NIBA - Celebrating 35 Years

NIBA Journal

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

CTA Spotlight: Boston & Zechiel Management
Managed Futures
3 min read

CTA Spotlight: Boston & Zechiel Management

Trading is difficult. If it was easy, everyone would do it. To excel at trading is even that much harder. Successfully competing against some of societies’ smartest and most ambitious requires employing a trading strategy that gives one an edge. Without it, one can only hope for mediocrity. Boston & Zechiel Management has two trading programs that aim for that edge in order to differentiate ourselves from the other successful trading programs in the managed future space.  We view the equity markets through the rhythm of cycles, similar to that of the ocean tides. Both have repeatable and predictable patterns. Our edge is the ability to find actionable (profitable) patterns in the stock market on an annual time frame. Our Annual Cycle Trading Strategy (ACTS) is a long-only, hedged, equity index trading system that seeks to hold long positions during the positive portion of the market cycle, and then liquidate...

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R.J. O'Brien & Associates (RJO)| NIBA Member Spotlight
8 min read

R.J. O'Brien & Associates (RJO)| NIBA Member Spotlight

Firm Name: R.J. O’Brien & Associates (RJO) Founded: 1914 – Celebrating firm’s Centennial this year Number of Brokers: Approximately 400 IBs in the RJO network – the largest IB network in the industry NIBA Member Since: 2013  Web: www.rjobrien.com  About the Firm: How did you get started? Do you provide additional services besides brokerage? RJO had humble beginnings as a butter and egg merchant. Founded as John V. McCarthy & Company on Oct. 17, 1914, John McCarthy started the company pushing butter on a cart.  An immigrant of Ireland, he was the first in his family to attend high school.  In 1919, the firm became a founding member of the Chicago Mercantile Exchange.  John’s son-in-law, Robert J. O’Brien, Sr., joined the firm in 1952.  Like his father-in-law, he became active in leadership of the Exchange and took over as Chairman of CME for two terms in 1967 and 1968. Through perseverance,...

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Too Important to Fail--Another Look
5 min read

Too Important to Fail--Another Look

The latest issue of the IMF’s Global Financial Stability report (GSFR, March 2014) provides a comprehensive analysis of the “too important to fail” (TITF) problem. http://www.imf.org/External/Pubs/FT/GFSR/2014/01/index.htm The TITF problem is a well-known one in banking literature, and it arises from the fact that in an interconnected financial world, the failure of a major financial institution can have severe negative macroeconomic and macrofinancial impacts on both a national and global basis, therefore forcing governments to intervene to prevent a financial collapse. The two decades preceding the 2008 financial crisis witnessed an unprecedented period of financial globalization. Cross-border bank claims (as reported by the Bank for International Settlements, BIS) had increased to about 50% of global GDP by 2007. Moreover, the financial globalization was accompanied by an increasingly complex web of interconnectedness among major financial institutions in about 20 core countries, which accounted for 95% of the total cross-border claims. The TITF...

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Housekeeping
Housekeeping
6 min read

Housekeeping

CFTC Expedited No-Action Relief for CPO Delegation On May 12, 2014, the CFTC issued registration no-action relief on an expedited basis for CPOs who delegate certain activities to a registered CPO.  Under this streamlined approach, the delegating CPO must represent in its request letter that it satisfies the applicable criteria.  Such criteria includes, in part, representations that the delegating CPO: (1) has delegated to the designated CPO all of its investment management authority with respect to the commodity pool via a legally binding document, (2) does not participate in the solicitation of participants for the commodity pool, (3) does not manage any property of the commodity pool, (4) is not subject to a statutory disqualification, and (5) has delegated to the designated CPO the maintenance of the commodity pool’s books and records.  The delegating and designated CPOs must agree to be jointly and severally liable for any violation of the...

