NIBA - Celebrating 35 Years

NIBA Journal

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

CFTC Grants NIBA’s No-Action Request regarding certain FASB Changes
Member Announcements
1 min read

CFTC Grants NIBA’s No-Action Request regarding certain FASB Changes

On August 13, the CFTC granted no-action and issued a no-action letter regarding certain FASB changes set to take effect as early as December 15, 2018 for certain IIBs, FCMs and other CFTC-registrants that are broker-dealers. The Lease Accounting Update as proposed would have resulted in a decrease in regulatory capital as compared to the current accounting treatment. NIBA submitted a request for no-action to the CFTC on this item in March. SIFMA and the FIA also submitted documentation. In support of our request, we noted that the Lease Accounting Update is purely a matter of accounting that does not alter the existing economic or legal characteristics of an operating lease and, further, that the impact on the capital computation of CFTC registrants is an unintended consequence of the manner in which FASB’s and CFTC’s regulations interact. Both our request and the CFTC no-action letter are posted on the NIBA...

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IB Handbook
Member Announcements
1 min read

IB Handbook

CME Group has posted the latest edition of The Complete IB Handbook on its website at cmegroup.com/ibhandbook, written by Melinda Schramm, Founder & Chairman of the NIBA. Melinda has written the definitive guide on how to become an Introducing Broker and the state of the IB community today. If you want to open your own shop, if you need an attorney or accountant or if you’re preparing for your first audit -- this is the book for you. Based, in large part, on the responses received as a result of the survey of the IB community conducted by Melinda and CME Group, the guide includes registration and audit information, business planning, a service provider directory in addition to facts about the costs of operating an IB business. Download a copy of The Complete IB Handbook HERE or contact Barb Schmidt-Bailey barbara.schmidt-bailey@cmegroup.com for a hardcopy. For questions about the contents of...

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Chairman's Letter - August 2018
Member Announcements
2 min read

Chairman's Letter - August 2018

In 8 BC, the eighth month of the year was named for Augustus Caesar, emperor of Rome, in honor of his several great battle triumphs, including the conquest of Egypt. August is “Happiness Happens Month,” in the U.S., a month-long celebration of sharing happy news. For a good start to NIBA members’ “happy month,” CFTC has notified NIBA it has issued a no-action letter in response to our request submitted in March with regard to the changing FASB rules. Those rules would have had substantial effect on IIBs and FCMs. NIBA requested relief in behalf of its IB members, and met personally with the CFTC division of swaps and intermediaries to discuss our request in full. On August 12, we were notified of CFTC’s grant of no-action. CFTC’s full letter is posted on NIBA’s website, and will post on CFTC’s in the next week or two. Pls contact your accountant...

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CME Advisory Notice
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CME Advisory Notice

CME Group MRAN 536: Documentation of Customer Orders and Submission of Suspense Accounts on CME Globex Effective on October 1, 2018, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA1605-5R from August 19, 2016. This Advisory Notice sets forth the circumstances under which a suspense account may be submitted on orders entered into CME Globex (“Globex”) and the requirements attendant to proper documentation of such orders. For purposes of this Advisory Notice, a suspense account means a temporary holding account that is submitted at the time of order entry into Globex but prior to the allocation of the executions to the specific accounts on a carrying Clearing Member Firm’s books. With the exception of the section concerning bunched Request for Cross (“RFC”) orders, which is currently in effect, the remainder of this Advisory Notice will become effective...

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July Housekeeping, Reminders & Updates
3 min read

July Housekeeping, Reminders & Updates

Written by: Mark E. Ruddy, Esq. Maria Fielding National Futures Association (“NFA”) Proposes Virtual Currency Activities Disclosure Requirements NFA submitted an Interpretive Notice to the Commodity Futures Trading Commission (“CFTC”) regarding virtual currency disclosure requirements. Due to the unique nature of virtual currency activities, NFA has determined that customers may not fully understand the nature of and potential risks involved in virtual currency activities. In the notice, NFA also reminds Members of Compliance Rule 2-29, which prohibits the use of any promotional material that is misleading or deceptive; something Members should also consider when drafting virtual currency disclosure materials. Details on the specific proposed disclosure requirements can be found in the Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities Interpretive Notice. CFTC Suggests Security Futures Products (“SFPs”) Rule Update On July 24, 2018, the CFTC released an announcement proposing the update of an outdated 2001 security futures rule...

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Why Small Cap Indexes Are An Economic Barometer
CME Updates
2 min read

Why Small Cap Indexes Are An Economic Barometer

Remember the Trump bump? The post- 2016 election climb in U.S. equity indexes was signaled first in small cap indexes. The Russell 2000 index of small caps climbed 14.3 percent following the election, its highest post-election climb since its inception in 1979. Small caps represent a snapshot of the U.S. economy since most of the stocks in indexes like the Russell 2000 are domestic. That means they are often the first indexes to respond when major market moving events like a U.S. election occur. “Those small cap U.S. equity stocks have less exposure outside the United States so they’re a good barometer for U.S. economic activity,” Ron Bundy, CEO Benchmarks-North America for FTSE Russell told us in an interview. The Role of the Exchange This barometer role is one reason the Russell’s move to CME Group made waves when it transitioned to the exchange in July 2017. Since then, E-mini...

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