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NIBA Journal

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

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Trading Technology
2 min read

Utilities Look Beyond Fintech to Create Innovation in the Market

Fintech is more than just a buzzword. Fintech represents the innovation in services and technology that will disrupt business models, business processes and software applications in the coming years, in nearly every financial services business globally. Examples abound in digital strategy and transformation, blockchain and distributed ledgers, and more. But where do industry utilities fit into this exciting new world of innovation? Utilities are another form of innovation that take the operations and technology processing that is replicated over and over again in the industry and consolidate it into a single, standardized operating model. The goal of utilities is to shift the responsibility for maintaining and investing in non-differentiating processes and technology to vendors, so seeing the words “utility” and “innovation” in the same sentence may seem like a contradiction in terms, but I beg to differ. Utilities are incentivized to make further investments in technology automation to achieve the...

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Trading Technology
4 min read

Why Hackers Hack Websites: Securing Your Website for Compliance and to Protect Your Business

With the upcoming cybersecurity requirements by the NFA and nearly every regulatory body overseeing financial service industry participants, it’s important to not only comply with cybersecurity regulations but to use this as an opportunity protect your business’ website. Many businesses believe their website isn’t important enough to require website security for the following reasons: My company is too small My website doesn’t store sensitive client information My website is not that important to their business Hackers don’t discriminate by business size, may or may not target your client information directly, and will damage your brand reputation. Here are reasons why hackers hack websites: 1. Vandalism and activism By switching out your home page with messages supporting questionable organizations such as hacker or terrorist groups, hackers are able to spread their message on your website. 2. To host illegal or objectionable content Media such as photos, video, or audio are stored...

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Trading Technology
3 min read

Cyber Security

While attending the recent NIBA conference, we learned about new rules affecting our industry. Brokers will no longer be able to email client documents to their customers, clearing relationships, or service providers without being highly aware of their duty to protect client information from would-be hackers. This is big adjustment for the industry. Just as we adapt to the fluctuating Chicago seasons, in time, we will learn to adjust to these new rules as well. At Midland, we provide administrative and custodial services for futures accounts for individuals that are using IRA money to invest in these products. As the administrator, we require documents to setup and fund these investments: account statements, FCM paperwork, CTA disclosures, letter of direction, and so on, depending on the nature of the product. For the past many years, documents have been sent primarily by email, fax, and regular mail. In the digital age, no...

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Trading Technology
2 min read

Cybersecurity: Before & After the Breach

Security breaches are quite prevalent in the media today. Many security experts feel it’s not a question of if your company will suffer a breach of your information, but when. A panel at the NIBA Annual Members Meeting recently explored this topic. Preparation for a potential event is key to being able to address it. Information Technology (IT) enterprises of all sizes need to know exactly what data they have, where it is stored, and what the potential threats to the data are. Even small companies need to pay attention to the basics of securing their computing environment. These include: • Timely patching of operating system and other software • Using strong passwords for machine access • Performing backups of critical data • Protecting sensitive data through full disk or file encryption • Using a host-based firewall and anti-virus software • Learning to recognize phishing and other scams Drafting an...

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Trading Technology
4 min read

Cybersecurity: A New Frontier for IBs and CTAs

The importance of cybersecurity has taken many industries by storm, and the futures industry is no exception. Indeed, CFTC Chairman Timothy Massad has recognized cybersecurity as “the single most important new risk to market integrity and financial stability.” The CFTC has been active in cybersecurity awareness for a couple of years, but the agency’s recent laser-like focus has made cybersecurity awareness an imperative rather than a consideration. The CFTC began to take earnest steps with respect to cybersecurity in February 2014, when it issued CFTC Advisory No. 14-21, which outlined the best practices for meeting cybersecurity responsibilities. In the Advisory, the CFTC cautioned that IBs, CTAs and others should, “at a minimum,” abide by several “best practices,” which include: • Designating an employee with privacy and security management oversight responsibilities; • Identifying all reasonably foreseeable risks to security, confidentiality, and integrity of personal information and related systems; • Designing and...