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Tech Talk: CQG Discusses Mobile Trading Technology
Trading Technology
6 min read

Tech Talk: CQG Discusses Mobile Trading Technology

The Rise of Mobile It’s no surprise that mobile device use has taken off in the era of bigger, better, faster. Once a luxury, mobile devices have proven to be a game changer for millions who rely on them to improve their lives both personally and professionally. Mobile web adoption is growing eight times faster now than it did in the 1990s and early 2000s; and surprisingly, 80% of time spent on mobile devices is inside apps (not talking or texting), according to DigitalBuzz. A third of internet users go online using mostly their phones, not desktop or laptop computers, according to Pew Research Internet Project. What’s impressive is that mobile tools are no longer a carbon copy of the desktop platform. The applications have gotten so advanced that users are accessing mobile even when not in “mobile” situations. We’re seeing mobile used in two very different ways: first, in...

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NIBA Comments to the NFA's Proposals for CTA/CPO Capital Requirements
5 min read

NIBA Comments to the NFA's Proposals for CTA/CPO Capital Requirements

In Re: Notice to Members I-14-03 Request for Comments - CPO/CTA Capital Requirement and Customer Protection Measures April 14, 2014 National Futures Association: The following comments regarding the above captioned Notice to Members are submitted by the National Introducing Brokers Association (NIBA). The NIBA, founded in 1991 is a membership association of Introducing Brokers (IBs), Commodity Trading Advisors (CTAs), Futures Commission Merchants FCMs) and other registered professionals who transact futures and options business primarily in, and for, the retail sector of the industry. These comments represent the opinion of our IB and CTA members only. The NFA should not impose a minimum capital requirement on CTA members. By definition, a CTA holds no funds and cannot control funds. The CTA’s client funds are held on deposit with an FCM. Since many CTA customers have a primary relationship with either an IB or FCM, that IB or FCM is monitoring the...

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MF Global customers to be fully reimbursed, trustee says
MF Global Updates
1 min read

MF Global customers to be fully reimbursed, trustee says

Today marks the beginning of a $6.7 billion payout to the former customers of MF Global Holdings. The process is expected to take several weeks but will return all the money that is owed to the approximately 26,500 former commodities and securities customers of the failed brokerage. "Checks are going in the mail that will make all public customers of MF Global Inc. 100% whole," trustee James Giddens said in a statement. Read Full Article at FIA SmartBrief

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FinCEN Issues an Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies
1 min read

FinCEN Issues an Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies

Notice to Members I-14-09 April 2, 2014 FinCEN Issues an Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies On March 25, 2014, the Financial Crimes Enforcement Network (FinCEN) issued an advisory announcing that the Financial Action Task Force (FATF) had updated its list of jurisdictions with strategic anti-money laundering and counter-terrorist financing (AML/CFT) deficiencies. NFA Member FCMs and IBs should review this Advisory to ensure that their AML programs have the most current information on FATF-identified jurisdictions with AML/CFT deficiencies, and revise their AML programs accordingly. A copy of the Advisory is available through FinCEN's website.

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NFA Proposal for CTA/CPO Capital Requirements
Member Announcements
5 min read

NFA Proposal for CTA/CPO Capital Requirements

In Re: Notice to Members I-14-03, Request for Comments - CPO/CTA Capital Requirement and Customer Protection Measures For the past seven years, NIBA membership has been open to CTAs and CPOs. Nearly one-quarter of current members are registered as CTAs - - either as their primary registration or in addition to the IB registration. We count among them established CTAs, as well as emerging managers. During the past couple of weeks we have had numerous comments from members regarding the NFA proposal for capital requirements, and additional customer protection measures for CPOs and CTAs. Virtually 100 percent of the comments we received to date oppose the minimum capital proposal for CTAs. Even IIBs who currently operate under a minimum capital requirement regulation, oppose the NFA’s proposal. At this time, there are not enough comments/suggests regarding CPO capital requirements/alternative customer protection measures for NIBA to take an Association position. The most...

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