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NIBA Journal

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

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Member Announcements
1 min read

FinCEN Issues an Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies

On December 4, 2013, the Financial Crimes Enforcement Network (FinCEN) issued an advisory announcing that the Financial Action Task Force (FATF) had updated its list of jurisdictions with strategic AML/CFT deficiencies. NFA Member FCMs and IBs should review this Advisory to ensure that their AML programs have the most current information on FATF identified jurisdictions with AML/CFT deficiencies and revise their AML programs accordingly. A copy of the Advisory is available through FinCEN's website at: http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-A008.html

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Member Announcements
1 min read

Class Action Lawsuit Filed Against U.S. Bank on Behalf of IBs that Introduced Business to PFG

On November 11, 2013, a class action law suit was filed against U.S. Bank, one of the largest American banks, on behalf of introducing brokers that did business with PFG Best. The action, filed in the Northern District of Illinois and docketed as Fintec Group, Inc. v. U.S. Bank, N.A., aims to recover for IB losses resulting from PFG’s collapse, including unpaid commissions, security deposits and potentially other amounts. One of the attorneys representing the lead plaintiff in that suit, Larry Landsman, would like to communicate with any IBs impacted by the PFG bankruptcy to deepen his understanding of the circumstances and impact PFG's collapse had on the IBs. Any NIBA members or other such IBs interested in speaking with Larry are encouraged to contact him by e-mail at larry@block-landsman.com or by phone at 312-251-1144.

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Member Announcements
3 min read

A Letter from George Enloe of Amarillo Brokerage Company on CME Market Data Fee Increase

It was very disappointing to hear of the massive price increases for CME data feed. There are eight of us in our office and upon analysis we believe that if we keep our current 7 quote systems, 7 electronic order platforms and 3 spreaders the extra yearly cost will be $6500 per employee! There is no telling how much it will cost many of our customers (who will likely ask us for lower rates as a result) as well as RCG and other FCM?s (who will likely want to charge us more to recoup some of their costs). As with burdensome taxation these increases make it harder for us to operate efficiently and in turn, grow our business. As a regulator the CME has encouraged us to have redundant systems in case of a simple malfunction or a natural disaster and now there seems to be no limit on how...

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Member Announcements
1 min read

A Letter from Alex Breitinger of Paragon Investments on CME Market Data Fee Increase

As a director of an IB, my greatest concern is that our clients get good value for their money. With transaction fees increasing by as much as 20%, I would expect that the CME would provide a similar increase in value for the customers. I fear that this is simply going to be an increased source of revenue without a corresponding increase in service. To that end, I would ask the CME to justify these increases to our (and the CME's) customers. Without such justification, I would expect that customers will push back against the fee increases, which will have to come from FCM's & IB's pockets, hurting their ability to grow the customer base that is the primary source of the CME's revenue. On the subject of market data fees, I am even more concerned about how limiting access to market data could severely hamper CME & brokerage trading...

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Member Announcements
8 min read

CME Fee Increase Concerns

We have little doubt the proposed fee increases, particularly for market data access, will have a profoundly negative impact on the number of industry service personal (IBs and Aps) as well as retail speculators. Consequently, we suspect the changes could trigger a potential drop in trading volume in our particular book of business by 20% to 30%. Additionally, small operations such as ourselves could be driven out of business at the hands of decreased volume and substantially higher fixed costs in the form of data fees. Here are some comments and concerns we would like to express: Data fees per device is unreasonable, and dramatically impairs the industry In a post PFG and MF Global world, IBs have shifted toward independence. We have spent the last 2 years scrambling to diversify our business among various FCMs. Accordingly, that involves the simultaneous use of multiple platforms. Should the new CME fee...

