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Fees for Reviews of the Rule Enforcement Programs of Designated Contract Markets and Registered Futures Associations


Notice Of Fy 2011 Schedule Of Fees.


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.


Table of Contents Back to Top

DATES: Back to Top

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


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.


I. Background Information Back to Top

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]

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:

Actual total costs 3-Year average actual costs 3-Year % of volume Volume adjusted costs FY2011 Assessed fee
FY2008 FY2009 FY2010
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

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 Back to Top

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:

2011 Fee lesser of actual or calculated fee
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

III. Payment Method Back to Top

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, or see the CFTC Web site at, specifically,

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]


Footnotes Back to Top

1. NFA is the only registered futures association.

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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.

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3. 58 FR 42643, Aug. 11, 1993 and 17 CFR part 1, app. B.

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