[Federal Register Volume 77, Number 88 (Monday, May 7, 2012)]
[Rules and Regulations]
[Pages 26672-26674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-10898]


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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 2011 schedule of fees.

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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 2011 by this notice is based upon an average of actual program 
costs incurred during FY 2008, 2009, and 2010.

DATES: Effective Date: Each SRO is required to remit electronically the 
fee applicable to it on or before July 6, 2012.

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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[[Page 26673]]

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): 144 percent for fiscal 
year 2008, 147 percent for fiscal year 2009, and 153 percent for fiscal 
year 2010.

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:

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                                                                         Actual total costs              3-Year
                                                              ---------------------------------------   average    3-Year % of     Volume       FY2011
                                                                                                         actual       volume      adjusted     Assessed
                                                                  FY2008       FY2009       FY2010       costs                     costs         fee
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CBOE Futures.................................................  ...........         $519  ...........         $173        0.057         $448         $173
Chicago Board of Trade.......................................      $30,305      142,446      $87,953       86,901       27,706      218,442       86,901
Chicago Climate Exchange.....................................       23,590        2,129  ...........        8,573        0.025        4,444        4,444
Chicago Mercantile Exchange..................................       13,511      341,186      882,542      412,413       54.224      548,690      412,413
ICE Future U.S...............................................      126,362      286,289       94,043      168,898        2.883      102,659      102,659
Kansas City Board of Trade...................................       78,321        2,888      227,296      102,835        0.139       52,294       52,294
Minneapolis Grain Exchange...................................      187,679      123,566  ...........      103,748        0.047       52,172       52,172
New York Mercantile Exchange.................................      497,654       15,948      596,767      370,123       14.214      274,838      274,838
North American Derivative Exchanges..........................       25,175  ...........  ...........        8,392        0.000        4,196        4,196
One Chicago..................................................        3,471  ...........  ...........        1,157        0.134        1,425        1,157
                                                              ------------------------------------------------------------------------------------------
    Subtotal.................................................      986,069      914,972    1,888,601    1,263,214          100    1,259,607      991,247
                                                              ------------------------------------------------------------------------------------------
National Futures Association.................................    1,054,392      109,639    1,206,393      790,141  ...........  ...........      790,141
                                                              ------------------------------------------------------------------------------------------
    Total....................................................    2,040,460    1,024,611    3,094,994    2,053,355  ...........  ...........    1,781,388
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    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 $86,901.
    b. The alternative computation is: (.5) ($86,901) + (.5) (.2771) 
($1,263,214) = $218,442.
    c. The fee is the lesser of a or b; in this case $86,901.

    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 2008 through 2010 was $790,141 (one-third of $2,370,423). The fee 
to be paid by the NFA for the current fiscal year is $790,141.

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:

[[Page 26674]]



------------------------------------------------------------------------
                                                               2011 Fee
                                                              lesser of
                                                              actual or
                                                              calculated
                                                                 fee
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CBOE Futures...............................................         $173
Chicago Board of Trade.....................................       86,901
Chicago Climate Exchange...................................        4,444
Chicago Mercantile Exchange................................      412,413
ICE Futures U.S............................................      102,659
Kansas City Board of Trade.................................       52,294
Minneapolis Grain Exchange.................................       52,172
New York Mercantile Exchange...............................      274,838
North American Derivatives Exchange........................        4,196
OneChicago.................................................        1,157
                                                            ------------
    Subtotal...............................................      991,247
                                                            ------------
National Futures Association...............................      790,141
                                                            ------------
    Total..................................................    1,781,388
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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 [email protected], or see the 
CFTC Web site at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.

    Issued in Washington, DC, on this 1st day of May, 2012, by the 
Commission.
David Stawick,
Secretary of the Commission.
[FR Doc. 2012-10898 Filed 5-4-12; 8:45 am]
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