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Trading Technology
2 min read

Cybersecurity

Cybersecurity is the #1 issue on every financial professional's mind in the fall of 2015. What risks should I be aware of? What safeguards can I put in place? What should I do if I'm breached? What will the NFA require? What will it cost? At the September 24 Annual Members Meeting in Chicago, two panels of experts will answer these questions, among others. "Cybersecurity: Before & After the Breach" will be presented at 2:30PM -- it is sponsored by NADEX. Arlene Yetnikoff, Director of Information Security at DePaul University & Lecturer at the University of Chicago, will moderate a panel discussing what cybersecurity involves, and what steps you can take to prevent a breach of customer information. This panel includes Dan Romanelli, Delta Risk; Gil Vega, CME Group and Jeffrey Hartman, 4Discovery. "Cybersecurity: What You Need to Know Now!" will be presented at 3:30PM -- it is sponsored by...

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Trading Technology
4 min read

The Remarkable Growth of Options on Futures

Trading of futures options is growing rapidly and has widely been viewed as a market primed for expansion. While somewhat nascent compared to equity and index options markets, the Tabb Group expects futures options activity to grow strongly as financial market participants increasingly use these products as part of their investment and hedging strategies. Factors such as changing interest rate policies, the increased electronification of options, technology advancements and underlying futures becoming more attractive to investors are all having an impact. Post-financial crisis, we’ve seen the popularity of options on futures grow across all asset classes at CME Group. In April, we experienced significant growth in options as open interest jumped to more than 51.6 million contracts, up 21 percent year over year. Average daily volume in options across asset classes was nearly 2.3 million contracts, with more than 52 percent of those options trading electronically. During the first quarter,...

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Trading Technology
2 min read

FinTech Exchange | April 23, 2015

On April 23, the inaugural FinTech Exchange, brought to you by Barchart OnDemand, in association with FinTEx Chicago, will take place in Chicago. Registration for this new, half-day event is limited to the first 400 attendees, so be sure to register early to save your seat! You will have the opportunity to hear from over 20 leaders in Financial Technology innovation, specific to Financial Markets & Trading. April 23 at 1pm Feinberg Theatre, Venue SIX10 - Chicago *For more information and to register, visit: www.FinTechChicago.com Topics will include: Cloud Computing Trading Software Big Data Analytics Algo Trading High-Speed Networks Crowdsourced Market Data Cognitive Computing Mobile Technologies and more Onstage, "TED Talks" style presentations will include: IBM Watson, Amazon Web Services and CME Group Followed by Lightning Round presentations, featuring: Trading Technologies, Orc, CQG, Estimize, Eurex, Gate 39 Media, QuantGo, Anova Technologies, Social Market Analytics, OptionsCity, Tradier, Markets Tech, Vertex Analytics...

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Trading Technology
2 min read

Big Trends in Big Data:

Reprinted with permission from DePaul Business Exchange.  © 2014 by DePaul University Driehaus College of Business. All rights reserved.   Ninety percent of the data that exists in the world today has been created since 2010.   The consulting firm IDC predicts that by 2020 this digital universe will expand by a factor of 300, from 130 to 40,000 exabytes.   How much is that? One exabyte has 18 zeros behind it.   In people terms, that’s more than 5,200 gigabytes of data for every man, woman and child on Earth by 2020.   Consumers are the main source of this growth, creating more than two-thirds of the data in cyberspace through videos watched, photos shared, social media messages sent and purchases made online. Add to this a mountain of machine-generated data from smartphones, tablets and networked computers, plus supermarket scanners and other sensors, and what has come to be...

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Trading Technology
3 min read

The Cloud

I wrote this article in the “cloud”. You’ve certainly heard this term and have no doubt used a cloud service. But, what does the cloud mean and how are financial services firm taking advantage of it? To start, if you use Gmail or Google Drive / Docs you are using the cloud or a cloud service. Both are convenient services in the sense that you can access them from anywhere (and any device) and in the case of Google Docs you can share access and make simultaneous contributions. None of the information is stored on your computer (or phone or tablet) nor do you install any software (you simply use a browser), and in the case of a business operation you do not need to acquire and maintain any servers—in a physical sense. Google handles all of this for you—giving you a cloud to operate within. You essentially are leasing...

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