83 FR 29546 - Fees for Reviews of the Rule Enforcement Programs of Designated Contract Markets and Registered Futures Associations

COMMODITY FUTURES TRADING COMMISSION

Federal Register Volume 83, Issue 122 (June 25, 2018)

Page Range29546-29547
FR Document2018-13511

The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') charges fees to designated contract markets and registered futures associations to recover the costs incurred by the Commission in the operation of its program of oversight of self- regulatory organization rule enforcement programs, specifically National Futures Association (``NFA''), a registered futures association, and the designated contract markets. Fees collected from each self-regulatory organization are deposited in the Treasury of the United States as miscellaneous receipts. The calculation of the fee amounts charged for 2017 by this notice is based upon an average of actual program costs incurred during fiscal year (``FY'') 2014, FY 2015, and FY 2016.

Federal Register, Volume 83 Issue 122 (Monday, June 25, 2018)
[Federal Register Volume 83, Number 122 (Monday, June 25, 2018)]
[Notices]
[Pages 29546-29547]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-13511]



[[Page 29546]]

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COMMODITY FUTURES TRADING COMMISSION


Fees for Reviews of the Rule Enforcement Programs of Designated 
Contract Markets and Registered Futures Associations

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of 2017 schedule of fees.

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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or 
``Commission'') charges fees to designated contract markets and 
registered futures associations to recover the costs incurred by the 
Commission in the operation of its program of oversight of self-
regulatory organization rule enforcement programs, specifically 
National Futures Association (``NFA''), a registered futures 
association, and the designated contract markets. Fees collected from 
each self-regulatory organization are deposited in the Treasury of the 
United States as miscellaneous receipts. The calculation of the fee 
amounts charged for 2017 by this notice is based upon an average of 
actual program costs incurred during fiscal year (``FY'') 2014, FY 
2015, and FY 2016.

DATES: Each self-regulatory organization is required to remit 
electronically the applicable fee on or before August 24, 2018.

FOR FURTHER INFORMATION CONTACT: Mary Jean Buhler, Chief Financial 
Officer, Commodity Futures Trading Commission; (202) 418-5089; Three 
Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. For 
information on electronic payment, contact Jennifer Fleming; (202) 418-
5034; Three Lafayette Centre, 1155 21st Street NW, Washington, DC 
20581.

SUPPLEMENTARY INFORMATION:

I. Background Information

A. General

    This notice relates to fees for the Commission's review of the rule 
enforcement programs at the registered futures associations \1\ and 
designated contract markets (``DCM''), each of which is a self-
regulatory organization (``SRO'') regulated by the Commission. The 
Commission recalculates the fees charged each year to cover the costs 
of operating this Commission program.\2\ The fees are set each year 
based on direct program costs, plus an overhead factor. The Commission 
calculates actual costs, then calculates an alternate fee taking volume 
into account, and then charges the lower of the two.\3\
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    \1\ National Futures Association is the only registered futures 
association.
    \2\ See Section 237 of the Futures Trading Act of 1982, 7 U.S.C. 
16a, and 31 U.S.C. 9701. For a broader discussion of the history of 
Commission fees, see 52 FR 46070, Dec. 4, 1987.
    \3\ 58 FR 42643, Aug. 11, 1993, and 17 CFR part 1, appendix B.
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B. Overhead Rate

    The fees charged by the Commission to the SROs are designed to 
recover program costs, including direct labor costs and overhead. The 
overhead rate is calculated by dividing total Commission-wide overhead 
direct program labor costs into the total amount of the Commission-wide 
overhead pool. For this purpose, direct program labor costs are the 
salary costs of personnel working in all Commission programs. Overhead 
costs generally consist of the following Commission-wide costs: 
Indirect personnel costs (leave and benefits), rent, communications, 
contract services, utilities, equipment, and supplies. This formula has 
resulted in the following overhead rates for the most recent three 
years (rounded to the nearest whole percent): 180 percent for FY 2014, 
211 percent for FY 2015, and 190 percent for FY 2016.

