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NIBA Journal

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

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Marketing
2 min read

Family Farmer & Rancher Fund Applications Due

Following the insolvency of PFGBest, CME Group has been accepting applications from farmers, ranchers and agricultural co-operatives to register for benefits under the CME Group Family Farmer & Rancher Protection Fund. In order for CME to begin paying benefits to qualifying customers under this Fund, Applications must be received by the close of business at 5:00pm Central Time, Friday, October 5, 2012. Following the October 5 deadline, CME Group expects to pay benefits to qualifying customers in the fourth quarter of this year. The following requirements apply to be considered for benefits: The applicant must be a farmer, rancher or agricultural coop and must complete the application for the registration available on CME Group's website. The applicant must submit photocopies of appropriate tax documentation along with the application, as described in the application's instructions. The applicant must have held one or more positions in CME Group agricultural products covered by...

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Marketing
2 min read

This Year is all About the Weather | Chicago Conference Follow Up

U.S. corn and soybean yields were dramatically reduced by the drought and heat wave of 2012. Hints of the drought began in mid-May as the coverage of subsoil dryness rapidly increased. Drought conditions reached a breaking point in mid-June when it became apparent that unusual warmth dating to November 2011 would continue. Close monitoring of weather and soil conditions helped our customers manage their risk leading into and during rapid upward price movements in each crop. Throughout 2012, the Pacific Ocean has warmed and the first El Niño event since July 2009 - April 2010 is beginning. Although the upcoming El Niño is only expected to be weak or moderate, it decreases the odds for a repeat drought in South America during the upcoming corn and soybean growing season. Heavy rainfall in August and early September across Argentina provide an additional hint that drought is unlikely, and t-storms in Brazil...

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Marketing
1 min read

Industry Snapshot: Introducing Broker Business Today

"The information detailed below is taken from an online survey of current NFA registered Introducing Brokers (IBs) conducted in July 2012. The survey contained a series of questions ranging from operational preferences to the effects of recent devastations as a result of the MF Global, Inc., (MFG) and the Peregrine Financial, Inc., (PFG) failures on the IB community." » View Full PDF, Courtesy of CME Group

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Marketing
3 min read

Chief Compliance Officer Requirements Become Effective for Certain FCMs on October 1, 2012

Notice to Members I-12-21 September 14, 2012 Chief Compliance Officer Requirements Become Effective for Certain FCMs on October 1, 2012 Effective October 1, 2012, FCMs that are currently regulated by a U.S. prudential regulator or that are also in some capacity registrants of the Securities and Exchange Commission must have a designated Chief Compliance Officer (CCO) under CFTC Regulation 3.3, and that person must also be a listed principal of the firm. In addition, those FCMs will be required to file the CCO Annual Report as of the date of the firm's first fiscal year end after October 1, 2012. This notice contains important information about listing with NFA the firm's CCO as a principal and the filing of the CCO Annual Report. Designating a Chief Compliance Officer If the designated CCO is not a listed current principal of the FCM, the FCM must file a CFTC Form 8-R for...

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Marketing
4 min read

NIBA Trustee Letter

September 10, 2012 Ira Bodenstein, Trustee for PFG Best By Email Only - ibodenstein@shawgussis.com Mr. Bodenstein: I write on behalf of the National Introducing Brokers Association (NIBA). Founded in 1991, the NIBA is a membership association of futures and options professionals registered primarily as Introducing Brokers (IBs). I write with regard to a specific distribution method your office proposed last week in the Peregrine Financial Group (PFG) bankruptcy, Docket Document #147: a proposal to make a bulk transfer of futures customers accounts with an interim distribution of funds, all to a qualified “acquiring FCM.” It seems to us that the time for a bulk transfer has come and gone. Had it happened immediately on or about July 10, 2012, when PFG filed for bankruptcy, customers might have continued to trade, and the terrible situations in which many of the IBs who did business with PFG now find themselves, might have...

