83 FR 1396 - Adjustments to Civil Monetary Penalty Amounts
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 8 (January 11, 2018)
Federal Register Volume 83, Issue 8 (January 11, 2018)
| Page Range | 1396-1399 | |
| FR Document | 2018-00387 |
[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)] [Notices] [Pages 1396-1399] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-00387] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \5\ 28 U.S.C. 2461 note Sec. 4. \6\ Release Nos. 33-10276; 34-79749; IA-4599; IC-32414 (effective Jan. 18, 2017). --------------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \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)]. --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78u-1(a)(3). --------------------------------------------------------------------------- Below is the Commission's calculation of the new penalty amounts for the penalties it administers: ---------------------------------------------------------------------------------------------------------------- 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 ---------------------------------------------------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- 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
![1396 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices
are not present here. The proposed change that are filed with the 1934 (the ‘‘Exchange Act’’), the
changes are limited to fees for Internal Commission, and all written Investment Company Act of 1940, the
Distributers who use the data for communications relating to the Investment Advisers Act of 1940, and
internal use only and not for the proposed rule change between the certain penalties under the Sarbanes-
redistribution and sale to external Commission and any person, other than Oxley Act of 2002. These amounts are
parties. those that may be withheld from the effective beginning on January 15, 2018,
public in accordance with the and will apply to all penalties imposed
(C) Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be after that date for violations of the
Statement on Comments on the available for website viewing and aforementioned statutes that occurred
Proposed Rule Change Received from printing in the Commission’s Public after November 2, 2015.
Members, Participants or Others Reference Room, 100 F Street NE, FOR FURTHER INFORMATION CONTACT:
The Exchange has neither solicited Washington, DC 20549, on official James A. Cappoli, Assistant General
nor received written comments on the business days between the hours of Counsel, Office of the General Counsel,
proposed rule change. 10:00 a.m. and 3:00 p.m. Copies of the at (202) 551–7923, or Stephen M. Ng,
filing also will be available for Senior Special Counsel, Office of the
III. Date of Effectiveness of the Proposed
inspection and copying at the principal General Counsel, at (202) 551–7957.
Rule Change and Timing for
office of the Exchange. All comments SUPPLEMENTARY INFORMATION:
Commission Action
received will be posted without change.
The foregoing rule change has become Persons submitting comments are I. Background
effective pursuant to Section 19(b)(3)(A) cautioned that we do not redact or edit This notice is being published
of the Act 23 and paragraph (f) of Rule personal identifying information from pursuant to the 2015 Act,1 which
19b–4 thereunder.24 At any time within comment submissions. You should amended the Federal Civil Penalties
60 days of the filing of the proposed rule submit only information that you wish Inflation Adjustment Act of 1990 (the
change, the Commission summarily may to make available publicly. All ‘‘Inflation Adjustment Act’’).2 The
temporarily suspend such rule change if submissions should refer to File Inflation Adjustment Act previously had
it appears to the Commission that such Number SR–CboeBZX–2017–019 and been amended by the Debt Collection
action is necessary or appropriate in the should be submitted on or before Improvement Act of 1996 (the ‘‘DCIA’’) 3
public interest, for the protection of February 1, 2018. to require that each federal agency adopt
investors, or otherwise in furtherance of For the Commission, by the Division of regulations at least once every four years
the purposes of the Act. Trading and Markets, pursuant to delegated that adjust for inflation the CMPs that
IV. Solicitation of Comments authority.25 can be imposed under the statutes
Eduardo A. Aleman, administered by the agency. Pursuant to
Interested persons are invited to Assistant Secretary. this requirement, the Commission
submit written data, views, and previously adopted regulations in 1996,
[FR Doc. 2018–00309 Filed 1–10–18; 8:45 am]
arguments concerning the foregoing, 2001, 2005, 2009, and 2013 to adjust the
BILLING CODE 8011–01–P
including whether the proposed rule maximum amount of the CMPs that
change is consistent with the Act. could be imposed under the statutes the
Comments may be submitted by any of SECURITIES AND EXCHANGE Commission administers.4
the following methods: COMMISSION The 2015 Act replaces the inflation
Electronic Comments adjustment formula prescribed in the
[Release Nos. 33–10451; 34–82455; IA– DCIA with a new formula for calculating
• Use the Commission’s internet 4842; IC–32963] the inflation-adjusted amount of CMPs.
comment form (http://www.sec.gov/ The 2015 Act requires that agencies use
rules/sro.shtml); or Adjustments to Civil Monetary Penalty
Amounts this new formula to re-calculate the
• Send an email to rule-comments@ inflation-adjusted amounts of the
sec.gov. Please include File Number SR– AGENCY: Securities and Exchange
CboeBZX–2017–019 on the subject line. Commission. 1 Public Law 114–74 Sec. 701, 129 Stat. 599–601
ACTION: Notice of annual inflation (Nov. 2, 2015), codified at 28 U.S.C. 2461 note.
