2017-08222
Federal Register, Volume 82 Issue 77 (Monday, April 24, 2017)
[Federal Register Volume 82, Number 77 (Monday, April 24, 2017)]
[Notices]
[Pages 18898-18900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08222]
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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 2016 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. The calculation of
the fee amounts charged for 2016 by this notice is based upon an
average of actual program costs incurred during fiscal year (``FY'')
2013, FY 2014, and FY 2015.
DATES: Effective: Each self-regulatory organization is required to
remit electronically the applicable fee on or before June 23, 2017.
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:
[[Page 18899]]
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): 181 percent for FY 2013,
and 180 percent for FY 2014, and 211 percent for FY 2015.
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. This table summarizes the data used in the
calculations of the resulting fee for each entity:
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Actual total costs
------------------------------------ 3-year average 3-year percent Volume 2016 Assessed
FY 2013 FY 2014 FY 2015 actual costs of volume adjusted costs fee
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CBOE Futures........................................ $235,567 .......... $158,209 $131,259 1.22 $73,074 $73,074
Chicago Board of Trade.............................. 164,974 $55,515 17,938 79,476 30.08 223,017 79,476
Chicago Mercantile Exchange......................... 391,917 225,701 540,151 385,923 44.03 461,189 385,923
ELX Futures......................................... 134,267 .......... .......... 44,756 0.00 22,378 22,378
ICE Futures U.S..................................... 360,223 81,176 105,864 182,421 10.21 153,429 153,429
Kansas City Board of Trade.......................... 559 .......... .......... 186 0.06 467 186
Minneapolis Grain Exchange.......................... 220,975 47,648 147,983 138,868 0.05 69,741 69,741
NADEX North American................................ 101,252 980 .......... 34,077 0.08 17,505 17,505
New York Mercantile Exchange........................ 135,316 225,672 118,701 159,897 13.84 164,294 159,897
NYSE LIFFE US....................................... 24,802 .......... .......... 8,267 0.13 4,909 4,909
One Chicago......................................... 128,599 31,196 289 53,362 0.28 28,384 28,384
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Subtotal........................................ 1,898,452 667,888 1,089,134 1,218,491 100 1,218,387 994,902
National Futures Association........................ 186,499 292,102 401,337 293,312 .............. .............. 293,312
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Total........................................... 2,084,950 959,990 1,490,471 1,511,804 .............. .............. 1,288,214
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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 equal $79,476.
b. The alternative computation is: (.5) ($79,476) + (.5) (.30)
($1,218,491) = $223,017.
c. The fee is the lesser of a or b; in this case $79,476.
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
[[Page 18900]]
rule enforcement program during fiscal years 2013 through 2015 was
$293,312. The fee to be paid by the NFA for the current fiscal year is
$293,312.
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:
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2016 Fee lesser
3-Year average 3-Year percent of actual or
actual cost of volume calculated fee
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CBOE Futures................................................ $131,259 1.22 $73,074
Chicago Board of Trade...................................... 79,476 30.08 79,476
Chicago Mercantile Exchange................................. 385,923 44.03 385,923
ELX Futures................................................. 44,756 0.00 22,378
ICE Futures U.S............................................. 182,421 10.21 153,429
Kansas City Board of Trade.................................. 186 0.06 186
Minneapolis Grain Exchange.................................. 138,868 0.05 69,741
NADEX North American........................................ 34,077 0.08 17,505
New York Mercantile Exchange................................ 159,897 13.84 159,897
NYSE LIFFE US............................................... 8,267 0.13 4,909
One Chicago................................................. 53,362 0.2795 28,384
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Subtotal................................................ 1,218,491 100 994,902
National Futures Association................................ 293,312 .............. 293,312
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Total................................................... 1,511,804 .............. 1,288,214
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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 Web site at http://www.cftc.gov, specifically, http://www.cftc.gov/cftc/cftcelectronicpayments.htm.
(Authority: 7 U.S.C. 16a)
Issued in Washington, DC, on April 19, 2017, by the Commission.
Robert N. Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2017-08222 Filed 4-21-17; 8:45 am]
BILLING CODE 6351-01-P