NIBA Journal

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

December 21, 2011

CFTC Actions - MFG

To Members of the NIBA: On Thursday, Dec. 15 I wrote to the office of Commissioner Jill Sommers to ask questions concerning the permitted investments of customer seg funds by FCMs. Yesterday I received a call from her office. The Commission will be reviewing current regulation in the context of lessons learned from MF Global. Ms. Sommers indicated that input from the NIBA will be a valuable part of that process. I will keep you posted on the dates, agenda points, etc., and I invite comments and suggestions. Melinda Schramm, Chairman NIBA

Final Information Regarding the Third Interim Distribution of Customer Funds to Clients of MF Global Inc

On Friday, December 9, 2011 the U.S. Bankruptcy Court approved a petition by the SIPC Trustee for a bulk transfer and distribution of up to $2.1 billion to former MF Global Inc. commodities customers. The intent of this third distribution is to restore 72% of US segregated customer property to all commodities customers on a pro rata basis. As such, many US segregated customers who have already taken part in one of the first two interim distributions or have yet to receive a distribution may be entitled to receive further funds. The distribution for each account will be calculated based on the Net Liquidating Value on the day prior to transfer. Click here for the full text

AML and Ethics Training Certifications

Announcement Re: AML and Ethics Training Certifications NIBA members who formerly cleared MFG and took AML and Ethics Training from the Walsh Agency, can receive a copy of their certification documents free of charge. Receiving FCMs are required to confirm that APs have completed AML and Ethics Training. Those confirmation records are not readily accessible from MFG. If you took your trading from the Walsh Agency, the Agency will send you a copy of the declaration and certification for no charge. Email WalshAMLEthics@gmail.com, an NIBA Member Benefits Provider, and they will send you the documents within 72 hours free.

CME Group Letter on Terry Duffy's Senate Agriculture Committee Testimony

To Our CME Group Trading Community, Tuesday December 13th, Terry delivered testimony as part of the Senate Committee on Agriculture, Nutrition and Forestry's hearing on the failure of MF Global. We continue to share with the Congress that MF Global has put market users in a tragic position, as transfers of customer funds made by MF Global for the benefit of that firm are very serious violations of the Commodity Exchange Act, CFTC regulations and CME Group rules. These violations - not inadequate regulation - caused tremendous harm to our customers and our markets. We also continue to advocate for the return of customer funds - as much as possible as soon as possible. We are pleased to report that the MF Global Trustee's third distribution of customer funds (72 percent of total U.S. segregated customer property) is in process. After receiving funds from the Trustee early this week, we...

NIBA MF Global Updates and Activities

Dear NIBA Members - Welcome to the MF Global Update on the NIBA website. The purpose of the Update is to provide accurate, current information about all aspects of the MF Global failure and bankruptcy which directly affect our members. Here are a few actions the NIBA has already taken in your behalf: Filed our “Release the Seg Funds” Petition in the bankruptcy court. The Petition included approximately 700 signatures collected online in about 48 hours. Our Petition continues to be one of the items by which the court was most impressed. Engaged representation to file our Petition in person and to attend every substantial court hearing and bankruptcy trustee meeting in New York City. Met, and continue to meet, with NFA regarding its responses and filing requirements as a result of MFG’s failure. Ongoing communications and responses. Met, and continue to meet, with CME Group regarding transfers of customers...

Judge Approves 72% "True Up" Distribution to MF Global Customers

On Friday 12/9/11, Judge Glenn approved a large, third bulk distribution to MF Global customers that will get all customers to the point where they will each have gotten back roughly 72% of the value of their assets in domestic futures accounts. Included in the 72% calculation will be US and foreign currency that was held in domestic accounts, T-Bills, warehouse receipts and physical commodities. Futures contracts will be valued as of their transfer or liquidation price, so that any gains or losses after 10/31/11 will be reflected in the calculation. What will not be included are any amounts held for trading foreign futures – recovery of those amounts will take more time and distributions will come later. This distribution will begin immediately and most of the money will be distributed in a matter of days, although some amounts will involve more complex calculation and may take as long as...

CME Group Customer Letter on Duffy Testimony

To Our CME Group Trading Community, Yesterday, Terry delivered testimony as part of the House Committee on Agriculture's examination of the MF Global bankruptcy. As you are a valued member of the CME Group trading community, we want to provide additional context around the statement that Terry delivered. The full testimony can be accessed online. As you know first-hand, MF Global has put market users in a tragic position. The impact of MF Global's misconduct is significant for farmers, ranchers, grain cooperatives, miners and other commodity consumers, producers and end-users who use commodity price hedging as an integral part of their businesses. We can assure you that CME Group's efforts, with respect to the unprecedented loss of customer segregated funds caused by MF Global, have been, and will continue to be, to assist customers and minimize market disruptions. As Terry said in his testimony, on Monday, October 31, CME Group...

CME Group Member Letter on 3rd Trustee Distribution

December 9, 2011 To Our CME Group Trading Community, Today the Bankruptcy Court approved the MF Global Trustee's motion to make a third interim distribution of MF Global customer funds. This distribution, which is expected to begin next week, enables the Trustee to distribute 72 percent of customer funds previously frozen, including trapped account balances, dishonored checks, and distributions with respect to warehouse receipts and other customer property at MF Global. While the bankruptcy process does not move as fast as any of us would like, it is important to note that this process stands in stark contrast to the situation of MF Global customers outside the U.S., where many foreign receivers have not paid out any cash since the bankruptcy. Since this process began, CME Group is the only exchange to have offered any guarantee to accelerate the Trustee's distributions, and we are gratified that our $550 million guarantee...

Executive Coaching | Sequel to, "Grow Your Business" - Part 2

Much of my work is surprisingly personal in nature, since personalities and relationships underlie human resources issues. I have been called a business shrink, a career therapist. I provide a safe, objective impartial professional point of view. In last month’s NIBA Journal I told a personal story of when I refused a job offer. As the story continues…Remember I had refused a job offer because the president of the company was “rude” to me during the interview. As karma would have it, years later I ended up working with the same “rude” person….to be continued. But by then things had changed. He was building a new law practice and I was an independent Human Resources Consultant. We worked on his “rude” behavior, which turned out to be a profound shyness. His underlying problem was a discomfort with talking with a stranger one on one. While he was an excellent public...

MF Global Statement by NFA IB Representatives

NIBA Members, We'd like to share a few thoughts about the MF Global situation. First, we believe that customers should get segregated funds due them immediately. The basis of our industry has been that funds held in a commodity account have a minimal risk of loss due to institutional or market-structure failures. It is extremely important that we instill confidence in our customers and lenders to hedge and speculate in our markets. Just returning from an NFA Board meeting, we are assured the entire industry is working to get customer funds released by the bankruptcy trustee as soon as possible. The NFA is scheduling visits/audits to all FCMs to confirm compliance with seg fund requirements. Remember, facts are limited and action in this matter is completely up to the court appointed trustee. Regulators are in search of information and facts for all involved in this situation. We would urge everyone...

By NIBARead article

Page 101

NIBA Journal

CFTC Actions - MFG

Final Information Regarding the Third Interim Distribution of Customer Funds to Clients of MF Global Inc

AML and Ethics Training Certifications

CME Group Letter on Terry Duffy's Senate Agriculture Committee Testimony

NIBA MF Global Updates and Activities

Judge Approves 72% "True Up" Distribution to MF Global Customers

CME Group Customer Letter on Duffy Testimony

CME Group Member Letter on 3rd Trustee Distribution

Executive Coaching | Sequel to, "Grow Your Business" - Part 2

MF Global Statement by NFA IB Representatives

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