NIBA - Celebrating 35 Years

NIBA Journal

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

CFTC Presents a Feature Session at the NIBA Conference
Member Announcements
1 min read

CFTC Presents a Feature Session at the NIBA Conference

NIBA will hold its Spring Membership Conference April 18, 2012 in New York City at the NYMEX Building, 1 No. End Avenue. Registration and Coffee begin at 12:30pm; sessions begin at 1:15pm. Our featured speaker, the Honorable Jill Sommers, is the Senior CFTC Commissioner with regard to the MF Gobal matter. She will be discussing CFTC responses and proposals aimed at preventing another calamity such as resulted from MFG's failure and bankruptcy from ever happening again. In addition to the CFTC Session, the meeting also includes: NIBA's Semi-Annual Legal Review How to Assess the Risks of Doing Business with your FCM Forex: Exchange-Traded or Cash? The Market Update from Telvent DTN A joint NIBA/CTA Expo Networking/Cocktail Reception immediately follows the business sessions at the exchange building. NIBA members are invited to attend the April 18 meeting Free. Please register now. Space at the exchange building is quite limited and this...

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Introducing Broker--Net Capital Calculations
Marketing
2 min read

Introducing Broker--Net Capital Calculations

During a recent routine NFA audit of one of our Introducing Broker (IB) clients, it became apparent that NFA is enforcing the following: Security Deposits with your FCM are treated as 50% current and 50% noncurrent for capital purposes. Escrow Accounts (or other trading accounts) at your FCM are considered current for capital purposes but has a 50% haircut during the Net Capital Computation. If the Escrow account is being traded by your firm at a level equivalent to the dollars in the account, then the account is considered a firm trading account and the account balance is considered current without the 50% haircut. However, if there are uncovered open positions in the account, the standard haircut against net capital applies on those open positions. An Error account with your FCM may also be reviewed in the same manner as an Escrow account. Therefore, we recommend reviewing your accounts held...

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Top 10 Google AdWords Mistakes Brokers Make When Generating Futures Leads
Marketing
5 min read

Top 10 Google AdWords Mistakes Brokers Make When Generating Futures Leads

Google AdWords is the most effective, budget-friendly, and powerful way to generate futures leads. Ads can be displayed not only on Google but on websites of all sizes from CNBC and Bloomberg to individual bloggers. Add the ability to view informative reports and set your own-budget (and stop-and-start on the fly) and you see why AdWords is the advertising method of choice. However, in the ongoing quest for futures leads, many of the brokers we speak with have tried Google AdWords or other Search Engine Marketing tools but have been disappointed with the results. Common complaints are that they spent a lot of money, didn’t generate many leads, and it was harder than they thought to set up. In our experience of executing and managing Search Engine Marketing campaigns for futures brokers, here’s what we’ve identified as the top 10 AdWords mistakes: AdWords Mistake #1: Buying Too Many Keywords When...

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Telvent DTN | Focus on the Membership, February 2012
Focus on the Membership
4 min read

Telvent DTN | Focus on the Membership, February 2012

Primary Business Telvent DTN is a global, industry-leading provider of commodity trading tools and information. Its flagship product, DTN ProphetX®, helps clients make the most profitable trading and risk management decisions possible, across a wide range of commodities, including grains, softs, energy and metals. DTN ProphetX also provides subscribers with sophisticated technical and fundamental analysis, extensive charting features, commodity focused news wires, streaming real-time quotes, and historical data feeds. By employing the largest and most highly-awarded news team in agriculture, Telvent DTN covers the breaking news that drives both the OTC and futures markets to 700,000 subscribers in over 30 countries worldwide, including every major market participant like Bunge, Louis Dreyfus, FCStone, ECOM, Cargill, Noble Resources, Kingsman Sugar and J.P. Morgan. www.telvent.com/trading By whom, and how was the firm started? DTN was founded in 1984, and became part of Telvent in 2008. Telvent DTN became part of Schneider Electric in...

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

Chairman's Message | February 2012

Dear Members - On April 18, 2012 you will have the opportunity to ask the CFTC what went wrong at MF Global. We are honored to have Commissioner Jill Sommers speaking to our membership at our annual spring conference. She is the Senior Commissioner with respect to MF Global matter and, as such, Ms. Sommers has testified before both U.S. House of Representatives and Senate committees. Her responsibilities in that matter include exercising executive and administrative authority of the commission in: The pending enforcement investigation The pending bankruptcy actions of both the MFG BD/FCM and the parent company Other actions to recover customer funds and determine reason for the shortfalls in customer funds In addition to Ms. Sommers’ session, the April 18 meeting will feature a discussion on: The pros and cons of cash v. exchange-traded forex How to evaluate the risk of doing business with your FCM A client-driven...

