NIBA Journal

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

March 17, 2016

Cybersecurity Questionnaire

For the last several months Cybersecurity has been on everyone's radar. Now that the implementation deadline has passed, many NIBA IBs have put something basic in place. For those NIBA members who may still be looking to fine tune their program, policy and/or procedures, we’d like to offer a potential solution. Courtesy of Turnkey Trading Partners, the NIBA has obtained the following Cybersecurity questionnaire for you. Turnkey has been using this document to best determine how to implement Cybersecurity policies for nearly 100 CFTC registrants since the beginning of this year. If you have any questions or concerns after reviewing this questionnaire, it’s likely you will need additional assistance with your program. NIBA members with any doubts about their respective Cybersecurity programs would be well advised to contact a professional compliance provider for additional assistance.

Housekeeping, Reminders and Updates

Financial Crimes Enforcement Network The Financial Action Task Force (“FATF”) updated its list of jurisdictions with strategic anti-money laundering (“AML”) and counter-terrorist financing (“CFT”) deficiencies. In response, the Financial Crimes Enforcement Network (“FinCEN”) issued an advisory in January announcing the updates to the list of jurisdictions identified as having strategic deficiencies in their AML/CFT regimes. Countries with inadequate AML/CFT programs, as identified by FATF, are categorized as: (i) jurisdictions that are subject to FATF’s call for countermeasures or are subject to enhanced due diligence (“EDD”) due to their AML/CFT deficiencies; and (ii) jurisdictions identified by FATF to have AML/CFT deficiencies. Countries subject to EDD or countermeasures are identified on the FATF Public Statement and the list of countries with strategic AML/CFT deficiencies is available in FATF’s Improving Global AML/CFTC Compliance; On-Going Process. FinCEN’s advisory, FIN-2016-A0001, urges financial institutions to review the changes to the list of jurisdictions to ensure that...

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February 25, 2016

3 min read

Ask the NFA

1. During the course of an NFA audit, when an item is noted in the audit report, how is that viewed internally by NFA? This depends on a number of factors. The purpose of examinations is to review compliance with NFA rules and CFTC regulations. NFA's philosophy has always been to provide education and direction to its members to ensure they understand their regulatory obligations. When instances of non-compliance are noted, firms are expected to come into compliance and demonstrate how it will be achieved. There are several factors NFA considers when evaluating examination findings: number of violations, repeat nature of violations, time period of non-compliance, lack of corrective action, etc. 2. I have specific questions on NFA's new cybersecurity policies we need to implement, is there a specific person or department at NFA that can give detailed answers to questions on that subject? In light of the almost daily...

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February 25, 2016

6 min read

Fix Your Users!

The cyber security industry has gotten great at boundary defense. “Firewalls, Firewalls, Firewalls” - that’s all you heard for a long time emanating from the boardroom. Well the times they have changed. Now there are so many regulatory bodies and frameworks to be in compliance with, it is a struggle to keep every mandate straight. Questions like: ”Is your networking properly segmented?”, “How often are passwords changed?”, “what is your password complexity?”, “Is anyone checking those firewall logs?” Meanwhile the bad guys are waiting for your cyber defenses to fail, or worse, finding their own way in. The way they are finding in is through your most valuable resource: your employees. And what common element do all those employees have? ACCESS. They have access to your valuable data associated with your business practices and your clients. This valuable data can be quickly monetized on the seedy side of the Internet:...

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February 24, 2016

7 min read

Prepare for 2016; NFA Examination Focus

The National Futures Association (“NFA”) Rules and Commodity Futures Trading Commission (“CFTC”) regulations that govern the futures, forex, and swap trading industry are subject to continuous interpretation, amendment, and update. Staying abreast of these changes is a critical component of maintaining regulatory and operational compliance for your next examination. NFA regularly emails member firms to advise them of pertinent rule changes, amendments, and interpretive notices. These Notices to Members are archived on the NFA website and are an excellent resource for Introducing Brokers (“IB”) and Commodity Trading Advisors (“CTA”) to stay up to date with the most recent industrywide regulation and rule adjustments. While NFA does it’s best to provide firm’s notice of changes, there are subtle nuances to the rules and expectations placed on regulated entities that may not necessarily be conveyed in these publications. Oftentimes, NFA Members are caught unawares or ill prepared in an NFA examination as...

