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[Federal Register Volume 90, Number 15 (Friday, January 24, 2025)]
[Rules and Regulations]
[Pages 8111-8113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01724]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 90, No. 15 / Friday, January 24, 2025 / Rules 
and Regulations

[[Page 8111]]

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 143

RIN 3038-AF41

Annual Adjustment of Civil Monetary Penalties To Reflect 
Inflation--2025

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
amending its rule that governs the maximum amount of civil monetary 
penalties imposed under the Commodity Exchange Act (CEA), to adjust for 
inflation. This rule sets forth the maximum, inflation-adjusted dollar 
amount for civil monetary penalties (CMPs) assessable for violations of 
the CEA and Commission rules, regulations and orders thereunder. The 
rule, as amended, implements the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended.

DATES: This rule is effective on January 24, 2025 and is applicable to 
penalties assessed after January 15, 2025.

FOR FURTHER INFORMATION CONTACT: Edward J. Riccobene, Associate Chief 
Counsel, Division of Enforcement, at (202) 418-5327 or 
[email protected], Commodity Futures Trading Commission, 1155 21st 
Street NW, Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act of 1990 
(FCPIAA) \1\ requires the head of each Federal agency to periodically 
adjust for inflation the minimum and maximum amount of CMPs provided by 
law within the jurisdiction of that agency.\2\ A 2015 amendment to the 
FCPIAA \3\ required agencies to make an initial ``catch-up'' adjustment 
to its civil monetary penalties effective no later than August 1, 
2016.\4\ For every year thereafter effective not later than January 
15th, the FCPIAA, as amended, requires agencies to make annual 
adjustments for inflation, with guidance from the Director of the 
Office of Management and Budget.\5\
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    \1\ The FCPIAA, Public Law 101-410 (1990), as amended, is 
codified at 28 U.S.C. 2461 note. The FCPIAA states the purpose of 
the FCPIAA is to establish a mechanism that shall (1) allow for 
regular adjustment for inflation of civil monetary penalties; (2) 
maintain the deterrent effect of civil monetary penalties and 
promote compliance with the law; and (3) improve the collection by 
the Federal Government of civil monetary penalties.
    \2\ For the relevant CMPs within the Commission's jurisdiction, 
the Act provides only for maximum amounts that can be assessed for 
each violation of the Act or the rules, regulations and orders 
promulgated thereunder; the Act does not set forth any minimum 
penalties. Therefore, the remainder of this release will refer only 
to CMP maximums.
    \3\ Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, Public Law 114-74, 129 Stat. 584 (2015) 
(2015 Act), title VII, Section 701.
    \4\ FCPIAA Sections 4 and 5. See also, Adjustment of Civil 
Monetary Penalties for Inflation, 81 FR 41435 (June 27, 2016).
    \5\ FCPIAA Sections 4 and 5. See also, Executive Office of the 
President, Office of Management and Budget Memorandum, M-25-02, 
Implementation of Penalty Inflation Adjustments for 2025 (Dec. 17, 
2024) (2024 OMB Guidance) (https://www.whitehouse.gov/wp-content/uploads/2024/12/M-25-02.pdf).
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II. Commodity Exchange Act Civil Monetary Penalties

    The following sections of the CEA provide for CMPs that meet the 
FCPIAA definition \6\ and these CMPs are, therefore, subject to the 
inflation adjustment: Sections 6(c), 6(d), 6b, and 6c of the CEA.\7\
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    \6\ FCPIAA Section 3(2).
    \7\ 7 U.S.C. 9, 13a, 13a-1, 13b. Criminal authorities may also 
seek fines for criminal violations of the CEA (see 7 U.S.C. 13, 
13(c), 13(d), 13(e), and 13b). The FCPIA does not affect the amounts 
of these criminal penalties.
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III. Annual Inflation Adjustment for Commodity Exchange Act Civil 
Monetary Penalties

A. Methodology

    The FCPIAA annual inflation adjustment, in the context of the 
CFTC's CMPs, is determined by increasing the maximum penalty by a 
``cost-of-living adjustment'', rounded to the nearest multiple of one 
dollar.\8\ Annual inflation adjustments are based on the percent change 
between the October Consumer Price Index for all Urban Consumers (CPI-
U) preceding the date of the adjustment, and the prior year's October 
CPI-U.\9\ In this case, the October 2024 CPI-U (315.664)/October 2023 
CPI-U (307.671) = 1.02598.\10\ In order to complete the 2025 annual 
adjustment, the CFTC must multiply each of its most recent CMP amounts 
by the multiplier, 1.02598, and round to the nearest dollar.\11\
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    \8\ FCPIAA Sections 4 and 5.
    \9\ FCPIAA Section 5(b)(1).
    \10\ The CPI-U is published by the Department of Labor. 
Interested parties may find the relevant Consumer Price Index on the 
internet. To access this information, go to the Consumer Price Index 
Home Page at: http://www.bls.gov/cpi/. Click the heading ``CPI 
Data'' then the subheading ``Databases'', and select ``All Urban 
Consumers (Current Series)'', ``Top Picks.'' Then check the box for 
``U.S. city average, All items--CUUR0000SA0'', and click the 
``Retrieve data'' button.
    \11\ FCPIAA Section 5(a). See also, 2024 OMB Guidance at 1.
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B. Civil Monetary Penalty Adjustments

