NIBA Journal

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

November 27, 2018

CFTC and K-State to Host 2nd Agricultural Commodity Futures Conference

The Commodity Futures Trading Commission (CFTC) and the Center for Risk Management Education and Research (CRMER) at Kansas State University will host AgCon2019, the 2nd annual agricultural commodity futures conference on April 11-12 in Overland Park, Kansas. The CFTC and CRMER will again jointly host the conference, which brings together federal, state, and local governments with agribusiness and academia to discuss a range of topics that are important to the agricultural community who depend on the futures markets. “We are excited to once again partner with K-State to discuss significant derivatives-markets issues affecting the agricultural community. AgCon2018 brought together stakeholders from industry, government and academia — to explore a wide range of topics facing the agricultural futures markets,” said CFTC Chairman J. Christopher Giancarlo. “The robust presentations and insightful panel discussions from that first conference started important conversations on numerous issues facing the agricultural community. Next year, we plan to...

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November 27, 2018

4 min read

Reminder: New Virtual Currency Disclosure Requirements

Due to the significant growth of the virtual currency market, the NFA has proposed an interpretive notice to the CFTC invoking the “ten-day” provision and will make it effective 10 days after receipt of submission. The notice was put forth because of concerns that customers do not fully understand the nature, volatility, and substantial risk involved with trading virtual currencies. Therefore, NFA is implementing new disclosure requirements for NFA Members engaging in virtual currency products. For IBs and FCMs, an Investor Advisory: — Futures on Virtual Currencies Including Bitcoin an the CFTC Customer Advisory: Understand the Risk of Virtual Currency Trading, to any customer that engages in a virtual currency derivative transaction with or through the FCM or IB Member. For introduced accounts, the advisories may be provided by either the FCM or IB Member. If the FCM or IB member has customer that traded virtual currency derivatives before this...

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November 15, 2018

1 min read

5th Annual Cyber Risk Conference at DePaul University

New and evolving technologies such as artificial intelligence, predictive analytics, machine learning and robotic process automation are now an everyday reality. Similarly, use of the Cloud and third-party systems have grown dramatically as the technology has become more complex. Business practices are being rapidly transformed in all sectors—from expediting insurance claims, automating financial processes and revolutionizing search algorithms to heralding a paradigm shift in cyber security and military technology. These emerging technologies provide a host of new benefits, but also create a horde of new risks. In this conference, we’ll discuss the real impact that these technologies have on all businesses—not just tech-firms. NIBA members receive a 20% discount on registration. Enter code NIBA to receive the discount. Click here to Register

Options on Futures as Strategic Investment Vehicles

A new report from Tabb Group explores why more companies are using instruments like options on futures. From explosive growth in electronic trading to regulatory tailwinds incentivizing their use, options on futures present expanded opportunities in today’s financial markets. Read case studies on how options on futures enhance many hedging and trading strategies – and deliver more cost efficiencies than over-the counter alternatives. [Read Report]

Chairman's Letter - November 2018

When January and February were added to the Roman calendar and November became the eleventh month of the year, it retained its original Latin name novem meaning nine -- I think I’ve got that right this month Rob! (See last month’s correction) November in the United States means Thanksgiving, National Apple Cider Day (18th) and Black Friday (23th). Most of us are also familiar with Cyber Monday, the biggest online shopping day of the year. But Cyber Tuesday, organized and presented by DePaul University, Downtown Campus is a not-to-be missed event for NIBA members. Now in its 5th year, this year’s program theme is CyberRisk Evolution, and it will focus on four main topics: * Emerging cyber threats * Supply chain security * Evolving Insurance * Privacy Issues I’ve enjoyed all the previous years’ events, and find that perspective from businesses which include but are not solely focused on the...