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Marketing
2 min read

National Futures Association announces registration information webinar for swap FCMs, IBs, CPOs and CTAs

September 7, 2012 National Futures Association announces registration information webinar for swap FCMs, IBs, CPOs and CTAs The Commodity Futures Trading Commission (CFTC) recently published its final rule definitions for "swap," "security-based swaps" and "security-based swap agreements." As a result, firms that are not currently registered with the CFTC, but are acting as an FCM, IB or CTA with respect to swaps subject to the jurisdiction of the CFTC, will be required to register. Firms acting as CPOs also are required to register, unless the firm properly claims an exclusion or exemption from registration via NFA's Electronic Exemption System. To help these new swap FCMs, IBs, CPOs and CTAs understand the registration process, NFA will present a webinar on Thursday, September 20 at 11:00 a.m. EST. During this 60-minute webinar, NFA staff will provide an in-depth discussion of the registration process for these new swap intermediaries, outline the regulatory requirements...

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Marketing
1 min read

NFA Rule Submission Letters

NFA submitted the following rule submission letters to the CFTC: Recordkeeping – Proposed Amendments to NFA Compliance Rule 2-10 » View Letter (PDF) Protection of Customer Funds – Proposed Amendments to NFA Financial Requirements Section 4 To Provide OnLine View-Only Access to FCM Customer Segregated/Secured Amount Bank Account Information » View Letter (PDF)   The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading information and trading programs are not endorsed by the NIBA, but are the individual opinions, styles, information and programs of the author.

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Marketing
2 min read

CME Group | Conference Session Overview

For CME Group, nothing is more important than the confidence customers have in our marketplace and the protection of our customers when using our markets. Earlier this year, CME Group launched the CME Group Family Farmer and Rancher Protection Fund, which is currently accepting applications from farmers, ranchers and cooperatives who traded in CME Group markets and suffered losses from the failure of PFG. As an IB, you can help your clients sign up for the program and find additional information at www.cmegroup.com/clearing/family-farmer-fund.html Since the failure of MF Global and Peregrine Financial Group (PFG), CME Group, in conjunction with the NFA, CFTC and others in our industry, have put in place and are in the process of implementing a number of new requirements designed to deter another firm from misusing customer funds. Enhancements that are already in place include: Daily segregated funds reports now required from all FCMs. Bimonthly SIDR...

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Marketing
1 min read

Economic Outlook - Macro, Micro and Agricultural

David Oppedahl is a business economist in the economic research department at the Federal Reserve Bank of Chicago, where he directs the Chicago Federal Reserve District’s survey of agricultural banks on agricultural land values and credit conditions. He regularly briefs the Chicago Federal Reserve on the state of our agricultural economy, including rural development, and other microeconomic research. The results of Mr. Oppedahl’s research are used to publish the Chicago Fed’s quarterly agricultural publication - AgLetter. David will present an economic outlook session at the NIBA September 12 program which incorporates current data with an explanation of the slow economic growth since the Great Recession of 2007-2009. Included is a discussion of the role the Federal Reserve has played in stimulating the economy and current developments in the agricultural economy. Mr. Oppedahl can be contacted at david.oppedahl@chi.frb.org, He invites questions and suggestions which he will address at the NIBA meeting....

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Marketing
2 min read

Risk Assessment - FCM Style

Today’s FCMs face not just one risk, but many. Regulatory changes may dramatically alter the business model and viability of some. For other, managing risk associate with outsourcing key operations to 3rd party technology providers poses a challenge. And, of course, the financial risks some FCMs are taking in response to both internal and external pressures to perform are compounded by the current market environment. For over 20 years, Michael Coglianese CPA, P.C. has specialized in providing Introducing Brokers, CTAs and Funds with efficient and timely professional services, including audits, and compliance reviews. Tax preparation is tailored to each client’s specific operation and business strategy with the ultimate goal of developing more profitable business for the end user. Michael’s experience and contacts in our industry have given him a broad perspective on the regulatory, operational and financial risk facing FCMs today, and how they are responding. He will be moderating...

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