NIBA Journal

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

January 7, 2017

Seven of the Most Noteworthy Trading Days of 2016

With the big changes of 2016 still fresh in our memories, we take a look back at the year’s seven most interesting trading days to review what we may have learned (or not) about managing risk. The U.S. elections and UK’s Brexit referendum highlighted the need to manage political event risk, especially since opinion polls proved unusually unreliable. Monetary policy was on the move around the world. Following the Bank of Japan’s (BOJ) surprise move into negative rates at the end of January 2016, the European Central Bank (ECB) pushed further into negative rate territory in March 2016. In contrast, the U.S. Federal Reserve (Fed) hiked rates in December 2016 for only the second time since the financial panic of 2008. With the unemployment rate below 5% and inflation creeping higher, the Fed signaled that more rate hikes are to come in 2017. Gold was challenged as sentiment rose that...

December 2016 Housekeeping, Reminders and Updates

COMMODITY FUTURES TRADING COMMISSION Inter-Affiliate Swaps Transactions No-Action Extension The Commodity Futures Trading Commission (“CFTC”) announced the extension of relief outlined in Letter 15-62 and Letter 16-81 until December 31, 2017. Non-U.S. jurisdictions are still constructing mandatory clearing regimes. The no-action relief extension allows for market participants to more easily satisfy clearing and trade execution requirements while foreign jurisdictions implement these regimes. Additional details regarding the no-action relief extension are available on the Ruddy Gregory, PLLC (“Ruddy Gregory”) website. Risk Disclosure Requirements No-Action Relief Granted In a no-action letter dated November 30, 2016, the CFTC granted the request by futures commission merchants and introducing brokers to combine risk disclosure statements for non-intuitional customers into a single document. The consolidation of the two separate but similar forms formerly required is expected to reduce customer confusion and provide a more efficient process for industry firms. Additional details regarding Regulation 4 rules amendments...

Member Announcements

December 14, 2016

1 min read

NIBA Election Results-2016

At the December 1 meeting of the Board of Directors, the NIBA elected the following officers for 2017: President - Mike Burke, Highground Trading Vice-President - Shane Stiles, Gate 39 Media Vice-President/Secretary - Ryan Griffeth, Postrock Brokerage Treasurer - Mike Coglianese - Michael Coglianese, CPA Past President - John Jensen, Heritage West Financial Immediate Past President - Steve Petillo, Nevermore Alternatives NIBA officers also serve as the Executive Board of the Association. Melinda Schramm, MHS Capital Resource serves as the Chairman of the Board. John Jensen was elected by the membership to serve a one year term on the board. All other members remain for the year 2017. Committees for 2017 are being formed during December and will be announced in the January newsletter.

December Chairman's Letter

The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails. William Arthur Ward, 1921-1994 William Arthur Ward was an American writer, author and editor of the Pertinent Proverbs column which appeared weekly in the Ft. Worth Texas Star-Telegram for over 40 years. Credited and quoted frequently by public speakers, I thought the above sentence was particularly applicable to the events of 2016, and to how industry participants will be adjusting to the possible changes 2017 will bring. With a change of administrations, the agenda at the CFTC is likely to change too. Commissioner Massad, a Democrat and current chairman, is overseeing an agenda which includes AT registration and position limit proposals -- both of which have been heavily scrutinized, and often criticized by the industry. Additionally, The White House will have the opportunity to nominate candidates to fill the two currently vacant positions....

NIBA Advisory Group Recap

On November 30, the NIBA Advisory Group (AG) met in Chicago. The AG is a group of industry participants, each of whom has expertise in a specific area of the business. Expertises range from marketing to education, from legal to cybersecurity. This group met for the first time in 2015; members committed to a 2-year term. The mission of the AG is to share ideas for the growth and continued relevance of the NIBA. As a result of the first AG meeting held in December, 2015, the following three suggested topics were selected by the NIBA Board of Directors to implement because of their value to association members, and reasonable cost/speed of implementation. Intern Program: We are currently working with De Paul University, Chicago to place students with NIBA members and service providers. Jerry Nolan (jnolan@countycorkllc.com) and Tom Sandy (ts@ricedairy.com), Co-chairs. Resource Program: In the past year, we opened a...

