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NIBA Journal

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

NFA Offers Guidance on CFTC's Final Forex Regulations
4 min read

NFA Offers Guidance on CFTC's Final Forex Regulations

Notice to Members I-10-21 October 13, 2010 NFA offers guidance on CFTC's final forex regulations The Commodity Futures Trading Commission's (CFTC) final Forex regulations are effective on October 18, 2010. NFA staff has received a number of inquiries from Members seeking further guidance and clarification on certain requirements. Based on further consultation with CFTC staff on Friday, October 8th, this Notice provides additional guidance on the following areas: Risk Disclosure Statement Required by CFTC Regulation 5.5 CFTC Regulation 5.5 prohibits FCMs, RFEDs, and in the case of an introduced account, IBs from opening a retail Forex account until the FCM, RFED or IB has provided the customer with the required disclosure statement, along with the most recent quarterly customer account performance information, and obtained a signed acknowledgement of receipt of the disclosure document from the customer. Firms are not required to provide this disclosure statement to, or obtain the disclosure...

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LEGAL CORNER: Do You Still Know-Your-Customers? You Better.
2 min read

LEGAL CORNER: Do You Still Know-Your-Customers? You Better.

On January 3, 2011, amendments will become effective to NFA Compliance Rule 2-30, commonly referred to as the Know-Your-Customer Rule. (See also NFA website and Notice to Members I -10-15 dated July 28, 2010). Hopefully, everyone is well versed with the current rule which requires NFA Members to obtain information about their customers and provide appropriate risk disclosures. Note, however, that the forthcoming amendments will broaden your responsibilities. The changes to the Rule can be summarized as follows: The Rule will soon apply not just to individual customers, but ALL non-ECP customers; FCM Members must annually request that active customers notify them of any material changes to the information previously provided by the customer. (Like a negative consent letter, if the customer does not respond, the information on file is deemed verified. If, though, the customer provides material changes to the information, any FCM, IB or CTA Member that solicits/communicates...

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NIBA Chairman Melinda Schramm to Participate in CFTC Proposed Account Ownership and Control Report
Member Announcements
1 min read

NIBA Chairman Melinda Schramm to Participate in CFTC Proposed Account Ownership and Control Report

Melinda Schramm, Chairman of the Board and found of the NIBA has been invited to participate in a CFTC public meeting on September 16 in Washington, DC.  The purpose of this meeting isto discuss the proposed Account Ownership and Control Report. This proposed regulation identifies IBs and CTAs as business entities under the definitions in the proposals which may have increased responsibilities for identifying the real owners/controls of trading accounts. Details of this proposal can be found in the Federal Register at pg. 41775. If you would like to comment, please email Melinda Schramm at melinda@futuresrep.com. A summary of the meeting will appear in the NIBA Newsletter and at the NIBA Meeting, November 2 in Chicago.

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Introducing Fund Dynamics: A Fully Customized Accounting and Administration Company
Member Announcements
3 min read

Introducing Fund Dynamics: A Fully Customized Accounting and Administration Company

CTA and IB's – Where is your Business going to be One, Two, Five Years from Now? During my last 20 years in the commodities business, I have seen many changes. Some of these brought success and others, disaster. From the early days of facilitating the original Bermuda hedge funds, South American Crushers, domestic Soy product users, to today, the most important thing has remained, knowing who you are doing business with, and understanding whose best interest they put first. The Price Futures Group is unique in that they understand that there are three vital components to a simple and successful business: First: it is ALWAYS the fault of the highest levels of management if a business is failing. When it comes down to it, the people at the top make all of the decisions, and while many directors, managers, owners, or operators blame their employee’s for their failures, it...

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The Medium Defines the Message: Social Media and Compliance Considerations
6 min read

The Medium Defines the Message: Social Media and Compliance Considerations

Everyone who has tried their hand at marketing has obsessed over the content of an ad or promo piece, and we have all struggled with the difficulty of reaching and engaging our target audience. I won’t diminish the importance of the message, but to reach certain audiences, the medium of communication may be as important as the message you are sending. In 1964, Marshall McLuhan declared that” the medium was the message”. He couldn’t possibly foresee Twitter or even the internet, but his words are truly prophetic. Media has transcended the mere delivery of information and become interactive, even social. Web sites and email are still vital technologies, however utilizing social media to inform, interact, and engage has become nearly as important as your website. You Tube video sharing can be a powerful visual tool. If you are not LinkedIn, you are missing out on an easy way to network...

