NIBA - Celebrating 35 Years

NIBA Journal

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

CME Fees–Snapshot of Who is Saying What Around the Industry
3 min read

CME Fees–Snapshot of Who is Saying What Around the Industry

Quotes from around the Industry This will push small retail traders to competing products. –Kurt Johnson, ADMIS It will cost me business because I now pay for some customers quote platforms. I simply cannot afford to do this with the new proposal. –Steve McWhorter President, McWhorter & Mathers Financial Services Please don’t raise the fees. We are a small IB that is barely hanging on as it is with all the new regulations. Pretty soon IB’s will be a thing of the past. –Dave Janson, President, Strategic Farm Marketing Ag customers will rely more on alternate products to manage risk such as government insurance programs, forward contracts, etc. CME should spend more time restoring customer confidence. –Troy Vetterkind Owner, Vetterkind Cattle Brokerage, LLC I am adamantly opposed to CME’s proposed transaction fee and quote fee increases. These fees will have a very detrimental effect on retail IB’s, as well as...

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UPDATE: CME Market Data Fee Increase Discussion With CME Group
Operations
2 min read

UPDATE: CME Market Data Fee Increase Discussion With CME Group

NIBA Members: Thank you for your comments and suggestions regarding the CME market data fee increase announced Nov. 12. Here is a summary of the Dec. 2 meeting with the CME market data team. 1. The size of the fee increase as announced -- $85 for each of the 4 exchanges per broker in your office, multiplied by every front end used, multiplied by each FCM you execute through. 2. New rules and best practices developed after the MF Global and PFG failures -- these rules essentially require brokers to use multiple platforms and/or FCMs as part of a good risk management strategy. 3. The definition of 'professional' v. 'non-professional' trader as announced -- customers who have opened accounts as 'LLC' 'Trust' or another legal designation will be considered professional because the are not natural persons. 4. The chilling effect additional fees will have on hiring new APs. 5. Enforcement...

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Market participants perspective on CME Market Data Fee Increase
NIBA Briefings
8 min read

Market participants perspective on CME Market Data Fee Increase

v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} w\:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} 0 0 1 1248 7117 Gate 39 Media 59 16 8349 14.0 Normal 0 false false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:Calibri; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} The purpose of this letter is to express an opinion regarding the CME’s announcement to increase its market data fees. Market participants, professional users and brokers alike are largely unaware of what the CME intends to do and how much of an impact it will have on their trading activities and respective businesses. It should be noted that from a broker’s perspective it is understood that real time access to market data is not something that is expected to be at no charge. Brokerage firms and traders are willing to pay for real...

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How to Ensure Transparency in Alternative Investments—White Paper Published by Gate 39 Media
Member Announcements
3 min read

How to Ensure Transparency in Alternative Investments—White Paper Published by Gate 39 Media

“Providing Transparency in Alternative Investments: The Importance of the Advisor-Client Relationship”, is a new white paper that discusses investment transparency, the hot topic in the world of managed futures and hedge funds. Transparency builds stronger interactions and understanding between advisors and clients in the long-term pursuit of investment returns. More than just providing a performance statement, transparency starts with the relationship and sets appropriate expectations for both parties. Written by Mark Shore, Adjunct Professor of Managed Futures at DePaul University and Research Principal of Shore Capital Management, this important white paper comes at a time of negative press coverage on the performance of and transparency in alternative investments. One opinion is that managed futures and hedge funds require additional transparency, when in fact they may have greater transparency then initially perceived when properly understood. The goal of investment transparency is to eliminate the possibility and potential for pretense or misunderstanding...

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Taking Your Questions on New CME Group Market Data Fee Structure for Discussion with CME Group
NIBA Briefings
2 min read

Taking Your Questions on New CME Group Market Data Fee Structure for Discussion with CME Group

NIBA Members: You may have received a direct communication from the CME Group or read recent National Introducing Brokers Association (NIBA) LinkedIn posts regarding the exchange's intent to raise market data fees. As the new policy is currently written, it will affect each of us and our customers. The NIBA has requested a face-to-face meeting with the CME Group in order to better understand their action and more importantly -- to express our members' concerns. We need your input. Please review the CME Group announcement and related links below: CME Group 2014 Fee Changes Summary CME Group 2014 Fee Changes Advisory Notice CME Group Market Data Information Page Then send your comments, questions and suggestions to melinda@futuresrep.com or post in the following NIBA LinkedIn forum. Include information on the effect the new fees will have on your business -- estimated costs, possible effects on trading volume, if you will, or...

