[Federal Register Volume 77, Number 241 (Friday, December 14, 2012)]
[Rules and Regulations]
[Pages 74351-74353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30224]
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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: Notice of FY 2012 schedule of fees.
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[[Page 74352]]
SUMMARY: 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 2012 by this notice is based upon an average of actual program
costs incurred during FY 2009, 2010, and 2011.
DATES: Effective Date: Each SRO is required to remit electronically the
fee applicable to it on or before February 12, 2013.
FOR FURTHER INFORMATION CONTACT: 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.
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\ 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\
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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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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): 147 percent for fiscal
year 2009, 153 percent for fiscal year 2010, and 145 percent for fiscal
year 2011.
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:
[[Page 74353]]
[GRAPHIC] [TIFF OMITTED] TR14DE12.000
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 $78,553.
b. The alternative computation is: (.5) ($78,553) + (.5) (.274)
($1,340,083) = $222,868.
c. The fee is the lesser of a or b; in this case $78,553.
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 2009 through 2011 was $577,549 (one-third of $1,732,647). The fee
to be paid by the NFA for the current fiscal year is $577,549.
II. Schedule of Fees
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:
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2012 fee lesser of
actual or
calculated fee
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CBOE Futures........................................ $17,611
Chicago Board of Trade.............................. 78,553
Chicago Climate Exchange............................ 497
Chicago Mercantile Exchange......................... 548,855
ICE Futures U.S..................................... 88,143
Kansas City Board of Trade.......................... 44,642
Minneapolis Grain Exchange.......................... 35,730
New York Mercantile Exchange........................ 227,640
New York LIFFE...................................... 71,111
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Subtotal........................................ 1,112,781
National Futures Association........................ 577,549
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Total....................................... 1,690,330
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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 [email protected], or see the
CFTC Web site at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.
Issued in Washington, DC on this 11th day of December 2012, by
the Commission.
Sauntia S. Warfield,
Assistant Secretary of the Commission.
[FR Doc. 2012-30224 Filed 12-13-12; 8:45 am]
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