NIBA Journal

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

August 23, 2024

The Rising Tide of AI in Trade Surveillance: Adapting to an Increasingly Complex Regulatory Landscape and Solving for False Positives

Written by: Joe Schifano, Global Head of Regulatory Affairs at Eventus In recent years, the financial industry has faced mounting pressure from regulators, driving significant transformation within compliance functions. At the National Introducing Broker’s Association (NIBA) event at DePaul University on July 11th, I had the privilege of discussing the potential role of artificial intelligence (AI) in this space with Renato Mariotti and John Falck. The discussion highlighted the existing struggles compliance teams face, the increasing consideration of AI, how regulators are responding to greater use of AI in financial markets, and how companies like Eventus are already leveraging machine learning (ML) to enhance trade surveillance operations. My comments below are focused on trade surveillance. The Escalating Complexity of Trade Surveillance Trade surveillance has always been essential to maintaining compliance in financial markets, but its complexity has surged due to expanding regulatory frameworks and an increase in enforcement actions. Regulations...

AI and Email Marketing

Written by: Adam Aronoff, Founder & CEO, GlossyDev In the fast-paced digital era, staying ahead of the curve is paramount for successful businesses. The advent of Artificial Intelligence (AI) has sparked a revolution across industries, and email marketing is no exception. If you're ready to take your email campaigns to new heights, it's time to embrace the potential of AI. In this article, we'll walk you through the basics of AI and how you can leverage it to supercharge your email marketing strategies. Demystifying AI: A Quick Overview At its core, AI involves the creation of intelligent machines that can simulate human-like thinking and decision-making processes. In the context of email marketing, AI can analyze vast amounts of data, predict outcomes, and automate tasks that were once time-consuming and manual. Let's delve into some ways AI can transform your email campaigns: Personalized Content and Recommendations: AI algorithms can analyze user...

How To Build A Personal Brand (and Why You Should)

By, Jessica Darmoni, The Title Connection In a world where everyone has control of their own narrative, it is important to have a handle on what people think when they think of you. When there is a cool job opportunity and hiring managers are thinking of the right person to fill the role, how do you get your name in the hat? The answer is a mix of promoting your valued services, knowing the right people and maintaining a level of trust and transparency. This is part of your brand, something that you can create and evolve over time. Below are a few things you should think about when building a personal brand. Promoting Your Skills Self-promotion is a challenge for many individuals. One of the ways you can promote your skills is by doing the work no one wants to do. This is a way to make a presence,...

Marketing Strategy: Customer Segmentation

When I am talking with a friend or colleague who wants to kickstart their marketing efforts, my approach is “simpler is better”. It’s a lot like getting off the couch and back into the gym. Often the best way is to start simple and then build up from there. So, what I’d like to suggest to you as a NIBA member firm is to get started with SEGMENTATION of your contacts and customers. Imagine the difference in experience for a commodities trader who receives an email promoting opening an account. In the first email, it has a general header that seems to focus on equity indexes and has several forex symbols shown. In the second example, the entire header is showing commodities and the first content section is specifically about the advantages of trading commodities with your firm. Which email is more likely to get their attention? Which is more...

By NIBARead article

June 27, 2023

4 min read

Marketing and Promotional Material | Compliance Reminders from NFA

NFA Members are required to ensure that their customer solicitations and promotional materials are in compliance with NFA Compliance Rule 2-29. Subsection (a) applies to any type of communication with a customer, whether in person, by telephone, or by e-mail. In particular, it prohibits a Member from making any communication related to its commodity interest business that acts as a fraud or deceit, employs a high-pressure sales approach, or makes any statement that commodity interest trading is appropriate for all persons, and thus sets the basic foundation of appropriate communications with customers. When it comes to standardized promotional material directed to the general public, the possibilities for how information can be presented are wide-ranging, and so NFA's rules go a bit more in-depth. Subsection (b) sets forth specific prohibitions that may not be included in promotional material. NFA Members cannot misstate a fact or omit a fact if the omission...

