NIBA Journal

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

August 25, 2016

NFA Notice to Members

On August 24, 2016, NFA notified members that effective 2017, they will institute electronic voting. An essential component of the new process is the designation of your Executive Representative - the only person from your firm who will be allowed to cast votes in the contested NFA director elections, and to submit nomination petitions. NIBA supports this initiative. Mike Burke, IIB representative to the NFA Board presented both the idea of electronic voting and a designated firm rep to NIBA Board Members when he was first elected -- it received an unanimously positive response. NIBA believes NFA's new process for handling the nomination and voting process for NFA directors and amendments assures that members positions and opinions are accurately reflected and counted. Please click here for link to full NFA Notice

By NIBARead article

NIBA’s First-Ever Compliance Debate - September 14th

August 25, 2016

1 min read

NIBA’s First-Ever Compliance Debate - September 14th

Do you occasionally feel like there is a huge “gray area” surrounding a regulation? Did you ever think there must be a second or even a third way to approach compliance with a particular rule? Inspired by this year’s Presidential Debates, the NIBA is hosting our first-ever compliance debate! On September 14, during this year’s 25th Anniversary Conference, regulators, attorneys, compliance consultants and industry representatives will take the stage to debate the Pros and Cons of issues where multiple rules could apply, or there just might be more than one way to comply with regulation. We have an all-star line up to represent all aspects of the industry. NFA, CFTC and CME are all participating from the regulatory side of the business. Expert consultants and top industry attorneys will be among the "debaters" along with industry participant representation. This final presentation of the morning’s program promises to be informative, lively,...

Housekeeping, Reminders, and Updates

Mark E. Ruddy, Esq. and Elizabeth A. Cannon August 24, 2016 NATIONAL FUTURES ASSOCIATION NFA Updates Self-Examination Questionnaire for FCMs, FDMs, IBs, CPOs and CTAs On August 15, 2016, the National Futures Association (“NFA”) announced updates to its Self-Examination Questionnaire. On an annual basis, NFA member futures commission merchants (“FCMs”), forex dealer members (“FDMs”), introducing brokers (“IBs”), commodity pool operators (“CPOs”), and commodity trading advisors (“CTAs”) have an obligation to review their operations using this questionnaire. The NFA’s Self-Examination Questionnaire is a helpful tool for members to use in order to satisfy the NFA’s obligations and continuing supervisory responsibilities under NFA Compliance Rules 2-9, 2-36, and 2-39. Additionally, the NFA has included a Forex Electronic Trading Systems section in its Supplemental Questionnaire for IBs, and has included technical clarifications within the financial section of the Supplemental Questionnaire for CPOs. For a description of all recent updates, see the first page...

By NIBA

CFTC & SEC Registration Considerations for Private Fund Managers

August 23, 2016

29 min read

CFTC & SEC Registration Considerations for Private Fund Managers

Nicole M. Kuchera and Joseph M. Mannon, Vedder Price August 23, 2016 This article provides a simple three step guide to registration considerations for managers of various types of private fund vehicles, such as for hedge funds, fund of funds, private equity funds, venture capital funds, real estate funds and commodity pools. Registration considerations under both the Commodity Exchange Act of 1936, as amended (the “CEA”), and the Investment Advisers Act of 1940, as amended (the “Advisers Act”), are outlined below. Registration considerations for non-U.S. jurisdictions are not addressed in this summary. The following discussion is provided as a source of information only and is not intended to be comprehensive or constitute legal advice. STEP 1: WHAT WILL YOU INVEST IN? Private funds can invest in a wide variety of investment products. It is therefore important to understand the scope of your firm’s investments before analyzing the potential registration considerations.[1]...

DePaul NIBA Conference Review

CTAs- do your Due Diligence priorities line up with those of your next prospective allocator? The NFA? What keeps CMEGroup’s Chief Security Officer up at night? Why does DePaul University include Cybersecurity in their Master of Science in Enterprise Risk Management program? These issues and more were addressed by at last month’s NIBA/ DePaul University conference. Valuable perspectives and harrowing experiences were shared by highly qualified panelists from legal, compliance, cap source as well as directors at the NFA. The NIBA will be launching its new members only portal mid September and will be featuring the video of this conference within the portal. If you missed the event or would like to review an topic that was discussed we invite you to sign up for the members portal and gain full access. Efficiently leverage your discovery through the NIBA.

