NIBA Journal

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

July 12, 2018

Why The Future of Energy Could Be U.S. Natural Gas

Geology dictates that crude oil and natural gas go hand-in-hand. Drill a well for one, and there’s a good chance you’ll also find the other. For years, oil’s coupling with gas (for better or worse) underpinned pricing and trading for a variety of petroleum products worldwide. That includes liquefied natural gas (LNG), which was traditionally bought and sold through long-term contracts linked to Brent crude. The American shale revolution, and the emergence of U.S.-produced LNG as an energy source for markets around the world, changed that, says Derek Sammann, Senior Managing Director, Global Head of Commodities and Options Products for CME Group. “With the global natural gas markets increasingly referencing U.S.-sourced Henry Hub natural gas as a central reference point for global natural-gas markets, what could the future of U.S. energy markets look like?” Sammann asked in introducing the Future of Energy forum at a Chicago Council on Global Affairs...

Chairman's Letter - July 2018

July was named by the Roman Senate in honor of Roman general Julius Caesar, the politician who played a critical role in the demise of the Roman Republic and the rise of Roman Empire. “Dog days” occur in early July, and refer to the time of year when the hot sultry weather of summer usually starts. In the U.S., we celebrate National Hot Dog Month and National Ice Cream Month throughout July. On July 18 and 19, LabCFTC will hold Office Hours at the NYC office of the CFTC focused on FinTech innovation. LabCFTC was designed to give the CFTC better understanding of changing technologies which may ultimately influence the agency’s policy development. To make an appointment to attend Office Hours, contact LabCFTC@cftc.gov. The CFTC’s NYC office is located at 140 Broadway. Have you ever taken a look at the NFA Enforcement and Registration Actions pages? Accessible at nfa.futures.org/news/EnforceRegActions, these...

By NIBARead article

June 28, 2018

4 min read

How to Launch a Crytocurrency Hedge Fund

How to Launch a Cryptocurrency Hedge Fund: Manager Registration Considerations Unlike other private funds, complex analysis is required to determine registration considerations for the manager of a crypto fund. This is because, unlike other asset categories such as securities and futures, cryptocurrency investments are not their own asset class. Rather, such investments are currently regulated by the asset class that a particular instrument most closely resembles – such as a security, commodity, commodity interest, cash or consumer item. Consequently, launching a crypto fund requires an in-depth understanding of securities and commodities laws, as well as on ongoing review of regulatory developments in the crypto space. Below is a sampling of registration-related considerations in relation to the fund’s manager. International regulations and additional crypto investment types are not addressed herein. If a fund invests in a combination of the investment types discussed below or in other investment types, registration considerations must...

By NIBARead article

June 28, 2018

1 min read

Suspense Accounts

If you utilize suspense accounts this is an advisory that recently came out that if you haven't taken note of you should. New guidance that will become effective on October 1, 2018 effects those utilizing certain types of trading activities. Be sure to read through the below advisory to make sure you are covered. If you have questions or concerns we always advise to contact your compliance or legal professional. If you would like a recommendation on a compliance or legal professional who is well versed in this area please feel free to reach out to the NIBA for a referral. READ FULL ADVISORY HERE

By NIBARead article

June 28, 2018

2 min read

CFTC Update

The Commodity Futures Trading Commission (CFTC) announced today that it has unanimously approved proposed amendments to its regulations to simplify obligations imposed on a self-regulatory organization (SRO) when carrying out its financial surveillance program for futures commission merchants (FCMs). The proposed amendments to Regulation 1.52 revises certain minimum standards that an SRO must maintain in its financial surveillance program over FCMs to ensure their compliance with the CFTC rules and regulations as well as those of the SRO. The proposal is a result of the CFTC’s Project KISS initiative, which requested public input on simplifying and modernizing the agency’s regulations to make them less burdensome and costly, while maintaining their regulatory benefits. The comment period for the proposed amendments expires 60 days after the proposal’s publication in the Federal Register. SROs are required by Regulation 1.52 to routinely conduct examinations of FCMs and their compliance with minimum capital, customer fund...

By NIBARead article

June 28, 2018

1 min read

Wash Trades

CME Group’s Market Regulation Department works to protect the market integrity of all four of its Exchanges – CME, CBOT, NYMEX & COMEX. Take a look at the “Wash Trades” video below produced by CME. This is an intro to what to look out for and how to educate yourself about wash trades. These videos are very informative and make for great content when educating new brokers or market participants. NIBA will be publishing more video content on a regular basis and we encourage our members to utilize these tools on their websites and other mediums.

AG Markets Using More Qualitative Data

Agricultural data have been around for almost as long as there have been markets, but the type of data and the amount have changed over time. Whether its data from the U.S. Department of Agriculture, satellite data that forecast weather or growing conditions, or any of the many daily, weekly or monthly reports, market participants sort through reems of information to give them insight on the market. Ken Morrison, editor of Morrison on the Markets newsletter, says he uses several types of market data to help confirm (or contradict) information he gathers from his contacts, helping him make decisions. A lot of the data he uses are quantitative, such as weekly export sales, monthly USDA supply and demand reports, the weekly Commitment of Traders report from the Commodity Futures Trading Commission and the CME Ag Daily Bulletin. But he says it’s also good to get qualitative information about other countries....

CME Group Education: Managed Futures

Educational Course: About Managed Futures Since the advent of investing, participants have always faced a dilemma: where, among the many asset classes, should an investor allocate their money. Layered on top of this important question are additional challenges facing the investor, like where to find global diversification, liquidity, non-correlation, transparency, and long and short strategies. Very few investments encompass all of these features, illustrated in figure 1 below. But managed futures satisfy many, if not all, of the prerequisites an investor needs. View Educational Course.

DePaul/NIBA Summer Symposium

The 5th annual joint NIBA/DePaul University Symposium to take place on Wednesday, August 8, at the DePaul University’s downtown campus located at 1 E. Jackson Blvd, Chicago, from 2:00 p.m. to 5:00 p.m. Doors open at 1:30 p.m., and the program ends with a wonderful cocktail reception starting at 5:00 p.m., on DePaul’s beautiful rooftop patio. A line up of special guest speakers will discuss a variety current and relevant topics that you’ll find interesting and informative. Space is filling up quickly so Please register soon for this special event! REGISTER HERE

Chairman's Letter - June 2018

Scholars generally agree that June is named after Lucius Junius Brutus (545-509 BC), the soldier-legislator credited with founding the Roman Republic after he overthrew its longstanding monarchy. In addition to being the most popular month for weddings in the United States, June also includes National Ice Cream Soda Day (June 20) and National Take Your Dog to Work Day (June 23). On June 5, NFA announced its intent to develop proficiency requirements for individuals who engage in swaps activities. The program will be applicable to all APs at FCMs, IBs, CTAs, CPOs and APs at swaps dealers and accessible online. NFA has formed an Advisory Committee to develop the requirements, and invites members to provide input or suggestions. Call Kristen Scaletta, Associate Director of Communications at (312)781-7860 or send her an email, kscaletta@nfa.futures.org. The CFTC held an open meeting on June 4 to discuss among other issues: (i) proposed rule...

By NIBARead article

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