[Federal Register Volume 79, Number 201 (Friday, October 17, 2014)]
[Notices]
[Pages 62418-62420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24624]


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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 2014 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 
(SRO) 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 2014 
by this notice is based upon an average of actual program costs 
incurred during fiscal year (FY) 2011, FY 2012, and FY 2013.

DATES: Effective date: Each SRO is required to remit electronically the 
applicable fee on or before December 16, 2014.

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:

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 an 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\ 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 62419]]

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): 145 Percent for FY 2011, 
161 percent for FY 2012, and 181 percent for FY 2013.

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:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Actual total costs                    3-year
                                         ------------------------------------------------     average       3-year % of       Volume          FY 2014
                                              FY 2011         FY 2012         FY 2013      actual costs       volume      adjusted costs   assessed fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBOE Futures............................         $98,556         $29,278        $235,567        $121,134            0.66         $65,672         $65,672
Chicago Board of Trade..................           5,260         238,392         164,974         136,209           29.85         298,837         136,209
Chicago Mercantile Exchange.............         422,837         757,347         391,917         524,034           46.88         624,386         524,034
ELX Futures.............................  ..............          34,593         134,267          56,287           0.212          29,782          29,782
ICE Futures U.S.........................          17,624         221,813         360,223         199,886            6.08         146,957         146,957
Kansas City Board of Trade..............          30,976          34,335             559          21,957            0.17          12,331          12,331
Minneapolis Grain Exchange..............          88,790          60,897         220,975         123,554            0.04          62,122          62,122
NADEX North American....................  ..............          11,293         101,252          37,515           0.000          18,758          18,758
New York Mercantile Exchange............         136,565           7,411         135,316          93,098           15.41         165,638          93,098
NYSE LIFFE US...........................         416,069          71,317          24,802         170,729            0.50          89,232          89,232
One Chicago.............................  ..............          55,755         128,599          61,452           0.176          32,085          32,085
                                         ---------------------------------------------------------------------------------------------------------------
    Subtotal............................       1,216,678       1,522,431       1,898,452       1,545,854             100       1,545,799       1,210,279
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National Futures Association............         416,615         487,328         186,499         363,480  ..............  ..............         363,480
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................       1,633,293       2,009,759       2,084,950       1,909,334  ..............  ..............       1,573,760
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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 $136,209.
    b. The alternative computation is: (.5) ($136,209) + (.5) (.298) 
($1,545,854) = $298,837.
    c. The fee is the lesser of a or b; in this case $136,209.
    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 2011 through 2013 was $363,480 (one-third of $1,090,441). The fee 
to be paid by the NFA for the current fiscal year is $363,480.

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:

[[Page 62420]]



------------------------------------------------------------------------
                                                         2014 fee lesser
                                       3-year  average    of actual or
                                         actual cost     calculated fee
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CBOE Futures........................         $ 121,134          $ 65,672
Chicago Board of Trade..............           136,209           136,209
Chicago Mercantile Exchange.........           524,034           524,034
ELX Futures.........................            56,287            29,782
ICE Futures U.S.....................           199,886           146,957
Kansas City Board of Trade..........            21,957            12,331
Minneapolis Grain Exchange..........           123,554            62,122
NADEX North American................            37,515            18,758
New York Mercantile Exchange........            93,098            93,098
NYSE LIFFE US.......................           170,729            89,232
One Chicago.........................            61,452            32,085
                                     -----------------------------------
    Subtotal........................         1,545,854         1,210,279
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National Futures Association........           363,480           363,480
                                     -----------------------------------
    Total...........................         1,909,334         1,573,760
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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 <a href="/cdn-cgi/l/email-protection#e78d818b828a8e8980a784819384c9808891"><span class="__cf_email__" data-cfemail="8be1ede7eee6e2e5eccbe8edffe8a5ece4fd">[email protected]</span></a>, or see the 
CFTC Web site at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.

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

    Issued in Washington, DC, on October 10, 2014, by the 
Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
[FR Doc. 2014-24624 Filed 10-16-14; 8:45 am]
BILLING CODE 6351-01-P


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