Paper Comments 2 Public Law 101–410, 104 Stat. 890–892 (1990),
adjustment of civil monetary penalties.
• Send paper comments in triplicate codified at 28 U.S.C. 2461 note.
3 Public Law 104–134, Title III, § 31001(s)(1), 110
to Brent J. Fields, Secretary, Securities SUMMARY: The Securities and Exchange Stat. 1321–373 (1996), codified at 28 U.S.C. 2461
and Exchange Commission, 100 F Street Commission (the ‘‘Commission’’) is note.
NE, Washington, DC 20549–1090. publishing this notice pursuant to the 4 See Release Nos. 33–7361, 34–37912, IA–1596,
All submissions should refer to File Federal Civil Penalties Inflation IC–22310, dated November 1, 1996 (effective
Adjustment Act Improvements Act of December 9, 1996), previously found at 17 CFR
Number SR–CboeBZX–2017–019. This 201.1001 and Table I to Subpart E of Part 201;
file number should be included on the 2015 (the ‘‘2015 Act’’). This Act requires Release Nos. 33–7946, 34–43897, IA–1921, IC–
subject line if email is used. To help the all agencies to annually adjust for 24846, dated January 31, 2001 (effective February
Commission process and review your inflation the civil monetary penalties 2, 2001), previously found at 17 CFR 201.1002 and
Table II to Subpart E of Part 201; Release Nos. 33–
comments more efficiently, please use that can be imposed under the statutes 8530, 34–51136, IA–2348, IC–26748, dated
only one method. The Commission will administered by the agency and publish February 9, 2005 (effective February 14, 2005),
post all comments on the Commission’s the adjusted amounts in the Federal previously found at 17 CFR 201.1003 and Table III
internet website (http://www.sec.gov/ Register. This notice sets forth the to Subpart E of Part 201; Release Nos. 33–9009, 34–
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59449, IA–2845, IC–28635, dated February 25, 2009
rules/sro.shtml). Copies of the annual inflation adjustment of the (effective March 3, 2009), previously found at 17
submission, all subsequent maximum amount of civil monetary CFR 201.1004 and Table IV to Subpart E of Part 201;
amendments, all written statements penalties (‘‘CMPs’’) administered by the and Release Nos. 33–9387, 34–68994, IA–3557, IC–
Commission under the Securities Act of 30408, dated February 27, 2013 (effective March 5,
with respect to the proposed rule 2013), previously found at 17 CFR 201.1005 and
1933, the Securities Exchange Act of Table V to Subpart E of Part 201. The penalty
23 15 U.S.C. 78s(b)(3)(A). amounts contained in these releases have now been
24 17 CFR 240.19b–4(f). 25 17 CFR 200.30–3(a)(12). consolidated into Table I to 17 CFR 201.1001.
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penalties they administer on an annual federal court pursuant to federal law.7 Pursuant to the 2015 Act, the penalty
basis and publish these new amounts in This definition applies to the monetary amounts in the 2017 Adjustment are
the Federal Register by January 15 of penalty provisions contained in four adjusted for inflation by increasing them
each year.5 The Commission previously statutes administered by the by the percentage change between the
published the first annual adjustment Commission: The Securities Act, the Consumer Price Index for all Urban
required by the 2015 Act on January 6, Exchange Act, the Investment Company Consumers (‘‘CPI–U’’) for October 2016
2017 (the ‘‘2017 Adjustment’’).6 As part Act, and the Investment Advisers Act. and the October 2017 CPI–U.10 OMB has
of the 2017 Adjustment, the In addition, the Sarbanes-Oxley Act of provided its calculation of this
Commission promulgated 17 CFR 2002 provides the Public Company multiplier (the ‘‘CPI–U Multiplier’’) to
201.1001(a) and Table I to Subsection Accounting Oversight Board (the agencies.11 The new penalty amounts
1001, which lists the penalty amounts ‘‘PCAOB’’) authority to levy civil are determined by multiplying the
for all violations that occurred on or monetary penalties in its disciplinary current penalty amounts by the CPI–U
before November 2, 2015. For violations proceedings pursuant to 15 U.S.C. Multiplier and then rounding to the
occurring after November 2, 2015, 7215(c)(4)(D).8 The definition of a CMP nearest dollar.
