NIBA Journal

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

Financial Services Law Conference: Current Issues Around Town in Futures & Derivatives
Member Announcements
August 15, 2010
1 min read

Financial Services Law Conference: Current Issues Around Town in Futures & Derivatives

Financial Services Law Conference: Current Issues Around Town in Futures & Derivatives A one day program covering a variety of current compliance issues Dear Friends and Colleagues, In this era of regulatory reforms and aggressive enforcement, it is imperative that we all stay current on the latest trends in futures compliance. The consequences of being out of date can be catastrophic. On October 22, 2010, Chicago Kent College of Law will present Current Issues Around Town in Futures & Derivatives, a one day program covering a variety of current compliance issues. This program is the right solution, at the right time, for the right price. I encourage you to mark your calendar and to attend this important conference. In addition to the valuable content and 6 hours of CLE, there will be a Cocktail and Networking Reception immediately following the program. Click here for Financial Services Law Conference: Current Issues...

By NIBARead article
The Benefits and Risks of Utilizing Social Networking Sites In the Workplace
Marketing
July 26, 2010
7 min read

The Benefits and Risks of Utilizing Social Networking Sites In the Workplace

Social Networking is one hot topic these days. Globally, interest and participation in social media is growing at phenomenal rates. While people increasingly understand how to use Social Networking tools in their personal lives, businesses are experiencing uncertainty regarding the implications of using these tools in the workplace. One thing is for certain: the impact of online Social Networking is far-reaching and presents a range of challenges and opportunities for most organizations. Given the explosive growth of Social Networking sites, such as Facebook, LinkedIn, Twitter, YouTube and others, now is the time for companies to establish policies regarding their use in the workplace. Social Networking holds great promise for improving corporate communications and addressing business opportunities. Businesses can benefit in a myriapd of ways from the use of Social Networking websites. For example, companies can build awareness of their organizations, become more visible to prospective clients, maintain contacts with business...

Futures Magazine to host 7th I-Trade Show
Member Announcements
June 17, 2010
3 min read

Futures Magazine to host 7th I-Trade Show

For Immediate Release Futures Magazine to host 7th I-Trade Show CHICAGO, IL (June 17, 2010) – Futures Magazine, a Summit Business Media publication, will be hosting its seventh edition of the Futures I-Trade Show this June 22nd and 23rd. Spotlighting both time tested and innovative approaches to trading, the I-Trade Show is for all traders of futures, options, forex and stocks and offers attendees the benefits of a physical conference and tradeshow from the comfort of their desk. “The I-Trade Show offers cutting-edge opportunities to showcase the newest trading tools, demos, products, ideas, and success stories,” Group Editorial Director Ginger Szala remarks. “The trading industry is one that is always on the move, and many traders do not have the option to leave their desks. Rather than have traders come to us, we bring the markets to them, providing the opportunity to learn new strategies and insights without paying for...

By NIBARead article
Secret to Success: Integrity - NIBA Chairman's Letter June 2010
NIBA Briefings
June 15, 2010
3 min read

Secret to Success: Integrity - NIBA Chairman's Letter June 2010

Integrity: (i) Consistency of actions, values, methods, measures, principles, expectations and outcomes; (ii) The quality of having an intuitive sense of honesty and truthfulness… Source: Wikipedia, 2010 At the recent NIBA and CTA EXPO events in New York, I met successful IBs and CTAs from all over the country. I sat in on at least a dozen panel discussions and expert presentations. And I re-connected with scores of old friends, many of whom I see regularly at NIBA meetings. When I returned home to Chicago and had a chance to think about all those conversations, it struck me that each one of the people I talked to or heard from in a session was unique, enthusiastic and successful. I started to wonder if there could be one characteristic, one trait these people had in common. Was there one thing each of them possessed or was doing that that led to...

By NIBARead article
Old Rules - New Interpretations: Speculative Position Limits
June 15, 2010
6 min read

Old Rules - New Interpretations: Speculative Position Limits

Due to the rapid rise and rapid fall of the crude oil market in 2008, the CFTC has recently proposed a new rule on speculative position limits for the energy markets. Numerous comments have been sent to the Commission and the debate is ongoing over the economic, legal and philosophical merits of imposing position limits on these very liquid markets. It’s all very interesting and important, but rather than debating the merits of these proposed rules, in this article, I would like to demonstrate for you that the current rules on speculative position limits can have unusual and surprising consequences when the regulators apply their own interpretation to the application of these rules. Speculative position limits have been part of the futures regulatory environment since 1938 and they are incorporated into the Commodity Futures Modernization Act of 2000. The stated purpose of position limits is to curb excessive speculation and...