NIBA Advisory Group

Four years ago, NIBA created an Advisory Group (AG). The AG includes participants from all areas of the derivatives industry --including among others, regulation, agriculture, marketing, legal, education and brokerage. The purpose of the group is to advise, suggest and create dialogue which will help the board of directors develop and implement programs which meet its mission to provide education, compliance information and revenue-generating ideas to our members. Rodney Dow, (The Dow Corp) is the NIBA board member who currently chairs the AG, which meets once each year. This year’s meeting is scheduled for November 28. The Advisory Group for the 2018 Meeting includes: * Mackenzie Billings, CME Group (Exchange Issues) * Mike Dancey, Managed Accounts Research, Inc. (Managed Funds) * Rob DeMuria, Compliance Supervisors, Inc. (NFA Regulation/Compliance) * Paul Georgy, Allendale, Inc. (Agriculture & IB Issues) * Dr. Carl Luft, DePaul University (Education Initiatives) * Tom McCarthy, Liccar (Accounting/Tax...

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October 25, 2018

2 min read

CTA/CPO Ratio Errors; NFA PQR and PR Filings

This month NFA put out a fantastic reminder about common CTA/CPO ratio errors and the obligations facing reporting firms. In particular they have laid out their expectations for CTA and CPO ratio reporting. Please consider the following directly from NFA as a number of CPOs and CTAs have been incorrectly reporting these financial ratios: 1) Ratios must be calculated using the accrual method of accounting CPOs and CTAs are incorrectly calculating these ratios because they are using cash basis of accounting. Both ratios must be computed using the accrual method of accounting and in accordance with U.S. generally accepted accounting principles or another internationally recognized accounting standard, consistently applied. The accrual method of accounting requires that revenues and expenses be recorded in the period in which they are earned or incurred rather than when they are received or paid. 2) Current asset balances must only include assets owned by the...

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October 25, 2018

1 min read

CFTC to Hold Open Commission Meeting 11/5

Washington, DC — Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced today that the CFTC will hold an open meeting on Monday, November 5, 2018 at 10:00 a.m. to consider the following: Final Rule: Amending the De Minimis Exception to the Swap Dealer Definition Proposed Rule: Amendments to Regulations on Swap Execution Facilities and the Trade Execution Requirement Request for Comment regarding the Practice of “Post-Trade Name Give-Up” on Swap Execution Facilities The meeting is open to the public with seating on a first-come, first-served basis. Members of the public may also watch a live webcast or listen to the meeting via conference call using a domestic toll-free telephone or international toll or toll-free number to connect to a live, listen-only audio feed. Persons requiring special accommodations to attend the meeting because of a disability should notify Chanel Smith at (202) 418–5080. For more information please click here

A Correction from Melinda Schramm...

Rob DeMuria, Compliance Supervisors Inc., noticed something wrong in the October Chairman’s Letter posted two weeks ago. I wrote: “In Latin, ‘octo’ means eight. October, the eighth month of the year is recognized traditionally throughout the world as the gateway to winter.” October is obviously not the eighth month of the year! I went wrong when I edited my own writing, and deleted a portion of the paragraph. It should have read, “In Latin, ‘octo’ means eight. October, the eighth month of the year in the old Roman calendar (prior to the addition of January and February into the calendar to make a 12-month year), is recognized traditionally throughout the world as the gateway to winter.” No, I wasn’t inserting wrong info just to see if anyone reads the Chairman’s Letter -- I just goofed! Thanks to Rob, longtime NIBA Service Provider and Advisory Group member, for the correction.

NFA BoD Executive Rep Reminder

Executive Representative Reminder and Board and Nominating Committee Members Whose Terms Will Expire at the Board's 2019 Regular Annual Meeting Executive Representative Reminder In August 2016, NFA's Bylaws were amended to implement an electronic voting process for Directors' elections, contested Nominating Committee member elections and Articles' amendments approval votes. If elections are necessary, NFA has engaged Corporate Election Services (CES), a third-party service provider, to administer the electronic voting process. To facilitate the electronic voting process, each Member shall designate an Executive Representative who will have the Member's sole authority to sign nominating petitions, receive notices of Member meetings and proxy materials, complete proxy cards and provide voting instructions and cast votes on behalf of the Member. Members may designate an Executive Representative through NFA's website. Only those firm personnel who are the Security Manager or are authorized to view, update and file information in ORS may complete the Executive...

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