Dear NIBA Members,
It is not my intention to be the bearer of bad news, but managing an IB in 2013 will have even more challenges. The impact of Dodd-Frank is trickling down. It will impact us as the CFTC continues to develop new rules, and the NFA must assure they are implemented.
A few rules we should all be aware of that will affect how we do business includes the “taping rule” which takes effect on December 21, 2013. This change will impact larger IBs which generate more than $5 million in revenue over 3 years. Another change which affects all of us is the amount of time in which margins calls have to be met before the FCM will receive a capital charge. The old fashion way of sending checks via US Mail may not be quick enough to meet FCM requirements. It may be beneficial to prepare your clients for the need to meet margin calls quickly, especially in volatile markets.
In addition, technology changes will have both positive and negative consequences for IBs. Regulators will continue to address issues ranging from high frequency traders to twitter accounts. Finally and on a positive note, the NFA has added financial information about your Futures Clearing Merchant (FCM) to its website
Wishing you success in 2013,
Paul Georgy, President Allendale, Inc.
Email: pgeorgy@allendale-inc.com