    Applying the FCPIAA annual inflation adjustment methodology results 
in the following amended CMPs:

[[Page 8112]]

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                                   Violations occurring on or after 11/02/2015
                                                                 -----------------------------------------------
U.S. Code citation                   Civil monetary penalty         Penalty amount       CPI-U      New adjusted
                                           description                     in 2024  multiplier    penalty amount
                                                                   final rule \12\
----------------------------------------------------------------------------------------------------------------
                  Civil Monetary Penalty Imposed by the Commission in an Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of    For any person    Other Than               $201,021     1.02598          $206,244
 the Commodity Exchange Act).   other than a      Manipulation
                                registered        or Attempted
                                entity \1\.       Manipulation.
                               For any person    Manipulation or         1,450,040     1.02598         1,487,712
                                other than a      Attempted
                                registered        Manipulation.
                                entity \1\.
7 U.S.C. 13a (Section 6b of    For a registered  Other Than              1,107,332     1.02598         1,136,100
 the Commodity Exchange Act).   entity \1\ or     Manipulation
                                any of its        or Attempted
                                directors,        Manipulation.
                                officers or
                                employees.
                               For a registered  Manipulation or         1,450,040     1.02598         1,487,712
                                entity \1\ or     Attempted
                                any of its        Manipulation.
                                directors,
                                officers or
                                employees.
----------------------------------------------------------------------------------------------------------------
             Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of  Any Person......  Other Than                221,466     1.02598           227,220
 the Commodity Exchange Act).                     Manipulation
                                                  or Attempted
                                                  Manipulation.
                               Any Person......  Manipulation or         1,450,040     1.02598         1,487,712
                                                  Attempted
                                                  Manipulation.
----------------------------------------------------------------------------------------------------------------
\1\ The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).

    The FCPIAA provides that any increase under the FCPIAA in a civil 
monetary penalty shall apply only to civil monetary penalties, 
including those whose associated violation predated such increase, 
which are assessed after the date the increase takes effect.'' \13\ 
Thus, the new CMP amounts established by this rulemaking shall apply to 
penalties assessed after January 15, 2025, for violations that occurred 
on or after November 2, 2015, the effective date of the FCPIAA 
amendment requiring annual adjustments, the 2015 Act.
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    \12\ Annual Adjustment of Civil Monetary Penalties to Reflect 
Inflation--2024, 89 FR 4542 (Jan. 24, 2024); https://www.cftc.gov/sites/default/files/2024/01/2024-01341a.pdf.
    \13\ FCPIAA Section 6.
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IV. Administrative Compliance

A. Notice Requirement

    The FCPIAA specifically exempted from the Administrative Procedure 
Act (APA) the rulemakings required to implement annual inflation 
adjustments.\14\ ``This means that the notice and comment process the 
APA generally requires--i.e., notice, an opportunity for comment, and a 
delay in effective date--is not required for agencies to issue 
regulations implementing the annual adjustment.'' \15\ The Commission 
further notes that the notice and comment procedures of the APA do not 
apply to this rulemaking because the Commission is acting herein 
pursuant to statutory language that mandates that the Commission act in 
a nondiscretionary matter.\16\
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    \14\ FCPIAA Section 4(b)(2).
    \15\ 2024 OMB Guidance at 4.
    \16\ Lake Carriers' Ass'n v. E.P.A., 652 F.3d 1, 10 (D.C. Cir. 
2011).
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B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \17\ requires agencies with 
rulemaking authority to consider the impact of certain of their rules 
on small businesses. In relevant part, the RFA requires a regulatory 
flexibility analysis for rules for which the agency publishes a general 
notice of proposed rulemaking pursuant to section 553(b) or any other 
law.\18\ Because, as discussed above, the Commission is not obligated 
by section 553(b) or any other law to publish a general notice of 
proposed rulemaking with respect to the revisions being made to Rule 
143.8, the Commission additionally is not obligated to conduct a 
regulatory flexibility analysis.
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    \17\ 5 U.S.C. 601-612.
    \18\ 5 U.S.C. 601(2), 603(a).
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C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA),\19\ which imposes 
certain requirements on Federal agencies, including the Commission, in 
connection with their conducting or sponsoring any collection of 
information as defined by the PRA, does not apply to this rule. This 
rule amendment does not contain information collection requirements 
that require the approval of the Office of Management and Budget.
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    \19\ 44 U.S.C. 3507(d).
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D. Consideration of Costs and Benefits

