2012-30224

Federal Register, Volume 77 Issue 241 (Friday, December 14, 2012)[Federal Register Volume 77, Number 241 (Friday, December 14, 2012)]

[Rules and Regulations]

[Pages 74351-74353]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2012-30224]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1

Fees for Reviews of the Rule Enforcement Programs of Designated

Contract Markets and Registered Futures Associations

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of FY 2012 schedule of fees.

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[[Page 74352]]

SUMMARY: The 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 FY 2012 by this notice is based upon an average of actual program

costs incurred during FY 2009, 2010, and 2011.

DATES: Effective Date: Each SRO is required to remit electronically the

fee applicable to it on or before February 12, 2013.

FOR FURTHER INFORMATION CONTACT: Mark Carney, Chief Financial Officer,

Commodity Futures Trading Commission, (202) 418-5477, Three Lafayette

Centre, 1155 21st Street NW., Washington, DC 20581. For information on

electronic payment, contact Jennifer Fleming, Three Lafayette Centre,

1155 21st Street NW., Washington, DC 20581, (202) 418-5034.

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\ All costs are accounted for by the

Commission's Budget Program Activity Codes (BPAC) system, formerly the

Management Accounting Structure Codes (MASC) system, which records each

employee's time for each pay period. 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, then charges the lower of the two.\3\

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\1\ NFA 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 consist generally 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): 147 percent for fiscal

year 2009, 153 percent for fiscal year 2010, and 145 percent for fiscal

year 2011.

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:

[[Page 74353]]

[GRAPHIC] [TIFF OMITTED] TR14DE12.000

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 $78,553.

b. The alternative computation is: (.5) ($78,553) + (.5) (.274)

($1,340,083) = $222,868.

c. The fee is the lesser of a or b; in this case $78,553.

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 2009 through 2011 was $577,549 (one-third of $1,732,647). The fee

to be paid by the NFA for the current fiscal year is $577,549.

II. Schedule of Fees

Therefore, 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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2012 fee lesser of

actual or

calculated fee

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CBOE Futures........................................ $17,611

Chicago Board of Trade.............................. 78,553

Chicago Climate Exchange............................ 497

Chicago Mercantile Exchange......................... 548,855

ICE Futures U.S..................................... 88,143

Kansas City Board of Trade.......................... 44,642

Minneapolis Grain Exchange.......................... 35,730

New York Mercantile Exchange........................ 227,640

New York LIFFE...................................... 71,111

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Subtotal........................................ 1,112,781

National Futures Association........................ 577,549

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Total....................................... 1,690,330

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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 jfleming@cftc.gov, or see the

CFTC Web site at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.

Issued in Washington, DC on this 11th day of December 2012, by

the Commission.

Sauntia S. Warfield,

Assistant Secretary of the Commission.

[FR Doc. 2012-30224 Filed 12-13-12; 8:45 am]

BILLING CODE P

Last Updated: December 14, 2012