2023-23821
[Federal Register Volume 88, Number 208 (Monday, October 30, 2023)]
[Rules and Regulations]
[Pages 74025-74027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23821]
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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: Notification of 2022 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 the
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 2022 by this document is based upon an average of
actual program costs incurred during fiscal year (``FY'') 2019, FY
2020, and FY 2021.
DATES: Each self-regulatory organization is required to electronically
remit the
[[Page 74026]]
applicable fee on or before December 29, 2023.
FOR FURTHER INFORMATION CONTACT: Joel Mattingley, Chief Financial
Officer, Commodity Futures Trading Commission; (202) 418-5310,
[email protected]. For information on electronic payments, contact
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background Information
A. General
This document 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 annually
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\ The 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.
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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): 174 percent for FY 2019,
158 percent for FY 2020, and 173 percent for FY 2021.
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.
Since NFA has no contracts traded, 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:
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Actual total costs
------------------------------------------------ 3-Year average 3-Year total Adjusted 2022 Assessed
FY 2019 FY 2020 FY 2021 actual costs volume % volume costs fee
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CX Futures Exchange, L.P................ $0 $22,702 $0 $7,567 0.030 $3,901 $3,901
CBOE Futures Exchange, LLC.............. 40,517 23,325 13,418 25,753 1.119 17,217 17,217
Chicago Board of Trade.................. 22,835 56,041 47,253 42,043 33.578 151,253 42,043
Chicago Mercantile Exchange, Inc........ 383,995 260,723 433,468 359,395 43.862 349,812 349,812
Eris Exchange, LLC...................... 0 0 0 0 0.001 3 0
ICE Futures U.S., LLC................... 73,464 193,300 166,180 144,315 6.577 97,666 97,666
Intercontinental Exchange, Inc.......... 0 0 0 0 0.000 0 0
Minneapolis Grain Exchange, LLC......... 39,525 0 28,780 22,768 0.053 11,590 11,590
Nasdaq OMX Futures Exchange, Inc........ 1,741 0 0 580 0.099 675 580
Nodal Exchange, LLC..................... 2,312 0 0 771 0.099 770 770
North American Derivatives Exchange, Inc 135,159 2,598 15,849 51,202 0.204 26,392 26,392
OneChicago, LLC Futures Exchange........ 0 0 0 0 0.077 298 0
[[Page 74027]]
New York Mercantile Exchange/Commodity 45,425 99,311 88,701 77,812 14.238 94,126 77,812
Exchange, Inc..........................
LedgerX \1\............................. 0 0 130,428 43,476 0.035 21,872 21,872
Kalshiex, LLC........................... 0 0 0 0 0.024 94 0
Coinbase................................ 0 0 0 0 0.001 3 0
Small Exchange, LLC..................... 0 0 0 0 0.003 12 0
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Subtotal............................ 744,973 658,001 924,078 775,684 100.00 775,684 649,656
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National Futures Association............ 540,821 567,719 723,031 610,524 .............. .............. 610,524
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Total............................... 1,285,794 1,225,720 1,647,109 1,386,208 100.00 775,684 1,260,180
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Columns may not add due to rounding.
\1\ LedgerX formerly known as FTX US Derivatives.
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 = $42,043
b. The alternative computation is: [(.5) ($42,043)] + (.5) [(.3357849)
($775,684)] = $151,253
c. The fee is the lesser of a or b; in this case $42,043
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 reviews of the NFA rule enforcement program during fiscal
years 2019 through 2021 was $610,524. The fee to be paid by the NFA for
the current fiscal year is $610,524.
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:
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3-Year average 3-Year total Adjusted 2022 Assessed
actual costs volume % volume costs fee
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CX Futures Exchange, L.P........................ $7,567 0.030 $3,901 $3,901
CBOE Futures Exchange, LLC...................... 25,753 1.119 17,217 17,217
Chicago Board of Trade.......................... 42,043 33.578 151,253 42,043
Chicago Mercantile Exchange, Inc................ 359,395 43.862 349,812 349,812
Eris Exchange, LLC.............................. 0 0.001 3 0
ICE Futures U.S., LLC........................... 144,315 6.577 97,666 97,666
Intercontinental Exchange, Inc.................. 0 0.000 0 0
Minneapolis Grain Exchange, LLC................. 22,768 0.053 11,590 11,590
Nasdaq OMX Futures Exchange, Inc................ 580 0.099 675 580
Nodal Exchange, LLC............................. 771 0.099 770 770
North American Derivatives Exchange, Inc........ 51,202 0.204 26,392 26,392
OneChicago, LLC Futures Exchange................ 0 0.077 298 0
New York Mercantile Exchange/Commodity Exchange, 77,812 14.238 94,126 77,812
Inc............................................
LedgerX \1\..................................... 43,476 0.035 21,872 21,872
Kalshiex, LLC................................... 0 0.024 94 0
Coinbase........................................ 0 0.001 3 0
Small Exchange, LLC............................. 0 0.003 12 0
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Subtotal.................................... 775,684 100.00 775,684 649,656
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National Futures Association.................... 610,524 .............. .............. 610,524
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Total....................................... 1,386,208 100.00 775,684 1,260,180
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Columns may not add due to rounding.
\1\ LedgerX formerly known as FTX US Derivatives.
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. All payments should be made via the government payment
website https://www.pay.gov/public/form/start/105542374/. Credit card
payments are only acceptable for amounts less than or equal to $24,999.
All payments equal to or above $25,000 must be made by electronic funds
transfer.
Fees collected from each SRO 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 24th day of October, 2023, by
the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2023-23821 Filed 10-27-23; 8:45 am]
BILLING CODE 6351-01-P