Subsection 1001(b) provides that the in the Inflation Adjustment Act For example, the CMP for certain
applicable penalty amounts will be insider trading violations by controlling
encompasses such civil monetary
adjusted annually based on the formula persons under Exchange Act Section
penalties.9
set forth in the 2015 Act. Subsection 21A(a)(3) 12 was readjusted for inflation
1001(b) further provides that these II. Adjusting the commission’s penalty as part of the 2017 Adjustment to
adjusted amounts will be published in amounts for inflation $2,011,061. To determine the new CMP
the Federal Register and on the under this provision, the Commission
Commission’s website. This notice sets forth the annual multiplies this amount by the CPI–U
A CMP is defined in relevant part as inflation adjustment required by the Multiplier of 1.02041, and rounds to the
any penalty, fine, or other sanction that: 2015 Act for all CMPs under the nearest dollar. Thus, the new CMP for
(1) Is for a specific amount, or has a Securities Act, the Exchange Act, the Exchange Act Section 21A(a)(3) is
maximum amount, as provided by Investment Company Act, and the $2,052,107.
federal law; and (2) is assessed or Investment Advisers Act, and certain Below is the Commission’s
enforced by an agency in an civil monetary penalties under the calculation of the new penalty amounts
administrative proceeding or by a Sarbanes-Oxley Act. for the penalties it administers:
2017 2018
Adjustment CPI–U Adjusted
U.S. Code citation Civil monetary penalty description penalty multiplier penalty
amounts amounts
15 U.S.C. 77h–1(g) (Securities Act Sec. For natural person .......................................... $8,289 1.02041 $8,458
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/substantial losses or 165,787 1.02041 169,171
risk of losses to others or gains to self.
For any other person/fraud/substantial losses 801,299 1.02041 817,654
or risk of losses to others or gain to self.
15 U.S.C. 77t(d) (Securities Act Sec. 20(d)) .. For natural person .......................................... 9,054 1.02041 9,239
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/substantial losses or 181,071 1.02041 184,767
risk of losses to others.
For any other person/fraud/substantial losses 905,353 1.02041 923,831
or risk of losses to others.
15 U.S.C. 78u(d)(3) (Exchange Act Sec. For natural person .......................................... 9,054 1.02041 9,239
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/substantial losses or 181,071 1.02041 184,767
risk of losses to others or gains to self.
For any other person/fraud/substantial losses 905,353 1.02041 923,831
or risk of losses to others or gain to self.
15 U.S.C. 78u–1(a)(3) (Exchange Act Sec. Insider Trading—controlling person ............... 2,011,061 1.02041 2,052,107
21A(a)(3)).
5 28 U.S.C. 2461 note Sec. 4. 15 U.S.C. 7217. The Commission may enforce such 11 Office of Management and Budget,
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6 Release Nos. 33–10276; 34–79749; IA–4599; IC– orders in federal district court pursuant to Section Implementation of Penalty Inflation Adjustments
32414 (effective Jan. 18, 2017). 21(e) of the Exchange Act. As a result, penalties for 2018, Pursuant to the Federal Civil Penalties
7 28 U.S.C. 2461 note Sec. 3(2). assessed by the PCAOB in its disciplinary Inflation Adjustment Act Improvements Act of 2015
proceedings are penalties ‘‘enforced’’ by the (December 15, 2017), available at https://
8 15 U.S.C. 7215(c)(4)(D).
Commission for purposes of the Inflation www.whitehouse.gov/wp-content/uploads/2017/11/
9 The Commission may by order affirm, modify,
Adjustment Act. See Adjustments to Civil Monetary M-18-03.pdf. This multiplier represents the
remand, or set aside sanctions, including civil Penalty Amounts, Release No. 33–8530 (Feb. 4, percentage increase between the October 2016 CPI–
monetary penalties, imposed by the PCAOB. See 2005) [70 FR 7606 (Feb. 14, 2005)]. U and the October 2017 CPI–U, plus 1.
Section 107(c) of the Sarbanes-Oxley Act of 2002, 10 28 U.S.C. 2461 note Sec. 5. 12 15 U.S.C. 78u–1(a)(3).
