[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