By NIBARead article
Times Like These Try a Broker's Soul: NIBA President's Message June 2010
NIBA Briefings
June 14, 2010
3 min read

Times Like These Try a Broker's Soul: NIBA President's Message June 2010

The month of May was a treacherous one; continuing concerns over sovereign debt, the stability of the Euro, North Korean saber rattling, and the sustainability of the economic recovery - not to mention the frightening "Flash Crash" of May 6th caused a very volatile market environment. For half the month I was on vacation in Europe. While on this “vacation”, I found myself monitoring the markets nearly 7/24 on my Blackberry and running up a $1,800 cell phone bill. Such is the life of a broker in the 21st century! It is times like these that try a broker’s soul. Risk, drawdowns, and of course, client relations and retention are a natural part of every broker's job. These elements and a month such as we just experienced are also a test of fire, a test from which many brokers never recover. It is the management of these factors that determines...

By NIBARead article
NIBA Members Submit Your Press Releases
Member Announcements
June 14, 2010
1 min read

NIBA Members Submit Your Press Releases

As a new NIBA member benefit, we welcome press releases from all member IBs, CTAs, member FCMs, Exchanges and Service Providers. Member Announcements will be featured and archived in the NIBA Journal section of the website and it's own NIBA Member Announcements category. NIBA Member Announcements are also included in the NIBA Journal eNewsletter sent to over 4000 recipients. Submitting Your Announcement Submit your press release by sending a Word document to theniba@gate39media.com. Press releases will generally be posted within 5 days of receipt. A link to your website and logo is also allowed. Logo must be sent in JPG, GIF or PNG format. There is a limit of 2 press releases per month. The NIBA reserves the right to refuse or remove any announcement at its discretion. Announcements should be newsworthy and not of a pure promotional nature. This benefit is available to all NIBA Members. Many news sites...

By NIBARead article
Electronic Execution Risks
Trading Technology
June 14, 2010
3 min read

Electronic Execution Risks

When you opened your futures trading account, when you took delivery of your electronic execution software, signed up for internet service, did you read all the contracts you signed? Successful trading is about the creation of profitable strategies that minimize the risk of loss. Very few of us read the contracts to which we agree. Computers and click through contracts have become so integrated into our lives, and they work so well, we do not read them. We forget about the risk of failure or malfunction associated with computers. Under the open outcry method of order execution we used a telephone to call orders into the market. Responsibilities and risk of loss were easily and clearly defined. Although not easily assigned. As volumes and volatility increase, the risk of loss increased. Firms established methods to fix the risk, recording devices were installed on all order phone lines, some firms had...

By NIBARead article
Due Diligence Guide to Cash Management
Operations
June 13, 2010
3 min read

Due Diligence Guide to Cash Management

Few aspects of hedge fund due diligence deserve more attention – and receive less – than cash management. Historically, fund managers and investors have focused their evaluations on other, more glamorous parts of a fund’s assets and operation. For some funds, cash balances often represent a substantial percentage of the fund’s total assets. For others, the cash component may be a less significant percentage of the total. In every case, however, it is imperative that fund managers – and their investors – know at all times where that money is being held, the safeguards in place for those cash balances and the investment returns those balances are generating. Making certain that a fund’s unencumbered cash assets are kept as safe and secure as possible should be among a fund manager’s most important responsibilities. This has been underscored by the separate pronouncements in early 2009 by three highly respected and objective...

By NIBARead article
Net Capital and Reporting Requirements for IIBs
May 24, 2010
4 min read

Net Capital and Reporting Requirements for IIBs

Independent Introducing Broker Net Capital Requirements Independent Introducing Brokers ("IIB") or non-guaranteed Introducing Brokers have a capital requirement mandated by the NFA Rules and CFTC Regulations. The following will discuss such capital requirements and reporting requirements of an IIB. Required Financial Statements IIBs are required to maintain an accounting system which records all of the IIB's financial activity. The financial statements created from the accounting system must be prepared following U.S generally accepted accounting principles ("GAAP"), on an accrual basis, and kept current. Net Capital Net Capital is generally defined as Assets less Liabilities. However, NFA financial requirements and CFTC Regulation 1.17 requirements are much more restrictive than GAAP. CFTC Reg. 17 specifically identifies Net Capital as Current Assets less Liabilities. Moreover, the CFTC further defines (much more restrictive) what is considered a Current Asset towards the IIBs Net Capital. To calculate Net Capital, per CFTC Reg. 1.17, only Current...

By NIBARead article
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