[Federal Register Volume 59, Number 48 (Friday, March 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5651]
[[Page Unknown]]
[Federal Register: March 11, 1994]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Parts 1, 5, and 31
Fees for Applications for Contract Market Designation, Leverage
Commodity Registration and Registered Futures Association and Exchange
Rule Enforcement and Financial Reviews
AGENCY: Commodity Futures Trading Commission.
ACTION: Final schedule of fees.
-----------------------------------------------------------------------
SUMMARY: The Commission periodically adjusts fees charged for certain
program services to assure that they accurately reflect current
Commission costs. In this regard, the staff recently reviewed the
Commission's actual costs of processing applications for contract
market designation (17 CFR part 5, appendix B), audits of leverage
transaction merchants (17 CFR part 31, appendix B) and registered
futures association and exchange rule enforcement and financial reviews
(17 CFR part 1, appendix B). The following fee schedule for FY 1994
reflects the costs to the Commission of providing those services during
fiscal years 1991, 1992 and 1993. Accordingly, the fee for applications
for contract market designation for a futures contract will be
increased to $12,000 from $11,000, the fee for contract market
designation for an option contract will remain at $3,000, the fee for
contract markets which simultaneously submit designation applications
for a futures and an option on that futures contract will be raised to
a combined fee of $13,000 for both from $12,000 for both, the fee for
leverage commodity registration will be maintained at $4,500 and the
schedule of fees for registered futures association and exchange rule
enforcement and financial reviews is published. These adjustments
reflect the Commission's actual costs of providing these services
during FY 1991, FY 1992 and FY 1993.
EFFECTIVE DATES: Contract Market Designation and Leverage Commodity
Registration March 11, 1994. Registered Futures Association and
Exchange Rule Enforcement and Financial Reviews May 10, 1994.
FOR FURTHER INFORMATION CONTACT: Gerry Smith, Special Assistant to the
Executive Director, Office of the Executive Director, Commodity Futures
Trading Commission, 2033 K Street NW., Washington, DC 20581, telephone
number 202-254-6090.
SUPPLEMENTARY INFORMATION: The Commission periodically reviews the
actual costs of providing services for which fees are charged and
adjusts its fees accordingly. In connection with its most recent
review, the Commission has determined that fees for contract market
designations should be adjusted. Also, this release announces the FY
1994 schedule of fees for registered futures association and exchange
rule enforcement and financial reviews and maintains leverage commodity
registration fees.
Background Information
I. Computation of Fees
In accordance with Section 237 of the Futures Trading Act of 1982
(7 U.S.C. 16a) the Commission has established fees for certain
activities and functions performed by the Commission.1 In
calculating the actual cost of processing applications for contract
market designation, registering leverage commodities, and performing
registered futures association and exchange rule enforcement and
financial reviews, the Commission takes into account personnel costs,
benefits and administrative costs.
---------------------------------------------------------------------------
\1\For a broader discussion of the history of Commission fees,
see 52 FR 46070 (Dec. 4, 1987).
---------------------------------------------------------------------------
The Commission first determines personnel costs by extracting data
from the agency's Management Accounting Structured Code (MASC) system.
Employees of the Commission record the time spent on each project under
the MASC system. The Commission then adds an overhead factor for
benefits, including retirement, insurance and leave, based on a
government-wide standard established by the Office of Management and
Budget in Circular A-76. An overhead factor is also added for general
and administrative costs, such as space, equipment and utilities. These
general and administrative costs are derived by computing the
percentage of Commission appropriations spent on these non-personnel
items. The overhead calculations fluctuate slightly due to changes in
government-wide benefits and the percentage of Commission
appropriations applied to non-personnel costs from year to year. The
actual overhead factor for the preceding fiscal years is as follows: FY
1991--94%; FY 1992--99%; FY 1993--93%.
Once the total personnel costs and overhead for each project have
been determined, the costs for FY 1991, FY 1992 and FY 1993 are
averaged. This results in a calculation of the average annual cost for
each project over the three-year period.
II. Applications for Contract Market Designation
On August 23, 1983 the Commission established a fee for Contract
Market Designation. 48 FR 38214. This fee was based upon a three year
moving average of the actual costs expended and the number of contracts
reviewed in that period of time. The fee charged was reviewed again in
FY 1985 and every year thereafter to determine the fee for the current
year. In FY 1985 the overwhelming majority of designation applications
was for futures contracts as opposed to option contracts. Therefore,
the proposed fee covered both futures and option applications. In FY
1992 the Commission reviewed its data on the actual costs for reviewing
designation applications for both futures and option contracts and
determined that the cost of reviewing a futures contract designation
application was much higher than the cost of reviewing an option
contract. It also determined that, when designation applications for
both a futures contract and an option on that futures contract are
submitted simultaneously, the cost for review of the option contract
application was even lower.
In FY 1993 the Commission lowered the fees for designation
applications to $11,000 for a futures contract and $3,000 for an option
contract from the FY 1992 levels of $15,000 and $7,000 respectively. In
addition, the combined fee for designation applications submitted
simultaneously for a futures contract and option on that futures
contract was lowered to $12,000 from $17,000. These lower fees were
based on a decline in costs through FY 1992 as well as an anticipated
further decline in costs due to revisions of Guideline No. 1.
A review of actual costs of processing applications for contract
market designation for a futures contract for FY 1991, FY 1992 and FY
1993 indicates that, while actual costs have continued to decline, the
average cost over the three year period was $12,199. A review of actual
costs of processing applications for contract market designation for an
option contract for FY 1991, FY 1992 and FY 1993 reveals that the
average costs over the three year period was $3,086. Accordingly, the
Commission has determined that the fee for applications for contract
market designation for a futures contract will be raised to $12,000.
