NIBA Journal

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

December 28, 2017

Introducing Broker Survey 2018 - Response Deadline Jan 31st

NIBA Members & Colleagues - In 1999, the first year I partnered with the CME Group to write The Complete IB Handbook, there were 1,564 firms registered with the NFA as Introducing Brokers (IBs) -- 404 as Independent (IIBs) and 1,160 as Guaranteed (GIBs). By 2012, while the industry was still reeling from the failures of MF Global and Peregrine Financial Group, and the IB community suffered terribly as a result, the NFA reported a total of 1,348 registered IBs -- 497 IIBs and 851 GIBs. Throughout industry ups and downs, IBs have continued to play an essential role, bringing both hedgers and speculators into the market. IBs have grown and evolved along with the needs of their customers and the globalization of the industry. Your IB provides unique, customized services to your clients alongside all the “basics” necessary to participate in the fast-moving, highly competitive marketplace. During November of...

NFA Additional Reporting Requirements - Virtual Currency Products

Additional reporting requirements for IBs that solicit or accept orders in virtual currency products A number of CFTC-regulated trading venues have launched or announced plans to offer derivatives on virtual currency products, including bitcoin. Given the volatility in the underlying virtual currency products, NFA is requiring each IB to immediately notify NFA if it solicits or accepts any orders in virtual currency derivatives. Until further notice, this obligation will apply on a continuous basis—any IB that does not currently offer virtual currency derivatives must notify NFA if it begins soliciting or accepting orders in these products. Effective immediately, an IB that solicits or accepts orders for one or more virtual currency derivatives must notify NFA by amending the firm-level section of its annual questionnaire, which is accessible by authorized users through the following link: https://www.nfa.futures.org/electronic-filing-systems/annual-questionnaire.html. The following question has been added to the firm-level section of the questionnaire: Does your...

Chairman's Letter - Dec 2017

“Elections belong to the people...” Abraham Lincoln, 1809-1865 Abraham Lincoln was the 16th President of the United States from 1861 until he was assassinated in 1865, and stated the above during the Lincoln-Douglas debates of 1858 when he was a candidate for U.S. Senate. The NFA has announced candidates for various positions on its board of directors. The nomination for the Guaranteed Introducing Broker (GIB) position is Scott Stewart, CEO of Stewart-Peterson Group in West Bend, WI. Scott served as the Chairman of the NFA IB Advisory Committee for several years, and is a past president of the NIBA. Scott would fill the position held since 1999 by Paul Georgy, who announced his retirement from the NFA board earlier this fall. Doug Bry, Welton Investment Partners and Brendan Kalb, AQR Capital Management are nominated in the CTA/CPO category where there are two positions open. Both men have significant experience in...

NIBA Newsletter Format

This year the NIBA has rolled out a number of exciting new changes including our 25th Anniversary "free" membership offer. The NIBAs newsletter continues to be a consistent and reliable source of industry information published twice monthly and covering topics related to education, compliance and innovation. Beginning in December the newsletter will only be accessible to registered members of the NIBA. You will notice the new format in your inbox this month. If you have not done so already be sure to claim your free membership which includes full access to the newsletter content.

Bitcoin: Will the Rally Last?

Report by Erik Norland, Senior Economist at CME Group This paper examines why bitcoin is so volatile; its supply and demand drivers, and how the cryptocurrency compares to commodities. What is most striking about the economics of bitcoin is the certainty of its supply and the vagaries of demand. The rate at which bitcoin is mined has been highly predictable and unlike almost any other asset – currencies or commodities – its ultimate supply is a known quantity, fixed well in advance. There will never be more than 21 million bitcoins. This feature makes supply almost perfectly inelastic. No matter how high prices go, miners will not produce more than 21 million coins. Moreover, price increases won’t necessarily incentivize a more rapid mining of bitcoin. Even if they did, it would only influence miners to create more bitcoin today at the expense of creating less in the future since the...