By NIBARead article

June 20, 2023

6 min read

Practical Considerations in NFA’s Expanding Authority: Compliance Rule 2-51

Written by: Jeffry Henderson, Shareholder, Greenberg Traurig Douglas Arend, Of Counsel, Greenberg Traurig On March 29, 2023, National Futures Association (NFA) adopted Compliance Rule 2-51 (Rule 2-51), which became effective on May 31, 2023. Rule 2-51 expands the scope of NFA's authority to NFA members (Members) and associate members (Associates) engaging in spot or cash transactions in “digital asset commodities.” Rule 2-51 imposes anti-fraud, just and equitable principles of trade and supervisory requirements on Members and Associates transacting in such markets. Rule 2-51 also reconfirms NFA members' disclosure obligations in such markets as originally set forth in NFA’s May 2018 Interpretive Notice 9073 (IN 9073). As adopted, Rule 2-51 applies only to Members’ or Associates’ spot or cash market activities in two digital assets that have derivatives listed on exchanges regulated by Commodity Futures Trading Commission (CFTC): Bitcoin (BTC) and Ether (ETH). In its rule submission to CFTC, NFA noted...

Letter to Membership: Announcing the new NIBA "Toolbox"

To All Registered Derivatives Professionals: NIBA is excited to announce the formation of a new Working Group which will create and regularly update the NIBA Toolbox. NIBA’s Toolbox is a resource center which will be located on our website, theniba.com and provide direct links to information which helps Association Members be proactive on issues pertaining to all aspects of running their businesses. From the NIBA Toolbox, Association Members can access five categories of data: Marketing Regulation/Compliance Training Conferences/Webinars Other (such as technology, cybersecurity and more) Experts and industry professionals from each of these areas are providing everything from compliance updates to training programs and marketing ideas to NIBA Members through our new Toolbox. Other topic areas are likely to be added from time-to-time as needed and as the membership directs. NIBA’s Toolbox will be open on our website soon. We have formed a Working Group to reach-out for materials and...

The Evolution of Trading: Navigating Multi-Broker, Multi-Asset Platforms

By Rob D’Arco, CEO Rival Systems After 20 years of working in the trading industry, I’ve gained a unique perspective working with traders throughout their careers. Technology plays a critical role in their success, from the individual click trader on one exchange to the global firm running ultra-low latency automated trading strategies with an enterprise risk system. This article will explore the technical requirements as traders evolve and the key considerations when deciding which platform to use for a more streamlined, comprehensive trading and risk management experience. A Simple Beginning For a new trader, it's easy to begin trading with one broker, exchange, and account. It's cost-efficient and straightforward. The trader creates an account with the broker, logs into the broker's front end, and starts trading. Your top priority is to get up and running quickly with the least expense and to test your strategies. After that, things operate efficiently...

By NIBARead article

May 17, 2023

2 min read

NIBA Compliance Officers Group Letter

To All Derivatives Compliance Officers: NIBA is excited to announce the formation of a new working group specifically focused on the concerns of compliance officers in the derivatives industry. The Compliance Officers Group (COG) will discuss everything from regulatory updates to rule changes and enforcement actions…all the things you deal with every day. The first meeting of COG is scheduled for September 12 at the Chicago offices of Mayer Brown. We hope to also have a webinar or two during the fall/winter of 2023. This September in-person meeting will be a Roundtable discussion. We’ll discuss two or three “hot” topics in an informal two-hour conversation meant to include everyone’s major concerns and opinions. NIBA’s Compliance Officer Group is open to all compliance officers of firms that are registered with the CFTC and members of the NFA, and lawyers focused in the area of futures and derivatives. At our first meeting,...

CTA Connection Sponsored Content: Working with the IASG Database

While industry veterans in the futures space understand the value of CTAs in a portfolio, hedge fund assets under management dwarf those AUM totals by over thirteen times. To explain it like one of my traders, “There is a multi-trillion-dollar industry pushing stocks no matter how they perform.” We do not have that luxury as investors come to us looking to steady their portfolio and ultimately hold us to a more demanding standard. After all, the marketing machine is owned by our competition. This puts the value of reaching potential prospects at a higher premium. Each conversation is one more that we can position to help someone now or down the road. So where does one look for these investors? If we start with the expectation that most of the desirable clients will be QEP qualified, we immediately cut off 90.3% of the population of the United States who fall...

By NIBARead article

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