NIBA Journal

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

April 26, 2018

NIBA in Washington DC

Your NIBA representatives will be travelling to Washington D.C. next month to meet with our industry's top regulators to discuss issues that are important to our membership. If you have a topic or concern you would like to discuss with NIBA please reach out to us at membership@theniba.com. Part of the NIBAs mission is to be a voice to the brokerage and trading communities and to raise awareness on issues that directly affect the way you conduct business. Look for a report on our trip in an upcoming compliance edition of NIBAs newsletter.

Save the Date - DePaul Summer 2018

Mark your calendar now for the 5th Annual NIBA/DePaul University Joint Symposium on August 8th at DePaul University's Downtown Chicago Campus. Registration is now open so be sure to secure your spot now. REGISTER HERE  

NIBA NYC 2018

NIBA at NYAC Over 360 individuals registered for last week's NIBA Event at the New York Athletic Club, making the biggest meeting NIBA has ever presented in New York. Thank you to all our sponsors and expert speakers who provided a program that educated and informed, alongside a wonderful reception where colleagues networked and old friends met to catch up. Thank you also to Traders Fulcrum who directly reached out to industry professionals in the New York area to include them in the event. The University of Chicago and Columbia University attended NIBA's New York meeting for the first time. These universities, along with several others, will be in the Quant Corner again at our September 13 Annual Membership meeting in Chicago. Program sessions from this NYC meeting will be posted on the NIBA website in the next few weeks. For follow-up, questions or suggestions for next year's program, contact...

What is SOFR?

New Whitepaper: What is SOFR? This note offers an introduction to the Secured Overnight Financing Rate (SOFR) and CME One-Month and Three-Month SOFR futures. It compares the underlying interest rate exposures for SOFR futures versus those for other short-term interest rate futures, both to indicate normal spread relationships and to highlight characteristics that futures users should bear in mind when hedging or spreading. Read Paper

NYC Compliance Session Preview

The second session of this year’s NYC meeting will concentrate on three areas of compliance which are most often queried by our members. The session will begin at 2:35pm, and will consist of three 15-minute presentations on the following issues: (i) Recording - I need to record that? Presented by Rob DeMuria, President, Compliance Supervisors Intl., Inc. (CSI). CSI, established in 1994, provides full compliance and financial services, as well as online training courses in ethics, AML and Cybersecurity to NFA Members. CSI is headquartered in New Jersey, and maintains an office in Chicago. rdemuria@compliancesupervisors.com Rob will focus on the extreme challenges our community faces with supervising, recording and storing various forms of communications/solicitations between brokers and leads/customers. He’ll offer some reasonable compliance solutions for small to mid-size firms. (ii) Cybersecurity - What you need to know about NFA Interpretive Notice 9070. Presented by Arthur Kenigstain, Manager, New York Compliance...

Annual Thank You Reception

A Great Big Thank You! Over 35 NIBA sponsors and supporters attended our annual Thank You Reception held March 3 at the Union League Club, Chicago. FCMs, exchanges and service provider members got together with NIBA board members to catch up on sponsorship opportunities and preview association events currently scheduled for 2018. If you would like to become a FCM or Exchange member or join as an NIBA Annual Sponsorship, contact Mike Burke, mikeb@highgroundtrading.com. Mike can answer questions about your current membership status, too. If you would like to become a Service Provider member or have questions about your current membership, contact Steve Petillo, spetillo@straitsfinancial.com.

Chairman's Letter - April 2018

The Romans gave this month the Latin name Aprilis. While scholars debate the exact derivation of the name, traditionalists believe it is most commonly refers to the “season when trees and flowers begin to open.” In Finnish, April is huhtikuu, the time for burning and clearing farmland. In Slovene, recorded as far back as 1466, mali traven is the month when plants start growing. To “open” April, the CFTC has posted a new podcast on their website www.cftc.gov presented by Professor Scott Irwin, an expert in the importance of speculation and its effect on the markets. They also started out the month by issuing an order in a spoofing case originated in the CME wheat market which resulted in a $150,000 fine. NFA announced amendments to customer due diligence requirements which will become effective May 11, 2018. The rule will require the beneficial owners of legal entity customers be identified,...

Quant Essentials Panelists

Quantitative Research and Trading The content we provide is global, and covers all the financial data you need for your quantitative research to take an idea from idea generation, to back-testing and analysis, and then on to production. Beyond economic and financial data, however, we give you access to breaking news, environmental, social and governance performance, and corporate guidance. Our own team of quantitative analysts creates extra value with weighted analyst consensus estimates, predictive analyst revision and earnings quality models, and long-term earnings projections that drive company valuations. Market analysis Data management solutions Predictive modeling Machine Readable News and MarketPsych Indices Backtest systematic investment models Historical tick data Investment alpha   Austin Burkett, Global Head of Quant and Feeds at Thomson Reuters At BlueMountain, we seek to build an enduring partnership that consistently meets the expectations of our investors. We are a diversified alternative asset manager and use an interdisciplinary...

Quant Corner Participants

Program Name: University of Chicago Financial Mathematics Program Program Description: The M.S. in Financial Mathematics at The University of Chicago is a 15 month program beginning each year in the autumn, with students graduating the following December. Classes are taught by leading academic researchers and industry professionals, and the curriculum includes courses in Algorithmic Trading, Options Pricing, Machine Learning, Artificial Intelligence, Risk Management, and Statistical Inference. Students gain real-world experience throughout the academic year by participating in Project Labs – collaborative quantitative research projects with firms throughout the world – and by completing summer internships. Stop by during the conference to learn more about our program and how we can connect you with students prepared to make a significant impact in the quant finance industry. Key Contact: Alma Ceballos (almaceballos@uchicago.edu) and Emily Backe (ebacke@uchicago.edu) Program Name: Master of Science in Financial Economics Program Description: The Master of Science in Financial...

By NIBARead article

March 29, 2018

5 min read

AML Program Changes – Deadline Looms

Have you updated your AML Program to comply with the FinCEN changes going into effect on May 11, 2018? Most Futures Commission Merchants (“FCMs”) have implemented changes to their Anti-Money Laundering Programs (“AML Programs”) in accordance with the Financial Crimes Enforcement Network’s (FinCEN) final rules issued on July 11, 2016. These FinCEN final rules must be incorporated into all FCM and Introducing Broker (“IB”) AML Programs by May 11, 2018. Introducing Brokers will need to fulfill this obligation within their own AML Programs even if they rely on their FCMs for certain aspects of the program. Specifically, these firms will need to alter two main components of their customer due diligence requirements: the identification of beneficial owners of legal entity customers and ongoing risk-based customer due diligence. However, in addressing these two main components, FCMs and IBs may need to amend other portions of their AML Program. All AML Programs...

By NIBARead article

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