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Dated: January 2018. Cboe BYX Exchange, Inc., (previously hereto, an Appendix B containing two
Brent J. Fields, known as Bats BYX Exchange, Inc.), charts, one listing the current Equity
Secretary. Cboe BZX Exchange, Inc. (previously Execution Venues, each with its rank
[FR Doc. 2018–00387 Filed 1–10–18; 8:45 am] known as Bats BZX Exchange), Inc., and tier, and one listing the current
BILLING CODE 8011–01–P Cboe EDGA Exchange, Inc. (previously Options Execution Venues, each with its
known as Bats EDGA Exchange, Inc.), rank and tier. The Commission is
Cboe EDGX Exchange, Inc. (previously publishing this notice to solicit
SECURITIES AND EXCHANGE known as Bats EDGX Exchange, Inc.), comments from interested persons on
COMMISSION BOX Options Exchange LLC, Cboe C2 Amendment No. 4.5
Exchange, Inc., Cboe Exchange, Inc.,
[Release No. 34–82451; File No. 4–698] II. Description of the Plan
Chicago Stock Exchange, Inc., Financial
Industry Regulatory Authority, Inc., Set forth in this Section II is the
Joint Industry Plan; Notice of Filing statement of the purpose and summary
and Immediate Effectiveness of Nasdaq ISE, LLC (previously known as
International Securities Exchange, Inc.), of Amendment No. 4, along with the
Amendment No. 4 to the National information required by Rule 608(a)(4)
Market System Plan Governing the Investors’ Exchange, LLC, Nasdaq
GEMX (previously known as ISE and (5) under the Exchange Act,6
Consolidated Audit Trail by Cboe BYX
Gemini, LLC), Nasdaq MRX (previously prepared and submitted by the
Exchange, Inc., Cboe BZX Exchange,
known as ISE Mercury, LLC), Miami Participants to the Commission.7
Inc., Cboe EDGA Exchange, Inc., Cboe
EDGX Exchange, Inc., BOX Options International Securities Exchange, LLC, A. Description of the Amendments to
Exchange LLC, Cboe C2 Exchange, MIAX PEARL, LLC, Nasdaq BX, Inc. the CAT NMS Plan
Inc., Cboe Exchange, Inc., Chicago (previously known as NASDAQ BX,
Inc.), Nasdaq PHLX LLC (previously (1) Executive Summary
Stock Exchange, Inc., Financial
Industry Regulatory Authority, Inc., known as NASDAQ PHLX LLC), The The following provides an executive
Investors’ Exchange LLC, Miami NASDAQ Stock Market LLC, National summary of the CAT funding model
International Securities Exchange, Stock Exchange, Inc., New York Stock approved by the Operating Committee,
LLC, MIAX PEARL, LLC, Nasdaq BX, Exchange LLC, NYSE Arca, Inc., and as well as Participants’ obligations
Inc., Nasdaq GEMX, LLC, Nasdaq ISE, NYSE American (previously known as related to the payment of CAT Fees
LLC, Nasdaq MRX, LLC, Nasdaq PHLX NYSE MKT, LLC) (collectively, the calculated pursuant to the CAT funding
LLC, The Nasdaq Stock Market LLC, ‘‘Participants,’’ ‘‘self-regulatory model. A detailed description of the
New York Stock Exchange LLC, NYSE organizations’’ or ‘‘SROs’’) filed with the CAT funding model and the CAT Fees
Arca, Inc., NYSE American, LLC and Securities and Exchange Commission follows this executive summary.
NYSE National, Inc. (‘‘Commission’’ or ‘‘SEC’’) pursuant to • CAT Costs. The CAT funding model
Section 11A(a)(3) of the Securities is designed to establish CAT-specific
January 5, 2018. Exchange Act of 1934 (‘‘Exchange fees to collectively recover the costs of
Act’’) 2 and Rule 608 thereunder,3 a building and operating the CAT from all
I. Introduction
proposal to amend the Plan CAT Reporters, including Industry
On December 11, 2017, the Operating (‘‘Amendment No. 4’’).4 The proposed Members and Participants. The overall
Committee for CAT NMS, LLC (the amendment would add a fee schedule to CAT costs used in calculating the CAT
‘‘Company’’), on behalf of the following a new Exhibit B of the Plan which sets Fees in this fee filing are comprised of
parties to the National Market System forth the CAT fees to be paid by the Plan Processor CAT costs and non-Plan
Plan Governing the Consolidated Audit Participants. A copy of proposed Exhibit Processor CAT costs incurred, and
Trail (the ‘‘CAT NMS Plan’’ or ‘‘Plan’’): 1 B to the CAT NMS Plan is attached as estimated to be incurred, from
Appendix A hereto. The Participants November 21, 2016 through November
1 On February 27, 2015, BATS–Y Exchange, Inc.
have also included, and as attached 21, 2017. Although the CAT costs from
(n/k/a Cboe BYX Exchange, Inc.), BATS Exchange,
Inc. (n/k/a Cboe BZX Exchange, Inc.), BOX Options
November 21, 2016 through November
Exchange LLC, C2 Options Exchange, Incorporated Participant. See Securities Exchange Act Release 21, 2017 were used in calculating the
(n/k/a Cboe C2 Exchange, Inc.), Chicago Board No. 79898, 82 FR 9250 (February 3, 2017). CAT Fees, the CAT Fees set forth in this
2 15 U.S.C 78k–1(a)(3).
