80 FR 209 pgs. 66493-66495 - Fees for Reviews of the Rule Enforcement Programs of Designated Contract Markets and Registered Futures Associations

Type: NOTICEVolume: 80Number: 209Pages: 66493 - 66495
FR document: [FR Doc. 2015-27535 Filed 10-28-15; 8:45 am]
Agency: Commodity Futures Trading Commission
Official PDF Version:  PDF Version
Pages: 66493, 66494, 66495

[top] page 66493

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 2015 schedule of fees.

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, a registered futures association, and the designated contract markets. The calculation of the fee amounts charged for 2015 by this notice is based upon an average of actual program costs incurred during fiscal year ("FY") 2012, FY 2013, and FY 2014.

DATES:

Effective date: Each self-regulatory organization is required to remit electronically the applicable fee on or before December 28, 2015.

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


[top] This notice relates to fees for the Commission's review of the rule enforcement programs at the registered page 66494 futures associations1and 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.2The 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

Footnotes:

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.

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): 161 percent for FY 2012, 181 percent for FY 2013, and 180 percent for FY 2014.

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:

Actual total costs FY 2012 FY 2013 FY 2014 3-Year average actual costs 3-Year percent of volume Volume adjusted costs 2015 Assessed fee
CBOE Futures $29,278 $235,567 $- $88,282 0.98 $50,853 $50,853
Chicago Board of Trade 238,392 164,974 55,515 152,960 30.02 281,079 152,960
Chicago Mercantile Exchange 757,347 391,917 225,701 458,322 44.93 535,344 458,322
ELX Futures 34,593 134,267 56,287 0.026 28,320 28,320
ICE Futures U.S. 221,813 360,223 81,176 221,071 8.56 168,880 168,880
Kansas City Board of Trade 34,335 559 11,631 0.12 6,615 6,615
Minneapolis Grain Exchange 60,897 220,975 47,648 109,840 0.04 55,225 55,225
NADEX North American 11,293 101,252 980 37,842 0.033 19,147 19,147
New York Mercantile Exchange .. 7,411 135,316 225,672 122,800 14.69 161,480 122,800
NYSE LIFFE US 71,317 24,802 32,039 0.34 18,354 18,354
One Chicago 55,755 128,599 31,196 71,850 0.241 37,568 37,568
Subtotal 1,522,431 1,898,451 667,888 1,362,924 100 1,362,865 1,119,044
National Futures Association 487,328 186,499 292,102 321,976 321,976
Total 2,009,759 2,084,950 959,990 1,684,900 1,441,020

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 $152,960.

b. The alternative computation is: (.5) ($152,960) + (.5) (.30) ($1,347,041) = $278,695.

c. The fee is the lesser of a or b; in this case $152,960.


[top] 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 2012 through 2014 was $321,976. The fee to be paid by the NFA for the current fiscal year is $321,976. page 66495

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:

3-Year average actual cost 3-Year percent of volume 2015 Fee lesser of actual or calculated fee
CBOE Futures $88,282 0.98 $50,853
Chicago Board of Trade 152,960 30.02 152,960
Chicago Mercantile Exchange 458,322 44.93 458,322
ELX Futures 56,287 0.03 28,320
ICE Futures U.S. 221,071 8.56 168,880
Kansas City Board of Trade 11,631 0.12 6,615
Minneapolis Grain Exchange 109,840 0.04 55,225
NADEX North American 37,842 0.03 19,147
New York Mercantile Exchange 122,800 14.69 122,800
NYSE LIFFE US 32,039 0.34 18,354
One Chicago 71,850 0.2412 37,568
Subtotal 1,362,924 100 1,119,044
National Futures Association 321,976 321,976
Total 1,684,900 1,441,020

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 jfleming@cftc.gov, or see the CFTC Web site at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.

(Authority: 7 U.S.C. 16a)

Issued in Washington, DC, on October 23, 2015, by the Commission.

Christopher J. Kirkpatrick,

Secretary of the Commission.

[FR Doc. 2015-27535 Filed 10-28-15; 8:45 am]

BILLING CODE 6351-01-P