Insights, analysis, and updates from the National Introducing Brokers Association
Lawyers for former Gov. Jon Corzine and 25 other ex-MF Global workers have asked a federal judge overseeing the firm’s bankruptcy to reconsider his decision to not let their clients immediately tap an additional $10 million in insurance money earmarked for their legal defense. Go to NJ.com for the full article.
When brokers mention the Walsh Agency it's usually followed by a John Walsh story. Everyone I have spoken with in the past few months have told me what a character he was. It is with a heavy heart that I inform you that John passed away earlier this year. He was lucky, he played golf, and bridge on Wednesday, got sick on Thursday, and never woke up. His faith was very strong, and I have no doubt John is making people laugh in heaven. Here is a link to his obituary. John started the Walsh Agency over 43 years ago, and he was passionate about ethics, and anti-money laundering. He truly felt it was his responsibly to keep brokers, and IBs informed. He was a natural teacher, and his knowledge, and understanding of the material made him a valuable resource to many of us. I was very lucky to call...
MF Global trustee James Giddens has asked a bankruptcy court for permission to return the remaining money owed to the firm's customers who traded on domestic exchanges. "The relief sought in this motion, if granted, should allow every one of the more than 26,000 former customers of MFGI with allowed net equity claims to be paid in full before the end of the calendar year," a court filing said. To read the full article, go to www.reuters.com
Futures-market users and regulators testified before the House Agriculture Subcommittee on General Farm Commodities and Risk Management that some parts of a proposal from the Commodity Futures Trading Commission would hurt members of the agricultural community. "We must examine if the costs outweigh the benefits," said subcommittee Chairman Mike Conaway, R-Texas. "Farmers and ranchers who are supposed to be protected by this rule have expressed deep skepticism of it, which I share." To view the full article go to www.agri-pulse.com
The SIPA trustee of collapsed futures broker MF Global, Inc. (“MFGI”) recently issued letters to many IBs asserting that the trustee may file preference actions to recover commission payments made by MFGI to the IBs within 90 days of MFGI’s October 31, 2011 bankruptcy filing. The letter indicates that IBs should contact an attorney in the trustee’s office by September 20, 2013 to discuss the issue. Depending on individual IBs’ particular facts and circumstances, there are a number of defenses and arguments that the IBs may be able to assert to such preference actions. IBs should analyze how these defenses and arguments apply to their facts and circumstances and then communicate with the trustee’s office with the aim of getting the trustee to agree either that no amount is subject to a preference action or that the trustee will settle for a mutually acceptable amount. If individual disputes cannot be...
It’s a tough time to be a futures broker. Despite surviving the 1-2 punch of MF Global and PFG, markets have been difficult to predict and volumes haven’t fully bounced back. In managed futures, CTAs as a group have under-performed and while traditional wisdom says to invest in a manager during a draw down—it’s a tough sale even for the most experienced investor. While generally speaking, the rise of the stock market is good for our economy and a sign of a market rebound, it makes selling futures a harder proposition when low-cost, less-complex investment vehicles such as Stock Index ETFs are performing well. Combine this with the fact that generating leads is harder, more expensive, and more work than before…what’s a broker to do? I have the privilege of moderating an exciting panel discussion “Selling Commodities in an Equities Market” with some great fellow panelists including Daniel Ryba, Director...
It goes without saying that the safety of customer funds and information is critical in the futures industry. In recent years, NFA has taken significant steps to enhance customer protection. However, there are other serious threats to customer funds and personal information that aren't as outwardly visible or frequently publicly discussed: cyber attacks. Read the full article here on the National Futures Association's website.
Most of the work I have been doing on the NFA board thus far has been trying to open the eyes of fellow board members and senior NFA staff to issues that affect the IB community. Issues such as no accountability following MF Global and PFG, inexperienced auditors, the inconsistent promotional material review process, the doubling up of AML responsibilities between the IB and FCM, and more. Unfortunately, the IB is almost an afterthought with everything else going on, from the integration of swaps to implementing the BRG report recommendations to improving customer protections. But there are those willing to listen, and I believe progress (however slow) is being made. To make more progress, however – we need to be louder as an IB community. The general responses I have gotten in my interactions thus far have been ones of doubt, with the usual response something along the lines of...
As one of four NFA Board Members representing CTAs and CPOs, I'm working to represent the interests of a broad spectrum of money managers and traders. But just who are these constituents and what are their interests? The answer is not simple and increasingly a moving target. That is because the population of CTA/CPO member firms is rising exponentially. In 2012, the CFTC rescinded a widely held exemption for certain commodity pools. In addition, the CFTC broadened the the definitions of CTAs and CPOs to include swaps. As of the first quarter of 2013, those changes yielded over 1,100 new members in the CTA/CPO category, almost half of whom use swaps. More firms will be required to register later this year, as an exemption from registration expires for "fund of funds" and family offices. To get a handle on just what are the needs of CTAs and CPOs, I have...
CFTC Regulation 1.73 affects IBs and FCMs that execute orders for customers. Thus IBs who execute give-up orders must adopt risk management procedures. This new regulation also applies to bunched orders. During the Legal Update panel at the NIBA conference on September 18th, we will be discussing how new regulations, including 1.73 affect IBs, FCMs, Swap Firms as well as other NFA Members. About the Author Michael Coglianese CPA, P.C. has been providing compliance, auditing, and accounting services for the futures industry for over 25 years. Mike can be reached directly at 630-351-8942 or via email mike@cogcpa.com. Visit www.cogcpa.com for a more complete picture of services offered. The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading information and trading programs are not endorsed by the NIBA, but are the individual opinions, styles, information and programs of the author.