NIBA SoCal Program Save the Date

February 23, 2017 - Newport Beach, CA -- Sunny southern California in late February -- what could be better? Mark your calendar now for the NIBA 2017 Winter Membership Meeting, February 23 at the Newport Beach Marriott, Newport Beach, CA. A networking cocktail reception immediately follows the business meetings. This afternoon of education includes a presentation by Erik Norland, CME Group discussing the affect of various 2016 events, including Brexit, US trade policy and immigration reform on the markets and on our businesses. Additional sessions to be announced. This event is sponsored by the CME Group; sessions also sponsored by Phillip Capital USA. Registration will open on the NIBA website in early January, 2017. Questions/suggestions: please contact John or Ralph, NIBA Co-chairs. John Jensen, jjensen@hwfi.com Ralph Preston, rpreston@hwfi.com

By NIBARead article

Benjamin Franklin on Cybersecurity (sort of)

December 14, 2016

2 min read

Benjamin Franklin on Cybersecurity (sort of)

When Benjamin Franklin coined the phrase “an ounce of prevention is worth a pound of cure,” he had fire safety in mind. Cybersecurity wasn’t on anyone’s radar. In fact, radar wasn’t on anyone radar. Nonetheless, that adage perfectly captures the importance of training staff members on cyber risks today. Employee cyber awareness is based on common-sense principles that are generally easy to implement and can save a firm from massive headaches. While the technical challenges of cyber protection fall largely to the IT staff, a firm’s rank-and-file computer users stand as the front line of cyber defense. A single employee who is uninformed or careless about cyber policies and procedures can scuttle the best practices of IT, management and an otherwise diligent staff. It is estimated that two-thirds of all data breaches are caused by current or former employees. A good cybersecurity training program reinforces the obvious – use complex...

Great Lakes Credit Union Resources

Financial Fitness Budgeting Tools Buying Your First Home Video Series Credit Report Reviews Car Buying Toolkit College Resource Center Mortgage Checklist There are several ways to contact a GLCU representative for follow up information:https://www.glcu.org/about-us/contact/

Decoding the Myths of Managed Futures 2015

From presenting at more panel events, instructing workshops on alternative investments and teaching my managed futures/ global macro course at DePaul University in the last several years, I found it was time to update the original paper written in 2011 with additional myths added to the list. The demand for alternative investments continues to grow as investors are seeking more ways to decrease their correlation risk and tail risk of their portfolio. After the dot com bubble and the recession in the early 2000s more investors realized the need for wider diversification beyond stocks and bonds. More recently since the financial crisis the demand to reduce correlation risk and tail risk continues to grow. Managed futures (AKA Commodity Trading Advisors), a subset of alternative investments and sometimes categorized under global macro hedge funds continues to grow in popularity. However, many old myths still persist about the investment product, the managers...

Spreading European and U.S. Volatility Index Futures

It has been three years and twelve articles since I began writing the VSTOXX® newsletter. Timing seemed right (and perhaps 3 is a Fibonacci series inspired moment) to update the data of some of my past articles. Upcoming newsletters will include updated articles as well as new articles. This article updates Spreading European and U.S. Volatility Index Futures I wrote in August 2013. Liquidity is always important to an investor or trader. Table 1 gives readers an overview of the VSTOXX® Futures liquidity over the last years. Table 1: VSTOXX® Futures yearly volume and open interest as of March 2016. Source: Eurex’s Exchanges monthly statistics Zoom Chart 1: VSTOXX® and VIX daily spot prices and the VSTOXX® / VIX daily spot spread price 1 June, 1999 to 5 April, 2016. Source: Bloomberg data. In Chart 1, VSTOXX® spot trades at an average premium to VIX spot of 4.37 (with a...

By NIBARead article

Page 42

NIBA Journal

Seven of the Most Noteworthy Trading Days of 2016

December 2016 Housekeeping, Reminders and Updates

NIBA Election Results-2016

December Chairman's Letter

NIBA Advisory Group Recap

NIBA SoCal Program Save the Date

Benjamin Franklin on Cybersecurity (sort of)

Great Lakes Credit Union Resources

Decoding the Myths of Managed Futures 2015

Spreading European and U.S. Volatility Index Futures

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