NIBA Journal

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

November 19, 2014

Member Fee Reminder:

Member Fee Reminders will be sent to all member categories in December. For the 10th year, fees for IBs, CTAs and CPOs will remain at $150. You can renew your membership or join online or with the application included in your reminder envelope. Benefits of membership include: A company listing with click-thru to your website at the NIBA Online Broker Directory. The NIBA Broker Directory is recognized by the industry as the go-to source for general and contact information for IBs, CTAs and CPOs. Attendance at Member conferences and other events including February 19 in southern California, April 30 in New York City and September in Chicago. In 2014, more than 1,000 registrants attended our meetings. Representation of your Opinions at the CFTC, NFA and Exchanges. Your opinions made a difference regarding implementation of CFTC Regulations 1.22 and 1.35, and the crediting of ACHs to customer accounts. The CME Group...

Housekeeping, reminders and updates

INTRODUCING BROKERS An October 31, 2014, Notice to Members, Notice I-14-27, announced that all introducing brokers (“IBs”) financial reports are now required to be filed electronically, this includes the annual certified reports. This is a result of the National Futures Association’s (“NFA”) amendment to Section 5 of the NFA Manual. Section 5 outlines the financial requirements for Member IBs. The amendment to the financial requirements includes the annual certified FOCUS reports, submitted by IBs that are also broker-dealers, and is effective October 31, 2014, for reports filed through the WinJammer filing system and the NFA’s EasyFile system. The WinJammer system was recently upgraded to accommodate filings of certified annual FOCUS reports. COMMODITY FUTURES TRADING COMMISSION  On November 10, 2014, the Commodity Futures Trading Commission (“CFTC”) issued press release PR: 7055-14 (“Press Release”) and staff letter No: 14-137 (“Staff Letter”), both of which addressed trade executions and swaps. The Press release...

5 Things Your Mother Never Told You About Your Reputation

How reputation management works and why you need to work yours! I admit I was that mother that told her children, “It doesn’t matter what other people think about you. It just matters what you believe about yourself.” I was wrong. Perception lives in the minds of the people we encounter – our clients, colleagues, managers, brokers, etc. – and their perception of who we are and what we have to offer directly influences their willingness to give us what we want. Do your clients consider you trustworthy, knowledgeable and confident in your recommendations? Or, do they see you as difficult to deal with and non-responsive? The impact of reputation to your career and business is significant! Managing and directing the way your target audience perceives you could be the most critical career tool you use. Reputation management, and personal branding, takes much of the mystery and randomness out of...

By NIBARead article

Member of the Month | Michael Coglianese CPA, P.C.

November 19, 2014

5 min read

Member of the Month | Michael Coglianese CPA, P.C.

NIBA Member Spotlight on Michael Coglianese CPA, P.C. Founded: April 1987 NIBA Member Since: 2009 Address: 125 E. Lake Street, Suite 303, Bloomingdale, IL 60108 Branch Offices: 2 Web: cogcpa.com About the Firm:  Michael Coglianese CPA, P.C. was founded in 1987.  Before that, Mike Coglianese was working at NFA as an In-Charge Compliance Auditor.  Sitting across the table during the compliance and financial audits and investigations of NFA Members, Mike realized that the Futures Industry was lacking accountants who were experienced with the intricacies of the regulatory world.  He set out to fill that void. Over the past 28 years, his firm and the services offered have grown to assist the Futures and Alternative Investment industry with their year-end certified audit requirements, Track Records and Performance Capsules, Regulatory Registration and Compliance, and Tax Preparation. Michael Coglianese holds a Bachelor of Science in Accounting from Purdue University and is a Certified Public Accountant,...

By NIBARead article

The CFTC Revisits Dodd-Frank Rulemakings, and Responsiveness Shines Through

November 19, 2014

5 min read

The CFTC Revisits Dodd-Frank Rulemakings, and Responsiveness Shines Through

On Monday, November 3, 2014, the U.S. Commodity Futures Trading Commission (CFTC) held an open meeting to consider three proposed rule amendments addressing the residual interest deadline (CFTC Rule 1.22), recordkeeping requirements for commodity interest and related cash or forward transactions (CFTC Rule 1.35), and forward contracts with embedded volumetric optionality (CFTC Products Release ).  In passing the amendments, the CFTC, acting under a new chairman, demonstrated a willingness to re-visit prior rulemaking under the Dodd-Frank Act.  The meeting began with opening statements by Chairman Massad and Commissioners Wetjen and Bowen. Chairman Massad vocalized support of the amendments and stressed that the proposals were only minor adjustments to former rules that would “fine-tune” various procedures to ensure that as regulation increases, commercial parties can continue to operate profitably.  Chairman Massad stated, “[t]he changes we are proposing today help ensure that as we regulate the potential for excessive risks in these...

