NIBA - Celebrating 35 Years

NIBA Journal

Insights, analysis, and updates from the National Introducing Brokers Association

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Marketing
1 min read

CFTC Consumer Outreach Update - November 2012

In 2010, Congress passed the Dodd-Frank Wall Street Re-form and Consumer Protec-tion Act, which states that the CFTC can fund customer education initiatives to help customers protect them-selves against fraud or other violations of the Commodity Exchange Act. In response, the CFTC established an Office of Consumer Outreach (OCO). Prior to establishing the OCO, CFTC staff re-viewed other federal agency financial education programs and budgets, and Commis-sioner Scott O’Malia con-ducted a hearing to gather insights into how to design the OCO. Read Full Article (PDF)

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Marketing
4 min read

NFA Announces Nominations Made by the 2012 Nominating Committee

Notice to Members I-12-26 November 9, 2012 Please Route To: Compliance/Legal Sr. Management NFA Announces Nominations Made by the 2012 Nominating Committee In accordance with NFA Bylaw 406, the Office of the Secretary has received from the 2012 Nominating Committee a list of its nominees for positions on NFA's Board of Directors and 2013 Nominating Committee. The list of nominees included with this notice shall serve as notification to NFA Members of the candidates proposed by the 2012 Nominating Committee. Other nominations may be made by petition. Article VII, Section 3(b) of NFA's Articles of Incorporation provides that: "Nominations may be made for elected FCM and LTM, IB, and CPO and CTA Director positions by: (i) Petition signed by 50 or more NFA Members* in the category for which the nomination is made (i.e., FCM and LTM, IB, and CPO and CTA); or (ii) Petition submitted by any organization or...

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Marketing
2 min read

NFA announces workshop to assist SDs/MSPs in the 4s documents submission and review process

November 6, 2012 NFA announces workshop to assist SDs/MSPs in the 4s documents submission and review process National Futures Association will hold its first in a series of workshops to assist swap dealers (SD) and major swap participants (MSP) with the registration process. This three-hour workshop, presented by NFA staff, will be held at NYMEX World Headquarters in New York on November 28. The workshop will cover the registration process starting from the filing of Form 7R to the completion of all components required to obtain a provisional registration status. NFA staff also will discuss timelines for completing each registration component; fee payment wiring instructions, including cut-off times; and other important registration-related issues. Workshop Details: Date: Wednesday, Nov. 28, 2012 Time: 1:30 to 4:30 P.M. Location: NYMEX World Headquarters World Financial Center One North End Ave. Conference Room New York, N.Y. 10282 Speakers: Jamila Piracci, VP, OTC Derivatives Greg Prusik,...

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Marketing
7 min read

Sourcing Hidden CTA’s

As 2012 comes to a close it’s apparent the commodity interest markets have had a tough year. We’ve continued to watch the developments of MF Global, seen Peregrine Financial Group (“PFG”) come unglued and nearly watched Knight Capital crumble after a trade error. We’ve seen commission rates continue lower, talked to clients who are uneasy about investing in our industry, and have had to deal with the many considerations of the Wall Street Reform Act (“Dodd Frank”). Yet, even with all the setbacks, the managed futures space has continued to grow; attracting interest from investors the world over. This article intends to examine several ways that your brokerage can separate itself from the pack and take advantage of the growing interest in the managed futures asset class. Differentiate Yourself As an Introducing Broker one of the things that can be presented to your customers is your expertise in the managed...

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Marketing
3 min read

Increased Financial Disclosures by FCMs for the Trading Community

As of September 1st, the NFA increased the financial reporting requirements for FCMs who hold customer funds pursuant to Section 16. In an effort to increase disclosure for the brokerage and investing community, the NFA’s Board of Directors decided in August to make those disclosures available on each FCM’s BASIC page. These reports should be available by November 1st. They will reflect information for each FCM as of September 30th. The NFA will be adding the three following reports for each FCM to their respective BASIC pages: The Capital Report This monthly report will be presented on a rolling 12 month basis, beginning with the initial September report. This report will include the firm’s adjusted net capital, their required net capital and their excess net capital for the most recent reporting period. The Customer Segregated Funds Report Although this is a semi-monthly report, like the Capital Report, it will be...