C. Conduct of SRO Rule Enforcement Reviews

    Under the formula adopted by the Commission in 1993, the Commission 
calculates the fee to recover the costs of its rule enforcement reviews 
and examinations, based on the three-year average of the actual cost of 
performing such reviews and examinations at each SRO. The cost of 
operation of the Commission's SRO oversight program varies from SRO to 
SRO, according to the size and complexity of each SRO's program. The 
three-year averaging computation method is intended to smooth out year-
to-year variations in cost. Timing of the Commission's reviews and 
examinations may affect costs--a review or examination may span two 
fiscal years and reviews and examinations are not conducted at each SRO 
each year.
    As noted above, adjustments to actual costs may be made to relieve 
the burden on an SRO with a disproportionately large share of program 
costs. The Commission's formula provides for a reduction in the 
assessed fee if an SRO has a smaller percentage of United States 
industry contract volume than its percentage of overall Commission 
oversight program costs. This adjustment reduces the costs so that, as 
a percentage of total Commission SRO oversight program costs, they are 
in line with the pro rata percentage for that SRO of United States 
industry-wide contract volume.
    The calculation is made as follows: The fee required to be paid to 
the Commission by each DCM is equal to the lesser of actual costs based 
on the three-year historical average of costs for that DCM or one-half 
of average costs incurred by the Commission for each DCM for the most 
recent three years, plus a pro rata share (based on average trading 
volume for the most recent three years) of the aggregate of average 
annual costs of all DCMs for the most recent three years.
    The formula for calculating the second factor is: 0.5a + 0.5 vt = 
current fee. In this formula, ``a'' equals the average annual costs, 
``v'' equals the percentage of total volume across DCMs over the last 
three years, and ``t'' equals the average annual costs for all DCMs. 
NFA has no contracts traded; hence, its fee is based simply on costs 
for the most recent three fiscal years. The following table summarizes 
the data used in the calculations of the resulting fee for each entity:

                                                    Table 1--Summary of Data Used in Fee Calculations
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                                                            Actual total costs              3-Year
                                                 ---------------------------------------   average       3-Year      Adjusted       2016         2017
                                                                                            actual      average       volume    Actual  fee    Assessed
                                                    FY 2014      FY 2015      FY 2016       costs     volume  (%)     costs                      fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBOE Futures....................................  ...........     $158,209     $227,059     $128,423         1.31      $71,004      $73,074      $71,004
Chicago Board of Trade..........................      $55,515       17,938       28,720       34,058        29.61      170,554       79,476       34,058
Chicago Mercantile Exchange.....................      225,701      540,151      372,278      379,377        44.66      421,246      385,923      379,377
ICE Futures U.S.................................       81,176      105,864      386,719      191,253         9.22      143,431      153,429      143,431
Minneapolis Grain Exchange......................       47,648      147,983       14,314       69,981         0.05       35,250       69,741       35,250
NADEX North American............................          980  ...........       81,758       27,579         0.14       14,516       17,505       14,516

[[Page 29547]]

 
New York Mercantile Exchange....................      225,672      118,701      242,792      195,722        14.49      172,990      159,897      172,990
One Chicago.....................................       31,196          289          282       10,589         0.29        6,798       28,384        6,798
NASDAQ..........................................  ...........  ...........  ...........  ...........         0.21        1,089  ...........  ...........
ERIS Exchange...................................  ...........  ...........  ...........  ...........         0.01           68  ...........  ...........
NY LIFFE........................................  ...........  ...........  ...........  ...........  ...........  ...........        4,909  ...........
ELX Futures.....................................  ...........  ...........  ...........  ...........  ...........  ...........       22,378  ...........
KCBT............................................  ...........  ...........  ...........  ...........  ...........  ...........          186  ...........
                                                 -------------------------------------------------------------------------------------------------------
    Subtotal....................................      667,888    1,089,134    1,353,921   $1,036,981          100    1,036,945      994,901      857,423
National Futures Association....................      292,102      401,337      282,405      325,281  ...........  ...........      293,312      325,281
                                                 -------------------------------------------------------------------------------------------------------
        Total...................................      959,990    1,490,471    1,636,326    1,362,262  ...........  ...........   $1,288,214    1,182,704
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Note to Table 1: The 2017 Fee is the lesser of the 3-Year Average Actual Cost or the Adjusted Volume Cost. NY LIFFE, ELX, and KCBT are either Vacated or
  Dormant, but had direct labor costs in 2013 that produced a fee in 2016, based on the 3-Year Average.