The fee for applications for contract market designation as an option
contract will be maintained at $3,000 in accordance with the
Commission's regulations (17 CFR part 5, appendix B). In addition, the
combined fee for contract markets simultaneously submitting designation
applications for a futures contract and an option contract on that
futures contract will be raised to $13,000.
III. Leverage Commodity Registration
No new applications for leverage commodity registration were
received by the Commission in FY 1993. Accordingly, the Commission will
maintain the present fee of $4,500 for leverage commodity registration.
IV. Registered Futures Association and Exchange Rule Enforcement and
Financial Reviews
The average annual costs for rule enforcement reviews and financial
reviews for each exchange are as follows:
------------------------------------------------------------------------
FY 1991-1993
average annual
Exchange costs for
review services
------------------------------------------------------------------------
Chicago Board of Trade................................. $217,644.28
Chicago Mercantile Exchange............................ 229,993.05
Commodity Exchange, Inc................................ 69,032.61
Coffee, Sugar and Cocoa Exchange....................... 87,703.08
New York Mercantile Exchange........................... 74,624.26
New York Cotton Exchange............................... 142,015.07
Kansas City Board of Trade............................. 36,226.23
New York Futures Exchange.............................. 129,357.71
Minneapolis Grain Exchange............................. 41,014.37
Philadelphia Board of Trade............................ 3,542,42
Amex Commodity Corporation............................. 1,507.53
----------------
Total............................................ 1,032,660.60
------------------------------------------------------------------------
The average annual cost for the National Futures Association is
$298,050.22.
Under the formula adopted in 1993 (58 FR 42643, August 11, 1993,
which appears in 17 CFR part 1, appendix B), the Commission also takes
volume into account in the calculation of these fees. The Commission
looks at trading volume for the three fiscal years to determine the
actual volume for each exchange and its percentage of total trading
volume across all exchanges during that same period. Volume figures are
as follows:
------------------------------------------------------------------------
Percentage
of total
Exchange Three-years volume
average volume across
exchanges
------------------------------------------------------------------------
Chicago Board of Trade..................... 457,111,353 43.1740
Chicago Mercantile Exchange................ 378,706,178 34.9627
Commodity Exchange, Inc.................... 46,220,246 4.1671
Coffee, Sugar and Cocoa Exchange........... 29,746,285 2.7462
New York Mercantile Exchange............... 138,175,629 12.7566
New York Cotton Exchange................... 11,676,287 1.0780
Kansas City Board of Trade................. 4,495,318 .4150
New York Futures Exchange.................. 4,265,358 .3938
Minneapolis Grain Exchange................. 2,136,936 .1973
Philadelphia Board of Trade................ 101,725 .0094
Amex Commodity Corporation................. ............... ..........
----------------------------
Total................................ 1,083,172,202 100.0000
------------------------------------------------------------------------
The formula for calculating the fee is as follows
:0.5a+0.5vt
where:
a=actual cost
v=% of total volume
t=total cost for all exchanges
If the calculated fee using this formula is higher than actual
costs, the exchange would pay only actual costs. If the calculated fee
using the formula is less than actual costs then the exchange would pay
the calculated fee. No exchange would pay more than actual costs. Also,
if an exchange has no volume over the three year period it would pay a
flat 50% of actual costs. The National Futures Association will
continue to be charged 100% of its actual costs.
For example:
The Minneapolis Grain Exchange had an actual cost of $41,014.37
(a), and its three-year volume was 0.1973% of the total three year
volume. As a result, the exchange's fee for FY 1994 is:
(.5)($41,014.37) + (.5)(.001973)($1,032,660.60) = or
20,507.19+1,018.72=21,525.91
Based upon this formula the fees for all of the exchanges and the
NFA for FY 1994 are as follows:
------------------------------------------------------------------------
Exchange/NFA Fee
------------------------------------------------------------------------
Chicago Board of Trade..................................... $217,644
Chicago Mercantile Exchange................................ 229,993
Commodity Exchange, Inc.................................... 56,549
Coffee, Sugar and Cocoa Exchange........................... 58,031
New York Mercantile Exchange............................... 74,624
New York Cotton Exchange................................... 76,574
Kansas City Board of Trade................................. 20,255
New York Futures Exchange.................................. 66,712
Minneapolis Grain Exchange................................. 21,526
Philadelphia Board of Trade................................ 1,820
Amex Commodity Corporation................................. 754
National Futures Association............................... 298,050
------------
Total................................................ 1,122,532
------------------------------------------------------------------------
As in the calculation of fees in previous years, the FY 1994 fee
for the Chicago Board of Trade includes the MidAmerica Commodity
Exchange and the Chicago Rice and Cotton Exchange.
II. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq.,
requires agencies to consider the impact of rules on small businesses.
The fees implemented in this release affect contract markets (also
referred to as ``exchanges'') and registered futures associations. The
Commission has previously determined that contract markets are not
``small entities'' for purposes of the Regulatory Flexibility Act, 5
U.S.C. 601 et seq., 47 FR 18618 (April 30, 1982). Registered futures
associations also are not considered ``small entities'' by the
Commission. Therefore, the requirements of the Regulatory Flexibility
Act do not apply to contract markets or registered futures
associations. Accordingly, the Acting Chairman, on behalf of the
Commission, certifies that the fees implemented herein do not have a
significant economic impact on a substantial number of small entities.
* * * * *
Issued in Washington, DC, on March 7, 1994, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 94-5651 Filed 3-10-94; 8:45 am]
BILLING CODE 6351-01-P
