[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, 
<a href="/cdn-cgi/l/email-protection#6c06010d181805020b0009152c0f0a180f420b031a"><span class="__cf_email__" data-cfemail="b1dbdcd0c5c5d8dfd6ddd4c8f1d2d7c5d29fd6dec7">[email protected]</span></a>. For information on electronic payments, contact 
<a href="/cdn-cgi/l/email-protection#98f9fbfbf7edf6ecf1f6ffd8fbfeecfbb6fff7ee"><span class="__cf_email__" data-cfemail="4b2a2828243e253f22252c0b282d3f28652c243d">[email protected]</span></a>.

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:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Actual total costs
                                         ------------------------------------------------ 3-Year average   3-Year total      Adjusted      2022 Assessed
                                              FY 2019         FY 2020         FY 2021      actual costs      volume %      volume costs         fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
                                         ---------------------------------------------------------------------------------------------------------------
    Subtotal............................         744,973         658,001         924,078         775,684          100.00         775,684         649,656
                                         ---------------------------------------------------------------------------------------------------------------
National Futures Association............         540,821         567,719         723,031         610,524  ..............  ..............         610,524
                                         ---------------------------------------------------------------------------------------------------------------
    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:

----------------------------------------------------------------------------------------------------------------
                                                  3-Year average   3-Year total      Adjusted      2022 Assessed
                                                   actual costs      volume %      volume costs         fee
----------------------------------------------------------------------------------------------------------------
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
                                                 ---------------------------------------------------------------
    Subtotal....................................         775,684          100.00         775,684         649,656
                                                 ---------------------------------------------------------------
National Futures Association....................         610,524  ..............  ..............         610,524
                                                 ---------------------------------------------------------------
    Total.......................................       1,386,208          100.00         775,684       1,260,180
----------------------------------------------------------------------------------------------------------------
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


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