By NIBARead article
ICE Futures U.S. Offers Weekly Option Contracts on Sugar No. 11, Cotton No. 2 and Coffee “C” Futures
Marketing
2 min read

ICE Futures U.S. Offers Weekly Option Contracts on Sugar No. 11, Cotton No. 2 and Coffee “C” Futures

ICE Futures U.S. now lists weekly option contracts on Sugar No. 11®, Cotton No. 2® and Coffee “C”® futures contracts. The new weekly option contracts are short-life options that share most of the contract terms of the existing monthly option contracts – including strike price, minimum price quote, trading hours and exercise and assignment provisions. The weekly options, however, expire on a different date than the monthly options, providing an expiration on each Friday that is not already the expiration date for a monthly option on the relevant futures contracts. For each product, three weekly option expirations are listed concurrently, so each weekly option has a trading life of approximately four weeks. A Frequently Asked Questions document is available for the weekly options that covers, for example, how to determine the underlying futures contract for a weekly option and the naming/product code convention for the ICE weekly options. You can...

By NIBARead article
NFA Requires Updates, Disclosures and Filings from CTAs and CPOs That Managed MF Global Assets
Marketing
2 min read

NFA Requires Updates, Disclosures and Filings from CTAs and CPOs That Managed MF Global Assets

In the wake of the MF Global collapse, NFA is requiring CTAs and CPOs that managed assets at the failed FCM to make certain updates, disclosures and filings. CTAs must calculate their performance capsules in accordance with NFA Notice to Members I-12-04. That notice essentially provides that CTAs with programs involving MF Global managed accounts that were not notionally funded and that were frozen by the bankruptcy should not include the MF Global account performance in the program's track record if the program also had accounts at one or more other FCMs or if the CTA was forced to close positions and cease trading during November, 2011 after positions and margin cash were transferred. In the latter case, the track record should show "NT" for the month, and in the former case only the accounts at other FCMs should be used to calculate performance. If the program had only non-notionally...

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CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers
MF Global Updates
4 min read

CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers

Fund Launched as Initial Step in Restoring Confidence of Market Users CHICAGO, February 2, 2012 – CME Group today announced that it will establish a $100 million fund designed to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets. In light of the recent MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country’s food producers who are using CME Group futures markets to hedge their crops and livestock that feed the world. Under the Family Farmer and Rancher Protection Fund, expected to be in effect by March 1, 2012, farmers and ranchers using CME Group products will be eligible for up to $25,000 per account in the case of losses resulting from the...

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Trading Program Performance Calculations and Presentation by CTAs with Client Assets held at MF Global, Inc.
MF Global Updates
4 min read

Trading Program Performance Calculations and Presentation by CTAs with Client Assets held at MF Global, Inc.

Notice to Members I-12-04 January 27, 2012 Frequently Asked Questions - Trading Program Performance Calculations and Presentation by CTAs with Client Assets held at MF Global, Inc. As a result of the October 31, 2011 bankruptcy proceeding involving MF Global, Inc. (MFG), NFA has received a number of questions from CTAs regarding how to calculate and present performance information for Trading Programs with client managed accounts that were affected by the MFG bankruptcy proceeding. NFA is issuing this notice to address those frequently asked questions. 1. All of my managed client accounts were held at MFG. The open positions in those accounts were subsequently transferred to another FCM. After the transfer, I continued to trade the accounts according to the trading program. How do I reflect the performance results? Results should be based upon the assets under the CTA's control. Any customer assets that were not included in the transfer...

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MF Global Trustee Continues Response to NIBA's Commission Run Request
MF Global Updates
1 min read

MF Global Trustee Continues Response to NIBA's Commission Run Request

Over 80 Introducing Brokers have contacted the MF Global Bankruptcy Trustee's office to date to request their October commission runs. The process for requesting your office run is posted in the NIBA update "IBS Granted Access to October Commission Runs" here. Introducing Brokers are able to receive their October MF Global commission runs as a result of a request made by NIBA through its legal advisors, Schuyler, Roche & Crisham, directly to the Trustee in behalf of our members.

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