NIBA Journal

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

September 30, 2015

El Nino Panel Summary

El Nino Made Its Mark In 2015 When the U.S. 2015 crop year is analyzed in years to come--and it will be--there is little doubt in my mind that one of the first phrases to identify this season will be something along the lines of "It was really an El Nino year". That may seem like a trivial point--after all, Pacific Ocean temperature patterns catalogued by the National Oceanic and Atmospheric Administration (NOAA) and analyzed by the Climate Prediction Center (CPC) show that El Nino warmth (above normal equator region temperatures) went into effect in the February-March-April period, and have stayed there since. However, I still heard comments from trade sources this past week saying that El Nino had been a "slow-developing" feature. In response to that, may I offer the heavy, record-breaking rain in the eastern and southern Corn Belt, the southeastern Plains, and parts of the Delta last...

6th Edition of The Complete IB Handbook is now available

6th Edition, The Complete IB Handbook by Melinda Schramm The 6th Edition of The Complete IB Handbook is now available for download HERE. The download is free compliments of the CME Group. I have been writing this guidebook for the Introducing Broker community since 1999. Many things have changed since then -- few FCMs, more cybersecurity worries - and I've got a lot more wrinkles! But many things have stayed the same -- ag-markets are still the most often traded by IB customers, there are still more GIBs registered with the NFA than IIBs, and IBs still list over-regulation as their #1 worry. The disasters our industry suffered as a result of the MF Global and Peregrine Financial are still having some effect in IB offices, but customer confidence is being restored and account deposits are up compared to 2013 and '14. I hope The Complete IB Handbook is useful...

Symposium on "How Should We Measure Futures Investment Performance?"

Stock and bond investments have a number of commonly accepted performance benchmarks, such as the S&P 500 and the BarCap indexes. But with futures-related investments – particularly actively managed ones – evaluating performance can be challenging. Join us for an interesting and informative session that examines these issues from different points of view, with presentations by four recognized industry experts: Hilary Till, Solich Scholar, J.P. Morgan Center for Commodities, University of Colorado-Denver and Principal, Premia Capital Management LLC Galen Burghardt, Director of Research, COEX Partners Inc. Mark Shore, President and Chief Investment Officer, Shore Capital Management LLC Jerry Nolan, Director of Business Development, County Cork LLC Symposium on "How Should We Measure Futures Investment Performance?" Monday, October 12 – 10:00 AM to 3:30 PM (lunch provided) Illini Center (Illinois Room, 4th floor) 200 South Wacker Drive, Chicago Hosted by the University of Illinois at Urbana-Champaign, Department of Agricultural & Consumer...

Second Annual DePaul University Cyber- Risk Conference

NFA Rep Panel Wrap-Up

The NIBA conference was kicked off with the NFA Reps Panel led by Rodney Dow. Mike Burke and Paul Georgy, current IB reps to the NFA Board as well as James Koutoulas and John Roe, current CTA reps to the NFA Board participated in the panel. The panel started with a lively discussion about the proposed NFA Interpretive notice related to cyber security. Additional topics covered were the NFA process involved in created the interpretive notice as related to cyber security, CTA capital requirements as well as the functions of the NFA board and the workings of the various NFA committees. Mike Burke announced, per his suggestion, an electronic voting process will be implemented by the NFA, hopefully before the upcoming election. That will lead to adjustments in the election process where each firm will designate a representative who will be allowed to vote electronically as well as participate in...

By NIBARead article

September 30, 2015

4 min read

Housekeeping, Reminders and Updates--Sept 2015

NATIONAL FUTURES ASSOCIATION Effective Date of New Requirements for Forex Dealer Members (“FDMs”) The NFA announced the effective date of the new capital and compliance requirements for FDMs after the Commodity Futures Trading Commission (“CFTC”) approved the NFA’s amendments to NFA Financial Requirements Section 11, NFA Financial Requirements Section 12 and NFA Compliance Rule 2-36. The CFTC’s approval of changes to Rule 2-36 also included the interpretive notice titled NFA Compliance Rule 2-36: Risk Management Program for Forex Dealer Members. As of January 4, 2016, FDMs must comply with the new financial and compliance requirements. NFA Financial Requirements Section 11 Section 11 addresses the financial requirements specific to FDMs. The amendments to Financial Requirements Section 11 impact the additional capital that an FDM must maintain. In addition to the base amount and 5% of all liabilities owed to customers that exceed $10 million, the amendments now also requires an FDM...

By NIBARead article

September 30, 2015

2 min read

Ask the NFA--Revision to August

Revised Answer to Question 1 of the August 2015 Ask the NFA Article: Selecting and Recommending CTAs- A Recommending CTAs- A Recommending CTA is one who recommends various trading advisors to clients (e.g. individuals, other CTAs or CPOs) but does not have any other authority regarding these trading CTAs. A Recommending CTA is required to be registered and an NFA Member since the CTA is providing commodity trading advice based on, or tailored to, particular clients. The Recommending CTA is not required to provide its own disclosure document to clients and as such is not required to provide past performance information of the clients for which it has acted as a recommending CTA. A Selecting CTA is one who will actually direct or trade the client's account. A Selecting CTA is one who has been granted authority by the client to select, hire, and fire trading CTAs for the client...

By NIBARead article

September 30, 2015

4 min read

Panel Summary-Top 5 Questions

Michael Coglianese had the pleasure of moderating a Panel of experts at the NIBA Conference. Mike was impressed by the answers as well as the insight of the questions from the audience. Here are some of the questions summarized below: Why should IRAs be important to the Business of an Introducing Broker? First, the managed futures industry is important to the alternative investment space, giving individual investors another avenue to diversity and protect their portfolio. There are $7.3 Trillion in IRA assets as of 2014. IRAs are investment accounts that allow people particular tax benefits. Individuals need options to help protect their portfolios and the industry needs to help educate people on the different options. What is the process of a client using IRA Funds to invest in a managed futures product? To keep things simple, there is generally a 3 step process for a client using an IRA elsewhere...

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September 16, 2015

2 min read

Ownership and Control Reporting ("OCR")

The reporting deadline under the CFTC’s Ownership and Control Reporting (“OCR”) rules is September 30, 2015. Although these rules became effective in February 2015, the CFTC granted firms an extension which until September 30 (six months) to collect and report the additional information information. What to Know In November 2013, the CFTC finalized new rules for Ownership and Control Reporting (“OCR”) which significantly expand the large trader reporting requirements for U.S. FCMs and their clients under CFTC Regulation Part 17 CFR 17.01(a), 17.01(b) and 20.5 (1). What this means for customers is that your FCM is now required to collect and provide more granular information to the CFTC and other regulatory bodies regarding underlying ownership and control of customer accounts. In addition, the OCR rules also require the reporting of trading by “volume” on an intraday basis in addition to the end-of-day position reporting that has always existed. Stay Informed...

The Best Long Term Source for Qualified Leads

Highlights and takeaways from the CopyBlogger Authority Rainmaker 2015 conference in Denver, CO. It was a useful conference focused on the full lifecycle of content marketing. I’d like to share a few takeaways with you. Focus on Creating Your Own Audience A key theme was building an owned audience. Too often, marketers rely on other platforms for audience — whether it’s a trade publication, an industry site, or a social media platform. We refer to the audiences on these platforms as “rented.” Relying on a rented audience is like building a house on rented land. Eventually, you’re going to lose the house. The same is true of renting an audience. I hear countless stories of firms that “built on rented land” only to have the deal changed. For example, in the past few years, lots of marketers, particularly in consumer-facing businesses, built out large Facebook audiences based on people who...

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