Insights, analysis, and updates from the National Introducing Brokers Association
DePaul University remains a terrific source of qualified, quick-to-learn, hardworking individuals who have an interest in the derivatives business. Many NIBA members have welcomed students from the University as summer interns -- several of those interns have gone on to become employees. For more information, contact Mark Shore, mshore1@depaul.edu.
With an overwhelming majority of traders using online brokerages, QuantGate’s mission is to empower traders worldwide to trade more dynamically in any market at any time. Using proprietary algorithmic logic and advanced machine learning that has been developed over 20 years, we quantify the collective perception of the market by monitoring the collective behaviour of all traders who are actively participating in the market. With multiple types of platforms available, it is our mission to bring this technology to all types of traders across multiple asset classes. It’s not where the market has been nor where it is right now that matters (which is what price charts offer), but rather the direction in which it’s heading (what price charts do not offer). When people refer to sentiment they generally refer to social media sentiment and the at-the-moment effects. These positive or negative social media trends can affect anything from a...
NFA held its Annual Meeting Feb. 2, 2021. Some take-aways and responses to NIBA members’ specific questions are: NFA General Operating well with about 3-7% of staff in the downtown office. Financial, IT and Cybersecurity areas are all strong. COVID Relief (in co-ordination with CFTC) NFA is discussing a possible re-definition of what a “branch office” is in light of “work-at-home” issues with most IBs. Oral Recording Requirement: Due to expire March 31 -- will likely not be extended by CFTC for IBs. Time-Stamping Requirement: Due to expire April 15 -- may be extended by CFTC after evaluation of the methods and efficacy firms have/are implementing. Exams Virtual or hybrid exams are currently working well. NFA continues to monitor market volatility and will closely monitor firms that are impacted. There are issues at times in getting documents or responses from firms, but for the most part the exams are being...
On behalf of the American Financial Exchange, I wish all the NIBA members a happy, healthy and prosperous New Year. I know 2020 has been challenging, but I want to start on an uplifting note to remind us all that how we face our difficulties can make a big difference in the levels of success we achieve moving forward. Here’s to 2021, and learning lessons from this past year that will catapult us into a brighter future. I want to share with you a link to a story that ran in BankDirector.com where I talk about the end of Libor—the most important number in finance—and where we go from here… https://bit.ly/2ITC9CA Richard L. Sandor, Chairman and CEO, The American Financial Exchange
By: Cameron R. Scullen, Esq., Associate Attorney, Ruddy Gregory, PLLC* In today’s modern day world, the issue of whether not traders and firms have adequate cybersecurity is constantly discussed. In fact, regulators themselves are noting the potential severity of cyberattacks: “Cybersecurity is a risk that the Division of Swap Dealer and Intermediary Oversight (“DSIO”) and [U.S. Commodity Futures Trading Commission (“CFTC”)] take seriously.”(1) But – it is one thing to take notice and another to protect one’s business with adequate cybersecurity. The CFTC conveyed the same in its recent public statement that was titled the following: CFTC Encourages Standardized Approaches to Assessing Cybersecurity Preparedness, Including the FSSCC Cybersecurity Profile. Therein, the CFTC reiterates that firms subject to its regulatory oversight must follow “generally accepted standards and best practices with respect to the development, operation, reliability, security, and capacity of their automated systems” pursuant to CFTC regulations(2). However, the CFTC remains...
By Braden Perry, Partner at Kennyhertz Perry, LLC Earlier this year, the COVID-19 pandemic caused businesses to rapidly deploy a remote workforce, which created new challenges for financial firms to continue operating and providing critical services. It also created an opportunity for malicious actors to hack into and gain access to IT systems and sensitive, personal information that these financial firms maintain. Among the most dangerous cyber threats is ransomware, malware that encrypts user or system files. The cyber actor then demands a ransom to restore the data through the use of a decryption key. These attacks have escalated since the pandemic began and continue to rise among financial institutions through remote desktop protocol (RDP) vulnerabilities. These attacks have occurred with varying levels of debilitating damage, from affecting various systems to complete shutdown, with the cyber actors generally threatening to release victim data publicly, in addition to leaving systems locked...
Good security protects against cyber threats. Regulatory compliance protects your business too. NFA Interpretive Notice 9070 sets the requirements and guidelines for an effective security program that meets both cyber security protection and compliance goals. Cyber Security or Compliance? Some executives are unsure if their cyber security program should be compliance driven or security focused. Being secure and in compliance are not the same thing, but NFA 9070’s requirements and guidelines help member firms achieve both. This article summarizes some key elements of NFA 9070. Written ISSP Member firms are required to have a written document that describes their Information Systems Security Program (ISSP) and designates the executive responsible for it. The ISSP and its implemented controls must be documented, and must be reviewed at least annually for effectiveness by someone with appropriate security expertise (internal or external). Security Actions and Safeguards After considering technology risks and their possible impact,...
Work from Home has moved the front-line in cyber attacks from office desks to kitchen tables, and NFA member firms are responsible to follow the security guidelines of NFA 9070 no matter where they do business. Based on insurance claims, ransomware attacks and false-invoice scams are among the most common cyber crimes in 2020, with phishing emails and fake website links the most frequent paths for malware. The following steps will help you stay secure: Be very suspicious of email or website links you don’t recognize, and even be cautious of those that look familiar - it is simple for hackers to impersonate people and sites. Be very careful with work emails asking for urgent payments, especially if they provide new payment instructions. If you can, call to confirm. Turn on 2 Factor Authentication whenever possible. This sends a confirmation email or text when you login to a system, which...
CFTC’s Coronavirus (COVID-19) Response By: Jua T. Tawah, Esq. As the Commodity Futures Trading Commission (CFTC or Commission) began taking action in response to the COVID-19 pandemic back in March, CFTC Chairman Heath Tarbert issued public remarks in which he laid out five key objectives of the agency’s pandemic response including:[1] Increasing monitoring and surveillance of derivatives markets and their participants; Leveraging the CFTC’s regulatory framework to promote orderly and liquid markets; Responding swiftly to changing conditions with practical, targeted relief; Communicating consistently and transparently with all stakeholders; and Maintaining the CFTC’s commitment to advancing the agency’s strategic goals. In his public remarks, Chairman Tarbert explained that the first objective was being met by the CFTC engaging with clearinghouses, exchanges and analyzing market activity; monitoring infrastructure essential to orderly trading; and surveying markets to detect and pursue potential misconduct.[2] Meanwhile, the second objective was being met by the Commission aggressively...
The Commodity Futures Trading Commission announced the finalization of the agency’s 2020-2024 Strategic Plan. The plan was unanimously approved by the Commission in May and was subject to a 30-day comment period that ended in June. “This is a bipartisan, consensus plan that can stand the test of time,” said CFTC Chairman Heath P. Tarbert. “I am proud of the hard work that went into developing the plan and the unanimous support it ultimately received. It will guide the last of the CFTC’s unfinished business to completion and better position the agency to tackle the unwritten future.” The strategic plan calls on the CFTC to focus its work on five strategic goals, each with clearly defined objectives: Strengthening the resilience and integrity of our derivatives markets while fostering their vibrancy; Regulating the derivatives markets to promote the interests of all Americans; Encouraging innovation and enhancing the regulatory experience for market...