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NFA Board of Directors IB & CTA Representatives panel
NIBA Briefings
2 min read

NFA Board of Directors IB & CTA Representatives panel

It was my privilege to moderate what I think was the most interesting presentation during the NIBA September Conference. I moderated the NFA Board of Directors IB & CTA Representatives panel. Paul Georgy, GIB, Jeff Malec, IIB, James Koutoulas, CTA and John Roe, CTA all spoke to a packed audience of the NFA registrants they represent. All four panelists are NIBA members. The session focused on what NFA IB and CTA representatives do and what they hope to accomplish through their participation on the NFA Board. Paul Georgy has served as the representative for GIBs for several years. He pointed out the NFA is very aware that GIBs play an essential role in the industry, and give the IB opinion and views significant weight in NFA Board decisions. He indicated that the NFA IB Advisory Committee which meets several times a year to advise the NFA Board on actions which...

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Corzine loses bid to dismiss lawsuit
MF Global Updates
1 min read

Corzine loses bid to dismiss lawsuit

Jon Corzine, former CEO of MF Global, lost a bid to dismiss litigation that seeks to hold him, other executives and banks responsible for the company's bankruptcy. "Defendants' contentions would suggest that ... perhaps the debacle must have been the fateful work of supernatural forces, or else that the explanation for a spectacular multi-billion dollar crash of a global corporate giant is simply that 'stuff happens,' " U.S. District Judge Victor Marrero wrote in his ruling.  >Click here to read the full article

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Follow up on Risk Management Procedures; 1.73 – Relates to Give Ups and Bunched Orders
2 min read

Follow up on Risk Management Procedures; 1.73 – Relates to Give Ups and Bunched Orders

CFTC Regulation 1.73 affects IBs and FCMs that execute orders for customers. Thus IBs who execute give-up orders and bunched orders must adopt risk management procedures. This new regulation has been in existence since June 2013. 1.73 came about from Dodd-Frank and requires clearing FCMs and executing firms to establish risk based limits for customer and prop accounts based on position size, order size, margin requirements, etc. It also requires the clearing FCM that is not serving as the executing firm to enter into an agreement that requires the clearing FCM to establish risk based limits for the customer and the executing firm to screen orders for compliance with those limits. Two important implications for IBS 1 the IB is required to screen customer orders to ensure they are in compliance with based limits of the clearing firm. This requires IBs to not only be aware of the risk standards...

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Annual Membership Campaign - NOW
Member Announcements
1 min read

Annual Membership Campaign - NOW

Earlier this month, we kicked off the NIBA Annual Membership Campaign. All current members have been mailed a 2014 renewal reminder and can simply return the form with a renewal check. If you prefer to pay by credit card or if you need to update your firm information in order to bring your online directory listing current, please go online to the membership page on the NIBA website. To join for the first time, please use the online form. NIBA membership continues to be a real value - your dues include free attendance to membership meeting throughout the year and a listing in the online Broker Directory. Introducing Brokers and Commodity Traders Advisors can join for $150. Individual APs are invited to become members for $75. Service Providers and FCMs are encouraged to call us before filling out the membership forms. The NIBA is your professional association for education and...

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NIBA Chairman Melinda Schramm's November Letter to Members
Member Announcements
3 min read

NIBA Chairman Melinda Schramm's November Letter to Members

Dear Members- Well, get ready for some good news and some not so good news. Good news #1. MF Global commodity customers are poised to get 100% back. On November 4, Trustee Giddens received approval from the MFG bankruptcy court for a plan that will repay customers in full. Neal Stevens’ article helps put this in perspective. Good news #2. The CFTC received the go-ahead from a federal court for it’s lawsuit against U.S. Bank N.A, the bank which held Peregrine Financial Group’s segregated funds. That suit alleges the bank treated the account as if it were Peregrine’s own. Now the not so great news #1. The new Recording Requirement compliance deadline looms: December 21, 2013, unless CFTC postpones or extends the time to comply. Jeff Kopiwoda has written a comprehensive update to his September Membership Meeting presentation. Not so good news #2. The CFTC approved a rule which will...

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