Options Exchange, Incorporated (n/k/a Cboe fee filing would be in effect until the
3 17 CFR 242.608.
Exchange, Inc.), Chicago Stock Exchange, Inc.,
EDGA Exchange, Inc. (n/k/a Cboe EDGA Exchange, 4 See Letter from Michael Simon, CAT NMS Plan automatic sunset date, as discussed
Inc.), EDGX Exchange, Inc. (n/k/a Cboe EDGX Operating Committee Chair, to Brent J. Fields, below. (See Section A(2)(E) below)
Exchange, Inc.), Financial Industry Regulatory Secretary, Commission, dated December 11, 2017 • Bifurcated Funding Model. The
Authority, Inc., International Securities Exchange, (‘‘Transmittal Letter’’). The Participants previously CAT NMS Plan requires a bifurcated
LLC (n/k/a Nasdaq ISE, LLC), ISE Gemini, LLC (n/ submitted an amendment to the CAT NMS Plan to funding model, where costs associated
k/a Nasdaq GEMX, LLC), Miami International establish Participant fees (‘‘Amendment No. 2’’).
Securities Exchange LLC, NASDAQ OMX BX, Inc. See Letter from Michael Simon, Chair, CAT NMS with building and operating the CAT
(n/k/a Nasdaq BX, Inc.), NASDAQ OMX PHLX LLC Plan Operating Committee, to Brent J. Fields, would be borne by (1) Participants and
(n/k/a Nasdaq PHLX LLC), The NASDAQ Stock Secretary, Commission, dated May 22, 2017. See Industry Members that are Execution
Market LLC, National Stock Exchange, Inc. (n/k/a also Securities Exchange Act Release No. 80930 Venues for Eligible Securities through
NYSE National, Inc.), New York Stock Exchange (June 14, 2017), 82 FR 28180 (June 20, 2017),
LLC, NYSE MKT LLC (n/k/a NYSE American LLC), available at https://www.sec.gov/rules/sro/nms/ fixed tier fees based on market share,
and NYSE Arca, Inc. filed with the Commission, 2017/34-80930.pdf. The Commission issued an and (2) Industry Members (other than
pursuant to Section 11A of the Exchange Act and Order of Summary Abrogation of Amendment No. alternative trading systems (‘‘ATSs’’)
Rule 608 of Regulation NMS thereunder, the CAT 2 on July 21, 2017, concluding that the amendment that execute transactions in Eligible
NMS Plan. 15 U.S.C. 78k–1; 17 CFR 242.608. The raised concerns and the justifications provided by
srobinson on DSK9F5VC42PROD with NOTICES
Plan was published for comment in the Federal the Participants were not sufficient for the Securities (‘‘Execution Venue ATSs’’))
Register on May 17, 2016, and approved by the Commission to determine whether the amendment through fixed tier fees based on message
Commission, as modified, on November 15, 2016. was consistent with the Act. See Securities and traffic for Eligible Securities. (See
See Securities Exchange Act Release Nos. 77724 Exchange Commission Release No. 81189 (July 21, Section A(2) below)
(April 27, 2016), 81 FR 30614 (May 17, 2016); 79318 2017), 82 FR 35005 (July 27, 2017). On October 30,
(November 15, 2016), 81 FR 84696 (November 23, 2017, the Participants filed Amendment No. 3 to the
5 17 CFR 242.608.
2016). On January 30, 2017, the Commission CAT NMS Plan, which has been withdrawn and
6 See 17 CFR 242.608(a)(4) and (a)(5).
noticed for immediate effectiveness an amendment replaced and superseded in its entirety by
to the Plan to add MIAX PEARL, LLC as a Amendment No. 4. 7 See Transmittal Letter, supra note 4.
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Document Created: 2018-01-11 04:54:03
Document Modified: 2018-01-11 04:54:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice of annual inflation adjustment of civil monetary penalties. | |
| 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. | |
| FR Citation | 83 FR 1396 |
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