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NFA announces Dashboard webinar on February 25

February 17, 2016

1 min read

NFA announces Dashboard webinar on February 25

announces Dashboard webinar on February 25 In preparation for the launch of the NFA Dashboard, the new entryway to NFA's Online Registration System (ORS), NFA will conduct a webinar on Thursday, February 25, 2016, at 10:00 a.m. CST. ORS is the web-based application that allows firms and individuals to apply for CFTC registration and NFA membership, and to manage their numerous filing requirements. Given that ORS is primarily a tool for Members, NFA staff solicited and received valuable Member feedback to improve the system's usability and efficiency. The new Dashboard will summarize all of a firm's outstanding compliance and registration filing requirements so it can quickly determine what items require action. During this 60-minute webinar, NFA senior staff will explain the functionality of the Dashboard, provide screenshots, and answer your questions. This webinar is geared toward NFA Member firms and CFTC registrants, but anyone with ORS access is welcome to...

Why Hackers Hack Websites: Securing Your Website for Compliance and to Protect Your Business

With the upcoming cybersecurity requirements by the NFA and nearly every regulatory body overseeing financial service industry participants, it’s important to not only comply with cybersecurity regulations but to use this as an opportunity protect your business’ website. Many businesses believe their website isn’t important enough to require website security for the following reasons: My company is too small My website doesn’t store sensitive client information My website is not that important to their business Hackers don’t discriminate by business size, may or may not target your client information directly, and will damage your brand reputation. Here are reasons why hackers hack websites: 1. Vandalism and activism By switching out your home page with messages supporting questionable organizations such as hacker or terrorist groups, hackers are able to spread their message on your website. 2. To host illegal or objectionable content Media such as photos, video, or audio are stored...

NIBA Member Testimonials

The NIBA is going to begin soliciting testimonials from current and new members to be included in monthly newsletter and highlighted online and in social media. The NIBA represents your interests and is always looking for ways to add value to your membership. The NIBA's board appreciates your comments and looks forward to hearing more about your thoughts and experiences throughout the year. Current Member Testimonial: "The NIBA has been a wonderful resource for me. The content of their conferences, along with the connections I make with other attendees make it well worth my time. These resources have paid results in a better understanding of regulations and industry direction." -Carla Peterson, Chief Administration Officer, Stewart-Peterson

NIBA-DePaul University Joint Program Announcement

The NIBA is proud to have DePaul University as its educational partner. NIBA is always looking for ways to add value to your membership and provide you with the resources, tools and education to further your business interests. The NIBA Board of Directors has recently formed a committee to work with DePaul University on promoting a joint program that focuses on placing qualified interns at firms within the industry. We have spoken to firms who have utilized DePaul interns in the past and have had great success, where both the firm and the intern mutually benefited. One of the biggest non-compliance operational concerns to firms is a need for qualified individuals. This program offers the opportunity for firms to find qualified interns that for the right candidate could turn into a potential broker, analyst, compliance analyst, financial model programmer, etc. Please look out for additional information on this program as...

February Chairman's Letter

“To meet other IB and CTA owners.” “To attend the compliance sessions at the membership meetings -- I can understand what those guys are saying.” “To make sure the CFTC hears my opinion.” “To get first-hand knowledge of what the NFA and exchanges are doing.” When I asked members why they belong to the NIBA, I heard those four reasons most often. That makes me proud and very happy, because those objectives are exactly what the NIBA was founded to meet. During 2016, NIBA will celebrate its 25th Anniversary Year. Please renew or join now during our annual membership campaign. Your membership will “pay-it-forward” for: * Admission to all three membership meetings during the year * Your firm listing in the NIBA Online Directory * Representation with our regulators including CFTC, NFA and the exchanges * The NIBA electronic newsletter delivered to your in-box twice monthly * Access to “NIBA...

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