[Federal Register Volume 82, Number 77 (Monday, April 24, 2017)]
[Notices]
[Pages 18898-18900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08222]


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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 2016 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. The calculation of 
the fee amounts charged for 2016 by this notice is based upon an 
average of actual program costs incurred during fiscal year (``FY'') 
2013, FY 2014, and FY 2015.

DATES: Effective: Each self-regulatory organization is required to 
remit electronically the applicable fee on or before June 23, 2017.

FOR FURTHER INFORMATION CONTACT: Mary Jean Buhler, Chief Financial 
Officer, Commodity Futures Trading Commission; (202) 418-5089; 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:

[[Page 18899]]

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, 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): 181 percent for FY 2013, 
and 180 percent for FY 2014, and 211 percent for FY 2015.

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 percent      Volume       2016 Assessed
                                                        FY 2013     FY 2014     FY 2015    actual costs      of volume    adjusted costs        fee
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CBOE Futures........................................    $235,567  ..........    $158,209        $131,259            1.22         $73,074         $73,074
Chicago Board of Trade..............................     164,974     $55,515      17,938          79,476           30.08         223,017          79,476
Chicago Mercantile Exchange.........................     391,917     225,701     540,151         385,923           44.03         461,189         385,923
ELX Futures.........................................     134,267  ..........  ..........          44,756            0.00          22,378          22,378
ICE Futures U.S.....................................     360,223      81,176     105,864         182,421           10.21         153,429         153,429
Kansas City Board of Trade..........................         559  ..........  ..........             186            0.06             467             186
Minneapolis Grain Exchange..........................     220,975      47,648     147,983         138,868            0.05          69,741          69,741
NADEX North American................................     101,252         980  ..........          34,077            0.08          17,505          17,505
New York Mercantile Exchange........................     135,316     225,672     118,701         159,897           13.84         164,294         159,897
NYSE LIFFE US.......................................      24,802  ..........  ..........           8,267            0.13           4,909           4,909
One Chicago.........................................     128,599      31,196         289          53,362            0.28          28,384          28,384
                                                     ---------------------------------------------------------------------------------------------------
    Subtotal........................................   1,898,452     667,888   1,089,134       1,218,491             100       1,218,387         994,902
National Futures Association........................     186,499     292,102     401,337         293,312  ..............  ..............         293,312
                                                     ---------------------------------------------------------------------------------------------------
    Total...........................................   2,084,950     959,990   1,490,471       1,511,804  ..............  ..............       1,288,214
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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 $79,476.
    b. The alternative computation is: (.5) ($79,476) + (.5) (.30) 
($1,218,491) = $223,017.
    c. The fee is the lesser of a or b; in this case $79,476.
    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

[[Page 18900]]

rule enforcement program during fiscal years 2013 through 2015 was 
$293,312. The fee to be paid by the NFA for the current fiscal year is 
$293,312.

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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                                                                                                 2016 Fee lesser
                                                               3-Year average   3-Year percent    of actual or
                                                                 actual cost       of volume     calculated fee
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CBOE Futures................................................          $131,259            1.22           $73,074
Chicago Board of Trade......................................            79,476           30.08            79,476
Chicago Mercantile Exchange.................................           385,923           44.03           385,923
ELX Futures.................................................            44,756            0.00            22,378
ICE Futures U.S.............................................           182,421           10.21           153,429
Kansas City Board of Trade..................................               186            0.06               186
Minneapolis Grain Exchange..................................           138,868            0.05            69,741
NADEX North American........................................            34,077            0.08            17,505
New York Mercantile Exchange................................           159,897           13.84           159,897
NYSE LIFFE US...............................................             8,267            0.13             4,909
One Chicago.................................................            53,362          0.2795            28,384
                                                             ---------------------------------------------------
    Subtotal................................................         1,218,491             100           994,902
National Futures Association................................           293,312  ..............           293,312
                                                             ---------------------------------------------------
    Total...................................................         1,511,804  ..............         1,288,214
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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 http://www.cftc.gov, specifically, http://www.cftc.gov/cftc/cftcelectronicpayments.htm.

(Authority: 7 U.S.C. 16a)

    Issued in Washington, DC, on April 19, 2017, by the Commission.
Robert N. Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2017-08222 Filed 4-21-17; 8:45 am]
 BILLING CODE 6351-01-P