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Marketing
1 min read

CME has deal to acquire Kansas City Board of Trade

CME Group said it is buying the Kansas City Board of Trade for $126 million in cash. The derivatives exchange said buying the bourse, its first exchange purchase in five years, is a way to expand its agricultural products. The KCBT's board selected CME over other exchanges, including BATS Global Markets and IntercontinentalExchange, sources said. The proposed deal makes the Minneapolis Grain Exchange the last independently owned agricultural exchange in the U.S. Reuters (10/17), Crain's Chicago Business/Reuters (10/17), Bloomberg Businessweek (10/17), Fox Business/Dow Jones Newswires (10/17), Reuters (10/18)

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Marketing
2 min read

District Court Overturns CFTC Position Limit Rule

FIA Special Alert Sept. 28, 2012 District Court Overturns CFTC Position Limit Rule Today the US District Court for the District of Columbia struck down the CFTC's position limit rule, which was scheduled to go into effect on October 12, 2012. The court ruled in favor of the plaintiffs?the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association. The court found that the CFTC "fundamentally misunderstood" the relevant provisions of Dodd-Frank and rejected the CFTC's interpretation that Dodd-Frank makes the imposition of position limits "mandatory," rather than "as appropriate" to prevent excessive speculation. The court stated that the case revolved around the question of whether a plain reading of section 6a of the Commodity Exchange Act "clearly and ambiguously requires the Commission to make a finding of necessity prior to imposing position limits." Based on its reading of the statute, the court concluded, "The answer is...

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Marketing
2 min read

NFA announces second New York regulatory workshop for entities that currently operate commodity pools whose exemptions expire on December 31, 2012

September 25, 2012 NFA announces second New York regulatory workshop for entities that currently operate commodity pools whose exemptions expire on December 31, 2012 NFA will present an encore workshop in New York for entities that, due to the recent CFTC rule amendments, are operating or advising commodity pools that had previously been exempt from registration as CPOs or CTAs. The addition of this second workshop is in response to the significant demand for the initial workshop, which will be held on September 27. The day-long, encore workshop, presented by NFA staff and other futures professionals, will focus on the registration process, disclosure document preparation, performance reporting, financial reporting requirements, sales practices and the NFA audit process. The second workshop is scheduled for October 23, 2012, and will be held at the NYMEX Building (One North End Avenue). The fee to attend the workshop is $200. This fee includes continental...

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Marketing
5 min read

Your FCM; Hero or Villain? Part II

Although it seems like only yesterday the National Introducing Brokers Association (“NIBA”) panel on “Assessing FCM Risk” took place over two weeks ago. If you were part of the standing room only audience thank you for attending! Your support meant a great deal to NIBA, Turnkey Trading Partners, and the other panelists. If you weren’t able to attend this year’s Chicago conference the following is a quick overview of what was discussed. If you’d like more details please see my pre-conference article “Your FCM; Hero or Villain?” or feel free to contact Turnkey Trading Partners at any time. 1. Review Previous Regulatory Violations: Remember that not all regulatory violations are created equal. As an example violations for sales practices and advertising can be much different than violations in capital sensitive areas. Investors should approach with caution firms that have previous anti-money laundering or capital level infractions. Also, always be sure...

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Marketing
6 min read

CFTC Regulation 1.71 – Conflicts of Interest

The Commodity Futures Trading Commission (CFTC) recently adopted CFTC Regulation 1.71 to implement new section 4d(c) of the Commodity Exchange Act, which requires FCMs and IBs to implement a conflict of interest system and procedures with respect to its research function and its trading and clearing activities. Except as for the requirements under Regulation 1.71(d) related to clearing activities, FCMs and IBs were required to be in compliance with Regulation 1.71 by August 3, 2012. Although the final rulemaking set a June 4, 2012 compliance date, the Commission issued a No-Action letter on June 1, 2012 extending the final compliance date for Regulation 1.71(a)-(c), (e) and (f) to the August 3, 2012 date. A copy of the final regulation is available at http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2012-5317a.pdf. Under CFTC Regulation 1.71, FCMs and IBs are required to adopt written policies and procedures that are reasonably designed to ensure that the firm and its employees...

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