NIBA Advisory Group Meeting Report

The Advisory Group (AG) of the NIBA met Wednesday, November 29 at the Union League Club in Chicago. This group of industry experts meets once each year to evaluate NIBA’s programs and projects, and suggest ideas for making the Association more effective in our efforts to educate our members and represent their views on all issues which have an effect on our business lives. 2018 group members include: Rob DeMuria, Compliance Supervisors, Inc. Paul Georgy, Allendale, Inc. Mark Haraburda, Barchart Kelly Hartman, CME Group Dr. Carl Luft, DePaul University John Nelson, Applied Research John Roe, BTR Trading Mark Ruddy, Ruddy Gregory Law Firm Skip Sheen, 16Wells Mark Shore, Shore Capital Management Ginger Szala, Ginger Szala Ink This year, four topics generated the most discussion - (i) the introduction of bitcoin futures as part of an IB/CTA’s product offerings; (ii) updates to the NFA’s Enhanced Supervision Rule; (iii) targeted marketing and...

Housekeeping, Reminders & Updates - November 2017

Written by: Mark E. Ruddy, Esq. Maria Fielding The National Futures Association (“NFA”) Requests Nominations for the NFA’s Board of Directors (“Board”) The NFA is reaching out to both NFA members and non-members for nominations to fill impending vacancies of Public Representatives serving on its Board. There are currently five Public Representatives whose terms will expire at the Board’s Annual Meeting in February of 2018. Nominees for the position must have no material relationship with the NFA, as the position is designed to bring a needed impartial, non-member perspective to issues. A Public Representative nominee should, however, be knowledgeable of both the markets and who is regulated by the NFA. The position consists of a two-year term and individuals are elected by a Board majority vote. The NFA asks that all nominations be submitted by January 10, 2018 via mail, email, or fax. The NFA issued Notice to Members I-17-23,...

NIBA Cryptocurrency Trading Panel

Bitcoin and cryptocurrency have become the hot topic in trading circles as the CME prepares to launch its Bitcoin futures contract. NIBA featured a cryptocurrency trading panel at its Chicago conference this past September. If you were not in attendance check out the video link below to hear thoughts and predictions on crypto trading and block chain from traders and experts - and yes the call in September was bitcoin is going higher. Featuring Brian Kelly of CNBCs Fast Money and CEO of BKCM a digital asset hedge fund, Chris Tanger - veteran crypto trader, Software Solutions Architect and Entrepreneur, Samuel Kramer - Partner at Baker & McKenzie and block chain expert and Moderated by Matthew Kluchenek - Partner at Baker & McKenzie and head of the firm's Global Derivatives and Hedge Fund practice. https://www.youtube.com/watch?v=tcJZmjfdJ9k

Relationship-Based Trading in Agricultural Products

Effective January 8 pending regulatory approval, CME Group will expand relationship-based trading, in the form of block trades and certain types of crosses on Globex, to the full suite of CME and CBOT agricultural products. With relationship-based trading, participants can enter into conversations with other market participants that include discussion of the price, size and direction of an order that may lead to one of two very distinct types of transactions: crossing on CME Globex and block trades. Learn More

By NIBARead article

November 29, 2017

2 min read

Ask NFA - November 2017

As your industry advocate, the NIBA provides many services which help your business stay in compliance with NFA regulations. “Ask the NFA,” is the way you can ask questions about those regulations and compliance requirements without having to call NFA directly. Just email us at nfacomments@theniba.com and we will get the answers for you. Please keep in mind the purpose of this contact is to keep the lines of communication between the NFA and NIBA members. This month’s questions were selected from those submitted by NIBA members. The answers were supplied by NFA staff. Q: A colleague recently forwarded an NFA Notice to Members to me. How can I sign up to receive these communications? A: To sign up for NFA's email communications, scroll to the bottom of any page on NFA's website (www.nfa.futures.org), enter your email address, and click subscribe. You'll be directed to a subscriptions page. On this...

By NIBARead article

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