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Financial Services Law Conference: Current Issues Around Town in Futures & Derivatives
Member Announcements
1 min read

Financial Services Law Conference: Current Issues Around Town in Futures & Derivatives

Financial Services Law Conference: Current Issues Around Town in Futures & Derivatives A one day program covering a variety of current compliance issues Dear Friends and Colleagues, In this era of regulatory reforms and aggressive enforcement, it is imperative that we all stay current on the latest trends in futures compliance. The consequences of being out of date can be catastrophic. On October 22, 2010, Chicago Kent College of Law will present Current Issues Around Town in Futures & Derivatives, a one day program covering a variety of current compliance issues. This program is the right solution, at the right time, for the right price. I encourage you to mark your calendar and to attend this important conference. In addition to the valuable content and 6 hours of CLE, there will be a Cocktail and Networking Reception immediately following the program. Click here for Financial Services Law Conference: Current Issues...

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The Benefits and Risks of Utilizing Social Networking Sites In the Workplace
Marketing
7 min read

The Benefits and Risks of Utilizing Social Networking Sites In the Workplace

Social Networking is one hot topic these days. Globally, interest and participation in social media is growing at phenomenal rates. While people increasingly understand how to use Social Networking tools in their personal lives, businesses are experiencing uncertainty regarding the implications of using these tools in the workplace. One thing is for certain: the impact of online Social Networking is far-reaching and presents a range of challenges and opportunities for most organizations. Given the explosive growth of Social Networking sites, such as Facebook, LinkedIn, Twitter, YouTube and others, now is the time for companies to establish policies regarding their use in the workplace. Social Networking holds great promise for improving corporate communications and addressing business opportunities. Businesses can benefit in a myriapd of ways from the use of Social Networking websites. For example, companies can build awareness of their organizations, become more visible to prospective clients, maintain contacts with business...

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Futures Magazine to host 7th I-Trade Show
Member Announcements
3 min read

Futures Magazine to host 7th I-Trade Show

For Immediate Release Futures Magazine to host 7th I-Trade Show CHICAGO, IL (June 17, 2010) – Futures Magazine, a Summit Business Media publication, will be hosting its seventh edition of the Futures I-Trade Show this June 22nd and 23rd. Spotlighting both time tested and innovative approaches to trading, the I-Trade Show is for all traders of futures, options, forex and stocks and offers attendees the benefits of a physical conference and tradeshow from the comfort of their desk. “The I-Trade Show offers cutting-edge opportunities to showcase the newest trading tools, demos, products, ideas, and success stories,” Group Editorial Director Ginger Szala remarks. “The trading industry is one that is always on the move, and many traders do not have the option to leave their desks. Rather than have traders come to us, we bring the markets to them, providing the opportunity to learn new strategies and insights without paying for...

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Secret to Success: Integrity - NIBA Chairman's Letter June 2010
NIBA Briefings
3 min read

Secret to Success: Integrity - NIBA Chairman's Letter June 2010

Integrity: (i) Consistency of actions, values, methods, measures, principles, expectations and outcomes; (ii) The quality of having an intuitive sense of honesty and truthfulness… Source: Wikipedia, 2010 At the recent NIBA and CTA EXPO events in New York, I met successful IBs and CTAs from all over the country. I sat in on at least a dozen panel discussions and expert presentations. And I re-connected with scores of old friends, many of whom I see regularly at NIBA meetings. When I returned home to Chicago and had a chance to think about all those conversations, it struck me that each one of the people I talked to or heard from in a session was unique, enthusiastic and successful. I started to wonder if there could be one characteristic, one trait these people had in common. Was there one thing each of them possessed or was doing that that led to...

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Old Rules - New Interpretations: Speculative Position Limits
6 min read

Old Rules - New Interpretations: Speculative Position Limits

Due to the rapid rise and rapid fall of the crude oil market in 2008, the CFTC has recently proposed a new rule on speculative position limits for the energy markets. Numerous comments have been sent to the Commission and the debate is ongoing over the economic, legal and philosophical merits of imposing position limits on these very liquid markets. It’s all very interesting and important, but rather than debating the merits of these proposed rules, in this article, I would like to demonstrate for you that the current rules on speculative position limits can have unusual and surprising consequences when the regulators apply their own interpretation to the application of these rules. Speculative position limits have been part of the futures regulatory environment since 1938 and they are incorporated into the Commodity Futures Modernization Act of 2000. The stated purpose of position limits is to curb excessive speculation and...

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