2018-13511
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 via the Government Publishing Office [www.gpo.gov]
[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
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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 ...........
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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
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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............................................ .............. .............. .............. ..............
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Subtotal.................................... 1,036,981 100 1,036,945 857,423
National Futures Association.................... 325,281 .............. .............. 325,281
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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