NIBA - Celebrating 35 Years

NIBA Journal

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

Heritage West Financial | June 2012 Focus on the Membership
Focus on the Membership
5 min read

Heritage West Financial | June 2012 Focus on the Membership

How did you get started? How did the firm get started? I started by trading my own account at the San Diego branch of Conti-Commodity in 1979 when I was 20 years old. Those were wild and woolly days! About 20 traders came in to the office on a daily basis to hang out and watch the big quote board on the front wall in the office. With the noise from the mechanical numbers revolving with each price change and the board lighting up either green or red for new highs and lows along with the squawk boxes blaring and brokers furiously calling in orders (no computers back then) it was quite an electric atmosphere. I traded my own account for years and in 1990 became a broker at a former Heinold office that was owned and operated by its former branch manager. Just a month later the owner announced...

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NIBA Summer Marketing & Sales Event Hosted at the Kansas City Board of Trade
Marketing
2 min read

NIBA Summer Marketing & Sales Event Hosted at the Kansas City Board of Trade

On June 21, 2012, the Kansas City Board of Trade will host the NIBA Summer Marketing and Sales Event. Registration and coffee open at 1:15pm and the business sessions begin at 2:00pm. A cocktail reception will follow immediately. The Kansas City Board of Trade, established near one of the world's most fertile growing regions, is the largest free market for hard red winter wheat. Prices negotiated at the KCBT are the benchmark for wheat prices around the world. The KCBT was founded in 1856 and 20 years later a "grain call," similar to wheat futures trading as it is known today, was established. The exchange has become an international market force, influencing wheat prices in Australia and Argentina as well as Kansas and Oklahoma. The exchange set new annual volume records in 2011 for Hard Red Winter wheat futures and for the exchange as a whole. A total of 6,582,673...

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The Vanishing FCM…
Marketing
2 min read

The Vanishing FCM…

Opinion piece by Richard Strait | Strait, LLC Over the past 7-10 years the FCM community has contracted exponentially to just a handful of providers. While many reasons for this can be cited, those that stand out are the increased costs of the regulatory compliance and increased capital requirements, coupled with skyrocketing regulatory haircuts levied on that capital and lower revenues. While the electronic market place has increased the cost efficiency of the Exchanges and their member firms, Capital “haircuts” on customer segregated funds alone may reach 10% in the near future while only five years ago they were as low as 4%. Many FCMs, particularly those who are subsidiary companies of larger firms and banks, must now go back to the parent for additional capital. Although the cost of money to the banking community is at record lows, parent firms may require 5% or more for the regulatory capital...

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It's Still a Weather Market | Summer Conference Presentation Summary
Marketing
1 min read

It's Still a Weather Market | Summer Conference Presentation Summary

In an era of surging world commodity demand and continual tight supplies, weather happenings both in the U.S. and in such global production areas as Brazil, Argentina, Ukraine, and China have the market’s attention on a day-to-day basis. DTN senior ag meteorologist Bryce Anderson will discuss the impact of such features as floods and drought on the market’s psyche. He will also review the latest trends in the Pacific regarding El Nino/La Nina and offer an up-to-date forecast for the rest of the 2012 growing season in northern hemisphere crop regions. A review of crop weather patterns in the southern hemisphere along with a first look at the 2012-13 growing season prospects in South America will also be covered in this wide-ranging session. Bryce Anderson will be speaking at the NIBA Conference, June 21 at the Kansas City Board of Trade. He can be contacted at Bryce.Anderson@telventdtn.com. The Opinions expressed...

By NIBARead article
Rule Submission Letter Regarding CFTC Rule 1.71
MF Global Updates
3 min read

Rule Submission Letter Regarding CFTC Rule 1.71

by Email June 1, 2012 Mr. David Stawick, Secretary Commodity Futures Trading Commission Three LaFayette Centre 1155 21st Street, NW Washington, DC 20581 Re: CFTC Rule 1.71 - Conflict of Interest Policies and Procedures by Futures Commission Merchants and Introducing Brokers: Scheduled to be Effective June 4, 2012 Mr. Stawick: I write in behalf of the National Introducing Brokers Association (NIBA). Founded in 1991, the NIBA represents Introducing Brokers, Commodity Trading Advisors and Associated Persons who are primarily engaged in the retail sector of the futures and options business. NIBA, a not-for-profit association, also has the support of 11 major Futures Commission Merchants and all the U.S. domestic exchanges. I write in behalf of our Introducing Broker (IB) membership, both Guaranteed IBs (GIBs) and Independent (IIBs), with regard to Rule 1.71 concerning conflicts of interest policies and procedures as they relate to research, advice and recommendations to the public. NIBA...