    Section 15(a) of the CEA \20\ requires the Commission to consider 
the costs and benefits of its action before issuing a new regulation. 
Section 15(a) of the CEA further specifies that costs and benefits 
shall be evaluated in light of five broad areas of market and public 
concern: (1) protection of market participants and the public; (2) 
efficiency, competitiveness, and financial integrity of futures 
markets; (3) price discovery; (4) sound risk management practices; and 
(5) other public interest considerations.
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    \20\ 7 U.S.C. 19(a).
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    The Commission believes that benefits of this rulemaking greatly 
outweigh the costs, if any. As the Commission understands, the 
statutory provisions by which it is making cost-of-living adjustments 
to the CMPs in Rule 143.8 were enacted to ensure that CMPs do not lose 
their deterrence value because of inflation. An analysis of the costs 
and benefits of these adjustments were made before enactment of the 
statutory provisions under which the Commission is operating, and limit 
the discretion of the Commission to the extent that there are no 
regulatory choices the Commission could make that would supersede the 
pre-enactment analysis with respect to the five factors enumerated in 
Section 15(a) of the CEA, or any other factors.

List of Subjects in 17 CFR Part 143

    Claims, Penalties.

    For the reasons set forth in the preamble, the Commission amends 
part 143 of chapter I of title 17 of the Code of Federal Regulations as 
follows:

[[Page 8113]]

PART 143--COLLECTION OF CLAIMS OWED THE UNITED STATES ARISING FROM 
ACTIVITIES UNDER THE COMMISSION'S JURISDICTION

0
1. The authority citation for part 143 continues to read as follows:

    Authority: 7 U.S.C. 9, 9a, 12a(5), 13a, 13a-1(d), 13(a), 13b; 31 
U.S.C. 3701-3720E; 28 U.S.C. 2461 note.

0
2. Amend Sec.  143.8 by revising paragraph (b) to read as follows:

Sec.  143.8  Inflation-adjusted civil monetary penalties.

* * * * *
    (b) 2025 Inflation adjustment. The maximum amount of each civil 
monetary penalty in the following charts applies to penalties assessed 
after January 15, 2025:
    (1) For violations other than manipulation or attempted 
manipulation:

                                           Table 1 to Paragraph (b)(1)
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                                                                Date of violation and corresponding penalty
                                                         -------------------------------------------------------
        U.S. Code citation             Civil monetary      10/23/2004    10/23/2008    10/23/2012
                                     penalty description  through  10/  through  10/  through  11/   11/02/2015
                                                             22/2008       22/2012       01/2015     to present
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                  Civil Monetary Penalty Imposed by the Commission in an Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of the     For any person other      $130,000      $140,000      $140,000      $206,244
 Commodity Exchange Act).            than a registered
                                     entity \1\.
7 U.S.C. 13a (Section 6b of the     For a registered           625,000       675,000       700,000     1,136,100
 Commodity Exchange Act).            entity \1\ or any
                                     of its directors,
                                     officers or
                                     employees.
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             Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of the   Any Person..........       130,000       140,000       140,000       227,220
 Commodity Exchange Act).
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\1\ The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).

    (2) For manipulation or attempted manipulation violations:

                                           Table 2 to Paragraph (b)(2)
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                                                                Date of violation and corresponding penalty
                                                         -------------------------------------------------------
        U.S. Code citation             Civil monetary      10/23/2004    05/22/2008    08/15/2011
                                     penalty description  through  05/  through  08/  through  11/   11/02/2015
                                                             21/2008       14/2011       01/2015     to present
----------------------------------------------------------------------------------------------------------------
                  Civil Monetary Penalty Imposed by the Commission in an Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of the     For any person other      $130,000    $1,000,000    $1,025,000    $1,487,712
 Commodity Exchange Act).            than a registered
                                     entity \1\.
7 U.S.C. 13a (Section 6b of the     For a registered           625,000     1,000,000     1,025,000     1,487,712
 Commodity Exchange Act).            entity \1\ or any
                                     of its directors,
                                     officers or
                                     employees.
----------------------------------------------------------------------------------------------------------------
             Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of the   Any Person..........       130,000     1,000,000     1,025,000     1,487,712
 Commodity Exchange Act).
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\1\ The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).

* * * * *

    Issued in Washington, DC, on January 21, 2025, by the 
Commission.
Robert Sidman,
Deputy Secretary of the Commission.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix to Annual Adjustment of Civil Monetary Penalties To Reflect 
Inflation--2025--Commission Voting Summary

    On this matter, Chairman Behnam and Commissioners Johnson, 
Goldsmith Romero, Mersinger, and Pham voted in the affirmative. No 
Commissioner voted in the negative.

[FR Doc. 2025-01724 Filed 1-23-25; 8:45 am]
BILLING CODE 6351-01-P
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