August's Chairman Letter

Teamwork: Cooperative or coordinated effort on the part of a group of persons acting together in the interests of a common cause. Dictionary.com Teamwork is one of the great strengths of the NIBA. For 25 years, the Association’s team members have worked together to further the interests of the professional derivatives community -- to keep it strong, to make it’s voice heard and, at times, to even ensure its relevancy. Much of the success of the NIBA is due to the contributions of its team members. From the very first board meeting in May 1991, the CME Group has been one of NIBA’s most valuable team members. With their help and that of the Chicago Board of Trade, New York Mercantile Exchange and Kansas City Board of Trade - now all part of the CME Group, the NIBA presented our first member meeting. This September 14, the CME Group will...

Life of a Brokerage Firm - Part 2

Ron Grossman and Ryan Griffeth conducted a series of interviews discussing the various stages of a brokerage firm. Interviews are presented here in Q&A form. There are a number of participants in this article series from brokerage firms, new individual brokers and industry professionals contributing their unique opinion and expertise. <Brokerage Firm> Scott Peterson, Stewart-Peterson How did you get started in the Commodity industry? At a previous employer, while writing market commentary and advice for a magazine, it occurred to me that many farmers and ranchers needed more than published comments. (This was before internet provided information at our fingertips.) They needed one-on-one advice that is specific to their situation. Can describe the type of business you specialize in? We specialize in hedging. We enjoy helping our clients provide time for them to do what they love to do – producing commodities and products. Helping our clients with their hedging...

By NIBARead article

The CFTC Proposes Significant Relief For Non-U.S. Market Participants

August 9, 2016

3 min read

The CFTC Proposes Significant Relief For Non-U.S. Market Participants

The U.S. Commodity Futures Trading Commission ("CFTC"), which regulates commodity interest transactions such as swaps and futures contracts, has requested comments from industry market participants on its proposed amendments to CFTC Rule 3.10. CFTC Rule 3.10 sets forth the exemptions that may apply to non-U.S. market participants, and the rule impacts brokers, advisers and fund operators. The CFTC’s stated goal, subject to receiving comments, is to expand the exemptions from registration for non-U.S. firms engaged in commodity interest transactions in the U.S. on behalf of customers located outside of the U.S. The proposal also seeks to simplify the exemptions’ requirements. For non-U.S. firms, this could be a major development if ultimately promulgated by the CFTC, in that the amendments would significantly broaden the exemptions under CFTC Rule 3.10. In this Client Alert, we examine the proposed amendments to CFTC Rule 3.10 and the exemptions. In light of the proposal, a...

Life of a Brokerage Firm - Part 1

Life of a Brokerage Firm <Part One> Ron Grossman and Ryan Griffeth conducted as series of interviews discussing the various stages of a brokerage firm. Interviews are presented here in Q&A form. There are a number of participants in this article series from brokerage firms, new individual brokers and industry professionals contributing their unique opinion and expertise. <Industry Professional> James Bibbings, Turnkey Trading Partners What is the background of new IBs or brokers entering the business today? I began my career in this industry when I moved to Chicago to work for NFA in 2005. At that time the CME and CBOT were still separate and both had active (albeit slowing) floor businesses. IBs were being created by guys who could see the end of floor brokerage was near. They were coming “upstairs” to broker and to do so needed to set up CFTC/NFA member IBs. From what I recall...

Housekeeping, Reminders, and Updates

COMMODITY FUTURES TRADING COMMISSION Guidance on Clearinghouse Recovery and Wind-Down Plans On July 21, 2016, the CFTC announced the publication of guidance to clearinghouses on recovery plans and wind-down plans, CFTC Letter No. 16-61 (“Letter 16-61”). The subject of Letter 16-61 is recovery plans and wind-down plans maintained by derivatives clearing organizations (“DCOs”) and tools for the recovery and orderly wind-down of DCOs. Pursuant to CFTC Regulation 39.39(b), DCOs are required to adopt and maintain recovery and wind-down plans. The purpose of the plans are to detail how the DCO intends to maintain a viable plan for: the recovery or orderly wind-down necessitated by uncovered credit losses or liquidity shortfalls; and for recovery or orderly wind-down necessitated by general business, operational or other risks that are a continued threat to the company. As stated by the CFTC in Press Release PR7409-16, the development of the recovery plan (“Recovery Plan”) and/or...

By NIBARead article

Page 46

NIBA Journal

NFA Notice to Members

NIBA’s First-Ever Compliance Debate - September 14th

Housekeeping, Reminders, and Updates

CFTC & SEC Registration Considerations for Private Fund Managers

DePaul NIBA Conference Review

August's Chairman Letter

Life of a Brokerage Firm - Part 2

The CFTC Proposes Significant Relief For Non-U.S. Market Participants

Life of a Brokerage Firm - Part 1

Housekeeping, Reminders, and Updates

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