NIBA Journal

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

October 22, 2014

Chairman's Letter

Dear Members - For the 23th year in a row, this year’s NIBA fall conference was the best one yet! It does seem as if we always think the NIBA meeting we have just finished was the absolutely best one ever. And looking back over the conferences since our first one in May, 1991, it is true. Each meeting addresses the hot topics of the day, highlights new products and services and brings old friends and colleagues together. Thank you to all the speakers, sponsors and supporters for making the September 22 Chicago event a success. Please take a moment to take our survey and let us know what you want to talk about at our next member meeting - southern California in January, 2015. In November, the first phase of CFTC Reg. 1.22 dubbed the “residual interest” regulation will be implemented. Although NIBA President Steve Petillo and I suggested...

NFA Representative Panel Thoughts and Follow Up

At the recent NIBA meeting in Chicago several panel discussions focused on issues affecting the IB, CTA and CPO community. Regulations are always a hot topic for both Independent and Guaranteed IBs, especially at a time when rules are being created by the CFTC. The “Residual Interest Rule” which affects the FCMs net capital requirement as of November 14, 2014 could have a lasting impact on many IBs. This rule requires the FCM to capitalize margin calls older than T+1 (trade day plus 1 day). To meet this new requirement the FCM will likely insist your customers meet their margin calls by wire or ACH, depending on the size of the call. In most cases, sending checks through the US mail will no longer be a viable option. In addition to the issue of collecting margins in a volatile market, the IB should be aware of their FCMs available excess...

NIBA Chicago Conference Videos

Thank you to everyone who made the September NIBA Membership Meeting a success. Over 220 IBs, CTAs and other futures professionals attended a day full of information and ideas on everything from tax issues to new regulation. Thank you to all our panel participants. Every session was presented by an industry expert who graciously shared time and knowledge with NIBA members. The CME Group, primary sponsor for September's Chicago meeting, recorded two of the day's five sessions. The videotapes are available below, and will be a available any time. Details for NIBA's 2015 meetings will be posted on our website, theniba.com within a few weeks. Three locations are currently Melinda Schramm, Founder & Chairman NIBA NIBA Catalysts for Changing Market Trends & Volatility NIBA Big Compliance Issues Panel

2014 NIBA Conference Preview

Floor Tour led by Ron Grossman & William Gallwas – Whether you have visited the trading floor, traded on the floor or passed through the visitors’ gallery, a tour guided by Ron Grossman and William Gallwas is an experience in itself. The trading floor at some point in time (always seems to be 5 years from now) will become history and the NIBA has enlisted two of the best to host an insiders’ guided tour of what was, what is and what is to come of the Chicago trading pits. 8:00 am – CBOT, Sponsored by: ADM Investor Services Compliance for Swaps IBs and CTAs – Jeff Barclay, Panel Leader – Swaps compliance is a hot topic among industry and regulators as legislation has led to registration requirements and regulations which some argue “don’t fit.” This panel of industry experts includes the latest information and perspective from the NFA, as...

NIBA/ DePaul Arditti Center Event | How CFTC Reg. 1.22 Changes your Customer Relationship [Video]

On July 8, 2014, the NIBA and DePaul University's Arditti Center for Risk Management presented an afternoon event on the University campus in Chicago. DePaul recorded the program. The first session, Introduction to the NIBA included a panel discussion of the effect of CFTC Reg. 1.22 on our customer relationships, led by Susan Osmanski of Turnkey Trading Partners. The panel included Mike Coglianese, Michael Coglianese, CPA; Jeff Henderson, Henderson Law Firm; and Dale Spoljaric representing the NFA. A second panel discussed managed futures as an alternate asset class, watch it here.

NIBA/ DePaul Arditti Center Event | Managed Futures: Perspectives on a Growing Asset Class [Video]

Part One Part Two On July 8, 2014, the NIBA and DePaul University's Arditti Center for Risk Management presented an afternoon event on the University campus in Chicago. DePaul recorded the program. The second panel discussed managed futures as an alternate asset class and included moderator Jason Turnipseed, Managed Account Research; Adrian Fleisher, Ten Yard Capital, Paul Sylvia, Aon Hewitt; and Mark Shore, Shore Capital Management and DePaul University. The first panel discussed CFTC Reg. 1.22 and how it changes your customer relationship, watch it here.

Risk Leadership Keynote Lunch, September 24th

The Arditti Center is pleased to announce that Michelle McCarthy will be the September 24th keynote speaker for the Risk Leadership Program. Michelle will discuss how risk management developed in banks, and how it differs when applied to other industries, particularly investment management. She will also highlight elements which derive from strong vs weak risk leadership, eg. risk-aware culture, healthy challenge, transparency, accountability, and reputation risk. The keynote lunch is free and part of the larger Risk Leadership Series. Find out more on the Arditti website, and RSVP for lunch on the Registration Page. Michelle McCarthy is a Managing Director and heads the Risk Management function at Nuveen Investments. Before joining Nuveen in 2010, she served as Chief Risk Officer at Russell Investments. From 2003 to 2009 she was the Chief Market and Operational Risk Officer at Washington Mutual Bank, responsible for measuring and monitoring interest rate risk limits on...

CTA Insights: Stockyard - An Overview of the Basics of Livestock

Stockyard Trading is a fundamental, discretionary program that trades strictly livestock - cattle and hogs. Like most fundamental agricultural traders, we spend a great deal of our time evaluating and formulating our outlook on these markets.  It is our experience and extensive knowledge of the commercial livestock industry that provides us an ongoing informational edge in trading these markets.  For those of you less versed on the commercial livestock industry, we thought we would take this opportunity to share some of the basics with you - structure and factors - that shape these markets. First, let’s talk about the cattle market. The first stage is cow/calf operations where the cows gestate for 9 months, calved [birthed] and kept until they are weaned - usually about 6 months.  The cattle are then transferred to a backgrounding operation where they are put out to pasture to grow and increase weight - approximately...

NIBA September Conference Annoucement

You're Invited! You're invited to the fall NIBA Membership Conference, September 22 in Chicago. This is a full day of education, information and networking designed to give you the tools for a successful business. The day begins with a floor tour at the historic Chicago Board of Trade, along with a continental breakfast. That's followed by a session on compliance issues specifically focused on swaps participants, and a panel of experts discussing tax issues and changes every IB and CTA needs to be aware of. Box Lunches will be served at the CME Group Building. We are happy to announce Blu Putnam, Managing Director and Chief Economist, CME Group as our luncheon speaker. The afternoon program includes a session on the BIG compliance issues we are all facing - CFTC Reg. 1.22 and Reg. 1.35; a panel presentation focused on marketing and compliance for CTAs and IBs who utilize CTA...

Chairman's Letter

Dear Members - Next week, I have appointments with our CFTC regulators. Steve Petillo, NIBA President, and I are going to Washington, DC to meet the three new members of the Commission along with Commissioner Weijen, the remaining member of the past group of five. Our agenda points include a discussion of Regulation 1.22 -- dubbed the "residual interest" rule, and Regulation 1.35 -- the recording rule which chiefly applies to cell phone use. The first phase of Reg. 1.22 is due to become effective in November. NIBA has not spoken to any registrant who believes this regulation is good for the industry, and that is what we will be telling the Commission. We have consistently opposed this regulation since it was proposed for reasons including that we do not believe it serves any customer protection goal, and will have the effect of making it more difficult for many of...

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