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Member Announcements
3 min read

4 Obama Care Changes that Make Defined Contribution Irresistible

By Rusty von Sternberg Program Manager for The NIBA Benefits PPACA Certified & Registered for the Federal Exchanges ObamaCare. Love it or hate it, one thing is true... the landscape of employer-sponsored health insurance is changing. Many of the Affordable Care Act ("ObamaCare") provisions strongly favor the individual health insurance market, making “Defined Contribution” the ideal health insurance solution for most (if not all) US employers. To understand, there are four key ObamaCare changes happening January 1, 2014 that make the shift from defined benefits (group health insurance) to pure defined contribution simply... irresistible. Guaranteed-Issue Individual Health Plans Beginning January 1, 2014, insurance carriers must accept all applicants for individual health plans regardless of health status. Individual policies will become guaranteed issue, and eliminate the non-economic (i.e. moral) factors from an employer’s decision-making process. In other words, employers feel assured that sick employees will be able to get affordable individual...

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Member Announcements
3 min read

How to Ensure Transparency in Alternative Investments—White Paper Published by Gate 39 Media

“Providing Transparency in Alternative Investments: The Importance of the Advisor-Client Relationship”, is a new white paper that discusses investment transparency, the hot topic in the world of managed futures and hedge funds. Transparency builds stronger interactions and understanding between advisors and clients in the long-term pursuit of investment returns. More than just providing a performance statement, transparency starts with the relationship and sets appropriate expectations for both parties. Written by Mark Shore, Adjunct Professor of Managed Futures at DePaul University and Research Principal of Shore Capital Management, this important white paper comes at a time of negative press coverage on the performance of and transparency in alternative investments. One opinion is that managed futures and hedge funds require additional transparency, when in fact they may have greater transparency then initially perceived when properly understood. The goal of investment transparency is to eliminate the possibility and potential for pretense or misunderstanding...

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Member Announcements
1 min read

Annual Membership Campaign - NOW

Earlier this month, we kicked off the NIBA Annual Membership Campaign. All current members have been mailed a 2014 renewal reminder and can simply return the form with a renewal check. If you prefer to pay by credit card or if you need to update your firm information in order to bring your online directory listing current, please go online to the membership page on the NIBA website. To join for the first time, please use the online form. NIBA membership continues to be a real value - your dues include free attendance to membership meeting throughout the year and a listing in the online Broker Directory. Introducing Brokers and Commodity Traders Advisors can join for $150. Individual APs are invited to become members for $75. Service Providers and FCMs are encouraged to call us before filling out the membership forms. The NIBA is your professional association for education and...

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Member Announcements
3 min read

NIBA Chairman Melinda Schramm's November Letter to Members

Dear Members- Well, get ready for some good news and some not so good news. Good news #1. MF Global commodity customers are poised to get 100% back. On November 4, Trustee Giddens received approval from the MFG bankruptcy court for a plan that will repay customers in full. Neal Stevens’ article helps put this in perspective. Good news #2. The CFTC received the go-ahead from a federal court for it’s lawsuit against U.S. Bank N.A, the bank which held Peregrine Financial Group’s segregated funds. That suit alleges the bank treated the account as if it were Peregrine’s own. Now the not so great news #1. The new Recording Requirement compliance deadline looms: December 21, 2013, unless CFTC postpones or extends the time to comply. Jeff Kopiwoda has written a comprehensive update to his September Membership Meeting presentation. Not so good news #2. The CFTC approved a rule which will...

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Member Announcements
2 min read

NIBA September Fall Membership Conference

544x376 Normal 0 false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} Dear Members, “The AML session was the best I’ve ever attended...” “Loved the CTA Due Diligence session...” “Legal Update is always my favorite part of the NIBA Conference. I get so much information I don’t get anywhere else...” These are the top three comments heard from attendees at our September Fall Membership Conference. Several ‘old’ members told me this meeting was the best in last few years because: (i) every session provided information CFTC registrants/NFA members need in order to keep up with the numerous changes taking place in the industry; (ii) the presentations explained how to put the information into action; and, (iii) the full-day event meant there were more sessions to choose from. I also met...

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