2019-19438
Federal Register, Volume 84 Issue 174 (Monday, September 9, 2019)
[Federal Register Volume 84, Number 174 (Monday, September 9, 2019)]
[Notices]
[Pages 47262-47264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19438]
-----------------------------------------------------------------------
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 2019 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 (``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 2019 by this notice is based upon an average of
actual program costs incurred during fiscal year (``FY'') 2016, FY
2017, and FY 2018.
DATES: Each self-regulatory organization is required to remit
electronically the applicable fee on or before November 8, 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\
---------------------------------------------------------------------------
\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): 190 percent for FY 2016,
and 175 percent for FY 2017, and 182 precent for FY 2018.
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
[[Page 47263]]
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:
Table 1--Summary of Data Used in Fee Calculations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual total costs Refund of
--------------------------------------- 3-Year 3-Year Adjusted 2019 over 2019
average average volume Assessed payment Assessed
FY 2016 FY 2017 FY 2018 actual volume (%) costs fee from FY fee
costs 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
CANTOR............................. $ $60,045 $56,551 $38,865.55 0.00 $19,433 $19,433 $(238) $19,195
CBOE Futures Ex.................... 227,059 31,026 16,033 91,372.64 1.44 54,354 54,354 (217) 54,137
CBOT............................... 28,720 96,442 2,296 42,486.01 30.55 204,602 42,486 (765) 41,721
CME................................ 372,278 472,157 235,127 359,854.31 42.65 435,963 359,854 (3,744) 356,110
ERIS............................... ........... 53,010 33,170 28,726.90 0.01 14,423 14,423 (211) 14,212
ICE Futures US..................... 386,719 199,090 50,096 211,968.03 7.70 152,203 152,203 (1,354) 150,849
MGE................................ 14,314 42,226 438 18,992.66 0.05 9,816 9,816 (171) 9,645
NASDAQ OMX-PBOT.................... ........... 251,200 109,413 120,204.37 0.73 64,470 64,470 (1,034) 63,436
NODAL.............................. ........... 100,600 33,162 44,587.32 0.02 22,396 22,396 (399) 21,997
NYMEX/COMEX........................ 242,792 212,798 3,397 152,995.57 16.37 174,773 152,996 (1,688) 151,308
North American Derivatives Exchange 81,758 84,666 6,986 57,803.18 0.217 30,206 30,206 (347) 29,859
Inc...............................
OCX-One Chicago, LLC............... 282 36,444 61,276 32,667.15 0.256 17,868 17,868 (165) 17,703
--------------------------------------------------------------------------------------------------------------------
Subtotal....................... 1,353,922 1,639,704 607,946 1,200,524 ........... 1,200,504 940,503 (10,333) 930,170
National Futures Association....... 282,405 660,710 507,673 483,595.99 ........... ........... 483,596 (5,240) 478,356
--------------------------------------------------------------------------------------------------------------------
Total...................... 1,636,327 2,300,414 1,115,619 1,684,120 ........... ........... 1,424,099 (15,573) 1,408,526
--------------------------------------------------------------------------------------------------------------------------------------------------------
The FY 2019 fees reflect refunds of overpayments that resulted from
an error regarding the amount of overhead calculated in the FY 2018
fees. As a result, the overhead factor was reduced 0.06 percent, the FY
2018 fees were recalculated, and credits in the amount of the
overpayments were applied to the FY 2019 fees.
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 = $42,486.
b. The alternative computation is: (.5) ($42,486) + (.5) (.305465)
($1,200,524) = $204,602.
c. The fee is the lesser of a. or b.; in this case $42,486.
d. The refund for overpayment of $765.00 is applied, bringing the
fee to $41,721.
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 2016 through 2018 was $483,596. The fee to be paid by the NFA for
the current fiscal year is $483,596.
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Refund of over
3-Year average 3-Year average Adjusted 2019 Assessed payment from 2019 Assessed
actual costs volume (%) volume costs fee FY 2018 fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
CANTOR.................................................. $38,865.55 0.00 $19,433 $19,433 $(238) $19,195
CBOE Futures Ex......................................... 91,372.64 1.44 54,354 54,354 (217) 54,137
CBOT.................................................... 42,486.01 30.55 204,602 42,486 (765) 41,721
CME..................................................... 359,854.31 42.65 435,963 359,854 (3,744) 356,110
ERIS.................................................... 28,726.90 0.01 14,423 14,423 (211) 14,212
ICE Futures US.......................................... 211,968.03 7.70 152,203 152,203 (1,354) 150,849
MGE..................................................... 18,992.66 0.05 9,816 9,816 (171) 9,645
NASDAQ OMX-PBOT......................................... 120,204.37 0.73 64,470 64,470 (1,034) 63,436
NODAL................................................... 44,587.32 0.02 22,396 22,396 (399) 21,997
NYMEX/COMEX............................................. 152,995.57 16.37 174,773 152,996 (1,688) 151,308
North American Derivatives Exchange Inc................. 57,803.18 0.217 30,206 30,206 (347) 29,859
[[Page 47264]]
OCX-One Chicago, LLC.................................... 32,667.15 0.256 17,868 17,868 (165) 17,703
-----------------------------------------------------------------------------------------------
Subtotal............................................ 1,200,524 .............. 1,200,504 .............. (10,333) 930,170
National Futures Association............................ 483,595.99 .............. .............. 483,596 (5,240) 478,356
-----------------------------------------------------------------------------------------------
Total........................................... 1,684,120 .............. .............. 1,424,099 (15,573) 1,408,526
--------------------------------------------------------------------------------------------------------------------------------------------------------
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, http://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 this 4th day of September, 2019, by
the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2019-19438 Filed 9-6-19; 8:45 am]
BILLING CODE 6351-01-P