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

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Commodity Futures Trading Commission.


Notice of 2014 Schedule of Fees.


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.


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

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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.

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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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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 costs3-year average actual costs3-year % of volumeVolume adjusted costsFY 2014 assessed fee
FY 2011FY 2012FY 2013
CBOE Futures$98,556$29,278$235,567$121,1340.66$65,672$65,672
Chicago Board of Trade5,260238,392164,974136,20929.85298,837136,209
Chicago Mercantile Exchange422,837757,347391,917524,03446.88624,386524,034
ELX Futures34,593134,26756,2870.21229,78229,782
ICE Futures U.S.17,624221,813360,223199,8866.08146,957146,957
Kansas City Board of Trade30,97634,33555921,9570.1712,33112,331
Minneapolis Grain Exchange88,79060,897220,975123,5540.0462,12262,122
NADEX North American11,293101,25237,5150.00018,75818,758
New York Mercantile Exchange136,5657,411135,31693,09815.41165,63893,098
NYSE LIFFE US416,06971,31724,802170,7290.5089,23289,232
One Chicago55,755128,59961,4520.17632,08532,085
National Futures Association416,615487,328186,499363,480363,480

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:Start Printed Page 62420

3-year average actual cost2014 fee lesser of actual or calculated fee
CBOE Futures$ 121,134$ 65,672
Chicago Board of Trade136,209136,209
Chicago Mercantile Exchange524,034524,034
ELX Futures56,28729,782
ICE Futures U.S.199,886146,957
Kansas City Board of Trade21,95712,331
Minneapolis Grain Exchange123,55462,122
NADEX North American37,51518,758
New York Mercantile Exchange93,09893,098
NYSE LIFFE US170,72989,232
One Chicago61,45232,085
National Futures Association363,480363,480

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, or see the CFTC Web site at, specifically,​cftc/​cftcelectronicpayments.htm.

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

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Issued in Washington, DC, on October 10, 2014, by the Commission.

Christopher J. Kirkpatrick,

Secretary of the Commission.

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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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[FR Doc. 2014-24624 Filed 10-16-14; 8:45 am]