2021-01145
Federal Register, Volume 86 Issue 12 (Thursday, January 21, 2021)
[Federal Register Volume 86, Number 12 (Thursday, January 21, 2021)]
[Notices]
[Pages 6304-6306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01145]
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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 2020 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 2020 by this notice is based upon an average of
actual program costs incurred during fiscal year (``FY'') 2017, FY
2018, and FY 2019.
DATES: Each self-regulatory organization is required to remit
electronically the applicable fee on or before March 22, 2021.
FOR FURTHER INFORMATION CONTACT: Anthony C. Thompson, Executive
Director and Chief Administrative Officer, Commodity Futures Trading
Commission; (202) 418-5697; 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, app. 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): 169 percent for FY 2017,
182 percent for FY 2018, and 174 percent for FY 2019.
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
[[Page 6305]]
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. This 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 total Adjusted 2020 Assessed
FY 2017 FY 2018 FY 2019 actual costs volume % volume costs fee
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Cantor Futures Exchange, L.P............ $60,045 $56,551 .............. $38,866 0.02 $19,527 $19,527
CBOE Futures Exchange, LLC.............. 31,026 16,033 40,517 29,192 1.40 21,600 21,600
Chicago Board of Trade.................. 96,442 2,296 22,835 40,525 32.69 183,313 40,525
Chicago Mercantile Exchange, Inc........ 472,157 235,127 383,995 363,760 42.23 392,507 363,760
Eris Exchange, LLC...................... 53,010 33,170 .............. 28,727 0.01 14,397 14,397
ICE Futures U.S., Inc................... 199,090 50,096 73,464 107,550 6.86 87,993 87,993
Minneapolis Grain Exchange, Inc......... 42,226 438 39,525 27,396 0.05 13,944 13,944
Nasdaq OMX Futures Exchange, Inc........ 251,200 109,413 1,741 120,785 0.59 63,311 63,311
New York Mercantile Exchange, Inc....... 212,798 3,397 45,425 87,206 12.77 107,290 87,206
Nodal Exchange, LLC..................... 100,600 33,162 2,312 45,358 0.06 22,996 22,996
North American Derivatives Exchange, 84,666 6,986 135,159 75,604 0.22 38,891 38,891
Inc....................................
OneChicago, LLC......................... 36,444 61,276 .............. 32,573 0.20 17,276 17,276
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Subtotal............................ 1,639,704 607,946 744,973 997,541 100.00 997,541 791,427
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National Futures Association............ 660,710 507,673 540,821 569,735 .............. .............. 569,735
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Total............................... 2,300,414 1,115,619 1,285,794 1,567,276 100.00 997,541 1,361,161
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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 = $40,525
b. The alternative computation is: [(.5) ($40,525)] + (.5) [(.3269048)
($997,541)] = $183,313
c. The fee is the lesser of a or b; in this case $40,525
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 2017 through 2019 was $569,735. The fee to be paid by the NFA for
the current fiscal year is $569,735.
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 follows:
Table 2--Schedule of Fees
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3-Year average 3-Year total Adjusted 2020 Assessed
actual costs volume % volume costs fee
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Cantor Futures Exchange, L.P.................... $38,866 0.02 $19,527 $19,527
CBOE Futures Exchange, LLC...................... 29,192 1.40 21,600 21,600
Chicago Board of Trade.......................... 40,525 32.69 183,313 40,525
Chicago Mercantile Exchange, Inc................ 363,760 42.23 392,507 363,760
Eris Exchange, LLC.............................. 28,727 0.01 14,397 14,397
ICE Futures U.S., Inc........................... 107,550 6.86 87,993 87,993
Minneapolis Grain Exchange, Inc................. 27,396 0.05 13,944 13,944
Nasdaq OMX Futures Exchange, Inc................ 120,785 0.59 63,311 63,311
New York Mercantile Exchange, Inc............... 87,206 12.77 107,290 87,206
Nodal Exchange, LLC............................. 45,358 0.06 22,996 22,996
North American Derivatives Exchange, Inc........ 75,604 0.22 38,891 38,891
OneChicago, LLC................................. 32,573 0.20 17,276 17,276
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Subtotal.................................... 997,541 100.00 997,541 791,427
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[[Page 6306]]
National Futures Association.................... 569,735 .............. .............. 569,735
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Total....................................... 1,567,276 100.00 997,541 1,361,161
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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 https://www.cftc.gov, specifically, https://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 this 13th day of January, 2021, by
the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2021-01145 Filed 1-19-21; 8:45 am]
BILLING CODE 6351-01-P