the Commission
multiplies this amount by the CPI-U Multiplier of 1.02041, and rounds
to the nearest dollar. Thus, the new CMP for Exchange Act Section
21A(a)(3) is $2,052,107.
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\12\ 15 U.S.C. 78u-1(a)(3).
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Below is the Commission's calculation of the new penalty amounts
for the penalties it administers:
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2017
Civil monetary penalty Adjustment CPI-U 2018 Adjusted
U.S. Code citation description penalty multiplier penalty
amounts amounts
----------------------------------------------------------------------------------------------------------------
15 U.S.C. 77h-1(g) (Securities Act For natural person......... $8,289 1.02041 $8,458
Sec. 8A(g)).
For any other person....... 82,893 1.02041 84,585
For natural person/fraud... 82,893 1.02041 84,585
For any other person/fraud. 414,466 1.02041 422,925
For natural person/fraud/ 165,787 1.02041 169,171
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 801,299 1.02041 817,654
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 77t(d) (Securities Act For natural person......... 9,054 1.02041 9,239
Sec. 20(d)).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others.
15 U.S.C. 78u(d)(3) (Exchange Act For natural person......... 9,054 1.02041 9,239
Sec. 21(d)(3)).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 78u-1(a)(3) (Exchange Act Insider Trading-- 2,011,061 1.02041 2,052,107
Sec. 21A(a)(3)). controlling person.
[[Page 1398]]
15 U.S.C. 78u-2 (Exchange Act Sec. For natural person......... 9,054 1.02041 9,239
21B).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others.
15 U.S.C. 78ff(b) (Exchange Act Exchange Act/failure to 534 1.02041 545
Sec. 32(b)). file information
documents, reports.
15 U.S.C. 78ff(c)(1)(B) (Exchange Foreign Corrupt Practices-- 20,111 1.02041 20,521
Act Sec. 32(c)(1)(B)). any issuer.
15 U.S.C. 78ff(c)(2)(B) (Exchange Foreign Corrupt Practices-- 20,111 1.02041 20,521
Act Sec. 32(c)(2)(B)). any agent or stockholder
acting on behalf of issuer.
15 U.S.C. 80a-9(d) (Investment For natural person......... 9,054 1.02041 9,239
Company Act Sec. 9(d)).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 80a-41(e) (Investment For natural person......... 9,054 1.02041 9,239
Company Act Sec. 42(e)).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others.
15 U.S.C. 80b-3(i) (Investment For natural person......... 9,054 1.02041 9,239
Advisers Act Sec. 203(i)).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 80b-9(e) (Investment For natural person......... 9,054 1.02041 9,239
Advisers Act Sec. 209(e)).
For any other person....... 90,535 1.02041 92,383
For natural person/fraud... 90,535 1.02041 92,383
For any other person/fraud. 452,677 1.02041 461,916
For natural person/fraud/ 181,071 1.02041 184,767
substantial losses or risk
of losses to others.
For any other person/fraud/ 905,353 1.02041 923,831
substantial losses or risk
of losses to others.
15 U.S.C. 7215(c)(4)(D)(i) For natural person......... 133,331 1.02041 136,052
(Sarbanes-Oxley Act Sec.
105(c)(4)(D)(i)).
For any other person....... 2,666,624 1.02041 2,721,050
15 U.S.C. 7215(c)(4)(D)(ii) For natural person......... 999,984 1.02041 1,020,394
(Sarbanes-Oxley Act Sec.
105(c)(4)(D)(ii)).
For any other person....... 19,999,678 1.02041 20,407,871
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Pursuant to the 2015 Act and 17 CFR 201.1001, the adjusted penalty
amounts in this notice (and all penalty adjustments performed pursuant
to the 2015 Act) apply to penalties imposed after the date the
adjustment is effective for violations that occurred after November 2,
2015, the 2015 Act's enactment date. These penalty amounts supersede
the amounts in the 2017 Adjustment.\13\ For violations that 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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\13\ The penalty amounts in this notice are being published in
the Federal Register and will not be added to the Code of Federal
Regulations in accordance with the 2015 Act and 17 CFR 201.1001(b).
See 28 U.S.C. 2461 note Sec. 4(a)(2); 17 CFR 201.1001(b). In
addition to being published in the Federal Register, the penalty
amounts in this notice will be made available on the Commission's
website at https://www.sec.gov/enforce/civil-penalties-inflation-adjustments.htm, as detailed in 17 CFR 201.1001(b). This website
also lists the penalty amounts for violations that occurred on or
before November 2, 2015.
\14\ 17 CFR 201.1001(a).
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By the Commission.
[[Page 1399]]
Dated: January 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018-00387 Filed 1-10-18; 8:45 am]
BILLING CODE 8011-01-P
