2018-27042
Federal Register, Volume 83 Issue 239 (Thursday, December 13, 2018)
[Federal Register Volume 83, Number 239 (Thursday, December 13, 2018)]
[Notices]
[Pages 64116-64118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27042]
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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 2018 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 2018 by this notice is based upon an average of
actual program costs incurred during fiscal year (FY) 2015, FY 2016,
and FY 2017.
DATES: Each self-regulatory organization is required to remit
electronically the applicable fee on or before February 11, 2019.
FOR FURTHER INFORMATION CONTACT: Anthony C. Thompson, Executive
Director, 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, 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): 211 percent for FY 2015,
and 190 percent for FY 2016, and 175 precent for FY 2017.
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
[[Page 64117]]
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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3-Year average 3-Year average Adjusted 2017 Actual 2018 Assessed
Actual total costs FY 2015 FY 2016 FY 2017 actual costs volume (%) volume costs fee fee
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CBOE Futures.................................................... $158,209 $227,059 $31,765 $139,011 1.44 $79,398 $71,004 $79,398
Chicago Board of Trade.......................................... 17,938 28,720 98,737 48,465 30.14 231,283 34,058 48,465
Chicago Mercantile Exchange..................................... 540,151 372,278 483,391 465,273 44.34 537,235 379,377 465,273
ICE Futures U.S................................................. 105,864 386,719 203,826 232,136 8.68 175,696 143,431 175,696
Minneapolis Grain Exchange...................................... 147,983 14,314 43,230 68,509 0.06 34,667 35,250 34,667
NADEX North American............................................ .............. 81,758 86,680 56,146 0.18 29,309 14,516 29,309
New York Mercantile Exchange.................................... 118,701 242,792 217,861 193,118 14.25 194,451 172,990 193,118
OneChicago, LLC................................................. 289 282 37,311 12,627 0.31 8,443 6,798 8,443
NASDAQ.......................................................... .............. .............. 257,177 85,726 0.58 46,847 .............. 46,847
ERIS Exchange................................................... .............. .............. 54,272 18,091 0.01 9,136 .............. 9,136
CANTOR.......................................................... .............. .............. 61,474 20,491 .............. 10,246 .............. 10,246
NODAL........................................................... .............. .............. 102,993 34,331 .............. 17,166 .............. 17,166
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Subtotal.................................................... 1,089,134 1,353,921 1,678,716 1,373,924 100 1,373,877 857,423 1,117,763
National Futures Association.................................... 401,337 282,405 676,430 453,390 .............. .............. 325,281 453,390
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Total................................................... 1,490,471 1,636,326 2,355,145 1,827,314 .............. .............. $1,182,704 1,571,154
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Note to Table 1: The 2018 Fee is the Lessor of the 3-year Average Actual cost or the Adjusted Volume Cost
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 = $48,465.
b. The alternative computation is: (.5) ($48,465) + (.5) (.3014)
($1,373,924) = $231,283.
c. The fee is the lesser of a or b; in this case $48,465.
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 2015 through 2017 was $453,390. The fee to be paid by the NFA for
the current fiscal year is $453,390.
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 average Adjusted 2018 Assessed
actual costs volume % volume costs fee
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CBOE Futures.................................... $139,011 1.44 $79,398 $79,398
Chicago Board of Trade.......................... 48,465 30.14 231,283 48,465
Chicago Mercantile Exchange..................... 465,273 44.34 537,235 465,273
ICE Futures U.S................................. 232,136 8.68 175,696 175,696
Minneapolis Grain Exchange...................... 68,509 0.06 34,667 34,667
NADEX North American............................ 56,146 0.18 29,309 29,309
New York Mercantile Exchange.................... 193,118 14.25 194,451 193,118
OneChicago, LLC................................. 12,627 0.31 8,443 8,443
NASDAQ.......................................... 85,726 0.58 46,847 46,847
ERIS Exchange................................... 18,091 0.01 9,136 9,136
CANTOR.......................................... 20,491 .............. 10,246 10,246
NODAL........................................... 34,331 .............. 17,166 17,166
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Subtotal.................................... 1,373,924 100 1,373,877 1,117,763
National Futures Association.................... 453,390 .............. .............. 453,390
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Total................................... 1,827,314 .............. .............. 1,571,154
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[[Page 64118]]
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 http://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 December 10, 2018, by the
Commission.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2018-27042 Filed 12-12-18; 8:45 am]
BILLING CODE 6351-01-P