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Respected Energy and Commodity Analyst Phil Flynn joins The Price Futures Group, Inc.
Member Announcements
2 min read

Respected Energy and Commodity Analyst Phil Flynn joins The Price Futures Group, Inc.

CONTACT Susanna W. Jung Executive Vice President and Chief Operating Officer The PRICE Futures Group, Inc. Phone Number 800-769-7021 FAX Number 312-264-4303 Email Address sjung@pricegroup.com Website URL www.pricegroup.com Chicago, IL - June 1, 2012 The Price Futures Group, a division of Price Holdings, Inc., an employee-owned company, is very pleased to announce that Phil Flynn, internationally televised oil and commodity market analyst, and his team, are joining the firm. Phil is one of the world’s leading energy and general market analysts, providing investors, professional traders, and institutions with his up-to-the minute advice for over 25 years. Phil’s accurate and timely forecasts have come to be in great demand by industry and media worldwide. He is also a daily contributor to Fox Business Network where he provides daily market updates and analysis. Phil’s daily commentary is featured in Futures Magazine, International Business Times, 312 Energy, Enercast, among many others. Mr. Flynn...

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MF Global General Unsecured Claim Filings Due June 2, 2012 | Many IBs Should File
MF Global Updates
3 min read

MF Global General Unsecured Claim Filings Due June 2, 2012 | Many IBs Should File

Many introducing brokers have general unsecured claims against MF Global Inc. Such claims must be filed with the trustee by 11:59 PM Eastern Standard Time on June 2, 2012. The claim form can be downloaded in .pdf format from the trustee's website at www.mfglobaltrustee.com and may be filed either electronically by sending the form into the trustee's e-mail account at mfglobalclaims@epiqsystems.com or by mailing the form in to the address shown on the claim form. If the claim is sent to the e-mail address then the claimant should immediately receive a bounceback e-mail message indicating that the trustee received the e-mail. Although the bounceback e-mail message does not provide any information specific to the claim filed, in conjunction with the claimant's outgoing message the claimant can keep the bounceback message as a record that the e-mail with the filing was made in a timely manner. Typical introducing broker claims that...

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Chairman's Message | May 2012
Member Announcements
2 min read

Chairman's Message | May 2012

Dear Members - Thank you to everyone who attended our April 18th Member Meeting in New York City. Over 130 IBs, CTAs, APs and FCMs attended the event which was held at the NYMEX Building. During the meeting sessions we were reminded that June 2nd is the final date for general creditors to file claims in the MF Global bankruptcy. Some companies are buying brokers claims. During the Legal Update Session, we talked about the form the offers are taking and the specifics to look out for if you wish to sell your claim. Neal Stevens’ article in this month’s newsletter provides a short summary of that discussion. We also discussed regulatory changes from the CFTC and NFA which are currently being made in response to the MFG debacle. As they begin to take effect, we will update you. Each of the sessions included valuable ideas presented by experts in...

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Conflict of Interest Rules
Marketing
4 min read

Conflict of Interest Rules

Conflict of Interest The CFTC has adopted Rule 1.71. The Rule pertains to Conflict of Interest and will require most CFTC registered firms to implement a “Chinese wall” between the research department and non-research departments, and will therefore mainly impact the business trading unit or clearing units at futures commission merchants and introducing brokers, as applicable. The rule goes into effect June 4, 2012. Specifically, the CFTC put restrictions on who may have a relationship with the research department, who may communicate with the research department, and how the compensation for research analysts may be determined. Furthermore, there are new disclosure requirements for research reports, a prohibition of the promise of favorable research, and a prohibition on retaliation against research analysts for unfavorable research reports. In order for small IBs to have a more manageable level of burden in meeting any conflict of interest requirement, the CFTC has implemented an...

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