NIBA - Celebrating 35 Years

NIBA Journal

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

MF Global Updates
1 min read

CFTC Commissioner Details Plan for Futures Insurance

A shortfall in customer funds revealed at Peregrine Financial Group last month renewed calls for an insurance program for futures customers, but the plan still faces many hurdles, including getting legislation approved by Congress. "I've put this proposal out there because we need to move this discussion forward and get a new law on the books to better protect customers," Mr. Chilton said in an email. The fund, as Mr. Chilton outlines it, would be modeled on a similar insurance plan for securities customers and would be created by collecting fees from futures brokers "which would under no circumstance exceed 0.5% of the merchants' previous year gross revenue specific to futures." The insurance would pay out up to $250,000 in the event that customer money was taken. » Read Full Article at FOX Business   The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading...

By NIBARead article
Marketing
1 min read

Giddens seeks $160 million deal between CME and MF Global unit

James Giddens, the trustee liquidating the broker-dealer unit of MF Global Holdings, has asked Bankruptcy Judge Martin Glenn to approve a deal where CME Group would return $160 million to the division's estate. Glenn said he will rule later. The settlement deal is backed by the Commodity Futures Trading Commission. » Read Full Article on Reuters   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.

By NIBARead article
MF Global Updates
1 min read

Peregrine Judge Grants Trustee Request To Subpoena Banks

A federal judge has granted the bankruptcy trustee for Peregrine Financial Group the right to subpoena information from financial firms, including Goldman Sachs and JPMorgan Chase, with which Peregrine and its subsidiaries dealt. Peregrine's founder, Russell Wasendorf Sr., is accused of misappropriating more than $200 million in client money. » Read Full Article on Bloomberg   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.

By NIBARead article
Member Announcements
4 min read

Questions Regarding FCM Failures and NIBA’s Role

Dear NIBA Membership: The collapse of Peregrine Financial Group, Inc. (‘PFG’) represents the second time within nine months that a FCM failure accompanied by a shortfall in customer segregated funds has severely impacted the businesses of NIBA members. Many of you have asked why the PFG trustee has not distributed any funds, whereas the MF Global, Inc. (‘MFGI’) trustee made distributions early on in the bankruptcy and continues to make such distributions. You have also asked what role NIBA plays in both these situations. Second question first. NIBA is organized as a membership trade association. NIBA is mandated by its Bylaws to provide education and a forum for learning and networking in order to support the business efforts of the membership. Conferences, newsletters and communications with the CFTC and other regulators are some of the ways NIBA distributes the information and provides educational support. NIBA has been committed to this...

By NIBARead article
Member Announcements
5 min read

Statement of the NIBA to the Technology Advisory Committee, CFTC

July 25, 2012 Commissioner Scott O’Malia Three LaFayette Centre 1155 21st Street, NW Washington, DC 20581 Statement of the NIBA to the Technology Advisory Committee, CFTC Commissioner OʼMalia - Thank you and the CFTC Technology Advisory Committee for inviting the participation of the National Introducing Brokers Association (NIBA) in the conversation regarding the issues of the Committeeʼs meeting July 26, 2012. The NIBA was founded in 1991 as a non-profit association, whose mission is to support the business efforts of retail futures professionals through education, information and networking. Membership is open to Introducing Brokers (both IIB and GIB), Commodity Trading Advisors (CTAs) and Associated Persons (APs) registered in the futures, options and forex industries. In addition to IBs, CTAs and APs, NIBA members include nine FCMs, all domestic exchanges and 20 service providers. The NIBA Board of Directors members are elected from the membership of the Association, who then appoint...

By NIBARead article
Marketing
3 min read

Drought Pattern Appears Well-Established

» Drought Monitor Presentation Omaha (DTN) – What a season the crop year 2012 has turned into. A season which began with bright hopes for good production, which were bolstered by rapid planting progress, has instead turned into a nightmare of disastrously hot and dry conditions. The Drought of 2012 has carved itself a huge niche in history--alongside the droughts of 1988, the mid-1950s, and the mid-1930s. The scope of this drought is mind-boggling. As of July 19, about 80 percent of the U.S. was experiencing some form of drought conditions. This was a stunning reversal of fortune from just a few months earlier, when it looked like corn growers were going to have an historically large harvest and drought was limited to the southern tier of the country. Scientists trace the drought's origins to a combination of factors, ranging from La Niña conditions in the Pacific Ocean, which tend...

By NIBARead article
Focus on the Membership
3 min read

HighGround Trading Group, Inc. | July 2012 Focus on the Membership

How did you get started? How did the firm get started? Mike Burke started in the business as the Controller of an FCM and worked his way up to Senior Management positions at various FCMs including Iowa Grain, RJ O’Brien and MF Global. Rick Gallwas started on the brokerage side of the business and worked into Senior Management at various brokerage operations including ZAP Futures and RJO Futures. Burke and Gallwas partnered in 2009 to form HighGround an IIB providing value added services to direct retail and commercial ag clients as well as IBs and branch offices. Does the firm provide additional services besides brokerage? The firm provides hedge consulting, managed money products and research. What are the biggest challenges your clients face today? What does the firm do to help meet those challenges? The biggest challenge facing clients today is the recent failure of two FCMs. In an attempt...

By NIBARead article
Member Announcements
3 min read

Chairman's Message | July 2012

Dear Members - In our November 2011 newsletter I wrote: “The past three weeks have been the most frustrating, the most confusing, the most disappointing weeks I’ve spent in the 35 years I’ve been in the futures industry.” I never expected I would feel that way again. On July 9, two weeks ago, I was preparing for a trip to Washington, DC to meet with CFTC staff on several issues of concern to Association members, primarily the implementation of CFTC Rule 1.71 - Conflict of Interest. By the time I arrived at the Commission, the focus of our meetings had changed. Everyone wanted to discuss PFG. Most of us based in Chicago have met Russ Wasendorf, Sr. at one time or another. PFG was an NIBA member for a short period. When our Association would not back their efforts to have enhanced supervision and other responsibilities of the ‘tainted’ broker...

By NIBARead article
Marketing
3 min read

Wake Up Call– Rule 1.71 Effective Date August 3

CFTC Rule 1.71, applies to conflicts of interests within a brokerage operation, among other things. That is to say that the “research” department and the “trading” desks must independently coexist. The genesis of the rule really comes from the securities industry where research departments tout trade recommendations to the brokers who in turn interact with their clients and often suggest the trade. Admittedly, there is some overlap with the commodities world, but not as much as one may suppose, leading to a conclusion that trying to replicate this concept in our industry is like comparing apples and oranges. This Rule was originally scheduled to be effective on June 4, 2012 but with the lobbying of the NIBA, FIA and others a 60 day extension was granted. Now it’s time to pay attention - August 3 the rule becomes effective. FCMs appear to be ahead of the curve on this rule...

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