By NIBARead article

Highlighting Important Changes Happening to BASIC

November 19, 2014

2 min read

Highlighting Important Changes Happening to BASIC

As part of its ongoing commitment to customer protection, National Futures Association (NFA) recently made changes to its display of futures commission merchant (FCM) financial information on its Background Affiliation Status Information Center (BASIC) online tool. BASIC is a comprehensive database of registration, disciplinary and financial information about derivatives firms and salespeople. It contains the disciplinary history and other background information of more than 150,000 individuals and 10,000 firms that currently, or have been, involved in the derivatives industry. Since 2012 when NFA enhanced the amount of information it provides to investors performing due diligence of firms, BASIC has displayed a variety of futures commission merchant (FCM) financial data. At this time, NFA made publicly available three reports on FCMs' percentage of customer segregated funds, secured amount funds and cleared swaps customer collateral held in cash, which are updated on a monthly or semi-monthly basis. However, in November 2013, the...

2014 NIBA Board of Directors Nominations

NIBA BOD Nominations The National Introducing Brokers Association nominates the following association members for positions to the Board of Directors. Nominees For Additional 3 Year Term: Ralph Preston: Asoociated Person, Heritage West Financial, Inc. (HWFI), San Diego, CA. Ralph has served on the NIBA Board of Directors for the past three years. He is the Committee Chairman, Service Providers and Joint Chairman, southern California membership meeting. Ralph has been registered with HWFI since 2003 and has been a principal of the firm since 2005. If no additional names are nominated, the above are deemed elected within 15 days of this notice. To nominate an additional candidate: i) the candidate must have been a NIBA member for at least 2-years prior to this notice ii) the candidate must have served on a NIBA committee or worked on a NIBA program or project such as the conference or newsletter iii) the candidate...

Market Data Fees - An Opinion

As the NIBA has been reporting since last November, the CME Group is discontinuing the current market data waiver effective January 2015. For many members of the NIBA and traders at large, the financial impact could be devastating. The Zaner Group, a longtime member of the NIBA located in Chicago, is a well established IB. They are a good example of what I consider to be a traditional IB model. The knowledgeable brokers have personal relationships with their clients and offer a variety of services. Matt Zaner, CEO of Zaner Group, shared a breakdown of costs associated with the platforms and data they currently use together with his expected expenses after the waiver is discontinued. The results are staggering. he facts: An office with a dozen brokers can expect an increase in expenses for market data alone of over $15,000 per month. All firms will see costs go up. Zaner...

Big Trends in Big Data:

Reprinted with permission from DePaul Business Exchange.  © 2014 by DePaul University Driehaus College of Business. All rights reserved.   Ninety percent of the data that exists in the world today has been created since 2010.   The consulting firm IDC predicts that by 2020 this digital universe will expand by a factor of 300, from 130 to 40,000 exabytes.   How much is that? One exabyte has 18 zeros behind it.   In people terms, that’s more than 5,200 gigabytes of data for every man, woman and child on Earth by 2020.   Consumers are the main source of this growth, creating more than two-thirds of the data in cyberspace through videos watched, photos shared, social media messages sent and purchases made online. Add to this a mountain of machine-generated data from smartphones, tablets and networked computers, plus supermarket scanners and other sensors, and what has come to be...

Master of One: The Specialist CTA

Over the past 10-20 years the client/broker relationship has fully evolved from a transactional one to a consultative one and appropriately to the client’s benefit.  Where commissions and fees used to be major elements of the sales cycle, now portfolio construction and access to alpha are key selling points toward attracting and maintaining investors.  This combined with an expanding universe of managed futures investments to choose from have brokers and advisors, now more than ever, charged with sourcing new and differentiated Commodity Trading Advisor (CTA) strategies and then building balanced, stable portfolios out of them.  Given this evolution and for ease of communication I will use the terms ‘portfolio advisor’ or just ‘advisor’ to indicate the person building the multi-CTA portfolio and ‘CTA’ to indicate the constituent Commodity Trading Advisors that are combined to form the portfolio. In this article we will: Define two basic types of CTA strategies Discuss...

By NIBARead article

Page 68