    An example of how the fee is calculated for one exchange, the 
Chicago Board of Trade, is set forth here:
    a. Actual three-year average costs = $34,058.
    b. The alternative computation is: (.5) ($34,058) + (.5) (.2961) 
($1,036,981) = $170,554.
    c. The fee is the lesser of a or b; in this case $34,058.
    As noted above, the alternative calculation based on contracts 
traded is not applicable to NFA because it is not a DCM and has no 
contracts traded. The Commission's average annual cost for conducting 
oversight review of the NFA rule enforcement program during fiscal 
years 2014 through 2016 was $325,281. The fee to be paid by the NFA for 
the current fiscal year is $325,281.

II. Schedule of Fees

    Fees for the Commission's review of the rule enforcement programs 
at the registered futures associations and DCMs regulated by the 
Commission are as shown in the following table:

                                            Table 2--Schedule of Fees
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                                                                                                     2017 Fee:
                                                      3-Year          3-Year         Adjusted        lesser of
                                                      average         average      volume  costs     actual or
                                                   actual costs     volume (%)                    calculated fee
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CBOE Futures....................................        $128,423            1.31         $71,004         $71,004
Chicago Board of Trade..........................          34,058           29.61         170,554          34,058
Chicago Mercantile Exchange.....................         379,377           44.66         421,246         379,377
ICE Futures U.S.................................         191,253            9.22         143,431         143,431
Minneapolis Grain Exchange......................          69,981            0.05          35,250          35,250
NADEX North American............................          27,579            0.14          14,516          14,516
New York Mercantile Exchange....................         195,722           14.49         172,990         172,990
One Chicago.....................................          10,589            0.29           6,798           6,798
NASDAQ..........................................  ..............            0.21           1,089  ..............
ERIS Exchange...................................  ..............            0.01              68  ..............
NY LIFFE........................................  ..............  ..............  ..............  ..............
ELX Futures.....................................  ..............  ..............  ..............  ..............
KCBT............................................  ..............  ..............  ..............  ..............
                                                 ---------------------------------------------------------------
    Subtotal....................................       1,036,981             100       1,036,945         857,423
National Futures Association....................         325,281  ..............  ..............         325,281
                                                 ---------------------------------------------------------------
        Total...................................       1,362,262  ..............  ..............       1,182,704
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III. Payment Method

    The Debt Collection Improvement Act (``DCIA'') requires deposits of 
fees owed to the government by electronic transfer of funds. See 31 
U.S.C. 3720. For information about electronic payments, please contact 
Jennifer Fleming at (202) 418-5034 or [email protected], or see the 
CFTC website at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.
    Fees collected from each self-regulatory organization shall be 
deposited in the Treasury of the United States as miscellaneous 
receipts. See 7 U.S.C. 16a.

    Issued in Washington, DC, on June 19, 2018, by the Commission.
Christopher Kirkpatrick,
Secretary of the Commission.
[FR Doc. 2018-13511 Filed 6-22-18; 8:45 am]
 BILLING CODE 6351-01-P


Current View
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of 2017 schedule of fees.
DatesEach self-regulatory organization is required to remit electronically the applicable fee on or before August 24, 2018.
ContactMary Jean Buhler, Chief Financial Officer, Commodity Futures Trading Commission; (202) 418-5089; Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. For information on electronic payment, contact Jennifer Fleming; (202) 418- 5034; Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581.
FR Citation83 FR 29546 

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