NIBA Journal

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

MF Global ends bankruptcy as trustee Freeh steps down
MF Global Updates
June 5, 2013
2 min read

MF Global ends bankruptcy as trustee Freeh steps down

Collapsed brokerage MF Global Holdings Ltd on Tuesday effectively ended its bankruptcy, saying court-appointed trustee Louis Freeh will step down and hand the estate's remaining wind-down duties to a new three-member board. The commodities broker, led by former New Jersey Gov. Jon Corzine, went into court-protected bankruptcy in 2011 after investors were spooked by its exposure to $6.3 billion in European sovereign debt. The company's liquidation plan put together by Freeh, a former FBI director, and MF Global's creditors, was approved by bankruptcy Judge Martin Glenn in April, and the plan went into effect on Tuesday. "With the plan approved and a new board in place, I am confident the liquidation process can be effectively administered to the satisfaction of the creditors," Freeh said in a statement. The plan could not go into effect until certain conditions were met or waived, one of which was that the estate had enough...

By NIBARead article
CME Group Customer Forum Feedback
Operations
May 21, 2013
1 min read

CME Group Customer Forum Feedback

CME Group wants your feedback on their recent Customer Forum: "In order to provide you with the most relevant and interesting updates on our technology and business initiatives at the CME Group Customer Forum, we ask that you complete this brief survey. This survey will take no more than 10 minutes of your time. For additional information or if you have any questions, please contact CME Global Account Management at +1 312 634 8700 in the United States." Take the Survey     The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading information and trading programs are not endorsed by the NIBA, but are the individual opinions, styles, information and programs of the author.

By NIBARead article
Reporting Requirements for Memorial Day
May 20, 2013
2 min read

Reporting Requirements for Memorial Day

This is a reminder that Monday, May 27, 2013 is Memorial Day. This holiday will impact your regulatory filings as follows: Daily segregated, 30.7 secured, sequestered and daily forex statements prepared as of May 24, 2013 are required to be submitted by noon on Tuesday, May 28, 2013; Daily segregated statements are not required to be prepared as of May 27, 2013; Daily 30.7 secured, sequestered and forex statements are required to be prepared as of May 27, 2013 and are required to be submitted by 12:00 noon on Tuesday, May 28, 2013. If an FCM is required to file a May 27, 2013 daily 30.7 secured or sequestered statement, it should also include the most recent segregation balances from May 24, 2013; and FCMs and RFEDs are reminded that any information filed after its due date must be accompanied by a fee for each business day that it is...

By NIBARead article
The Top 21 Chief Technology Officers in North American Electronic Trading
Member Announcements
May 17, 2013
2 min read

The Top 21 Chief Technology Officers in North American Electronic Trading

We have compiled a list of the top 21 Chief Technology Officers in the electronic trading industry, operating in North America. The 21 CTOs were selected based on a survey distributed through our Total Trading blog with the following criteria in mind: Excellence in building and maintaining technological infrastructure Respected selection of technological products Influence on the electronic trading industry We want you to gain a true insight into North America’s top technology officers, so we asked all of them the same questions: 1.) What has been your biggest achievement or accomplishment as CTO? 2.) Which future technology or advancement do you see playing a large role in the electronic trading industry in the future? 3.) What is a skill, trait, or experience that you discovered early in your career, which has enabled you to be successful today? 4.) What is a fun or interesting fact that people might not...

By NIBARead article
Outlook for IB Claims in MF Global Bankruptcy Improves, Claim Sale Opportunities Arise
MF Global Updates
May 13, 2013
3 min read

Outlook for IB Claims in MF Global Bankruptcy Improves, Claim Sale Opportunities Arise

Many IBs have general unsecured claims in the MF Global Inc. SIPA liquidation. As demonstrated by the recent sale of a large general unsecured claim at 90% of the claim amount, institutional players believe such claims have very strong prospects for recovery. For IBs, the good news is that not only is the market consensus that IBs should recover a high amount before too long but also that IBs may be able to sell their claims for high amounts. IB general unsecured claims in the MFGI bankruptcy stem from unpaid commission splits and float for October 2011 and also from security deposits. For commission splits and float, an IB's claim may be based on a payout report document that the IB has been able to request from the MFGI trustee. For a security deposit claim, the MFGI trustee has been willing to stipulate to the amount of the claim if...

By NIBARead article
A note from Jeff Malec, IIB representative for the NFA Board of Directors
NIBA Briefings
May 1, 2013
3 min read

A note from Jeff Malec, IIB representative for the NFA Board of Directors

It has been a quick three months since I was elected as the Independent Introducing Broker representative on the NFA Board of Directors, and I wanted to take a moment to thank those members of the NIBA who supported me. With just one meeting under my belt, I have begun to talk with various industry people about changes I believe need to be made at the NFA. These include better customer protections, accountability for mistakes made with MF Global and PFG, an overhaul of the promotional review process, better hiring and training for auditors, and an upgrade to the technology at NFA (who else struggles with the clunky online registration system) ? all of which I believe will make NFA not just a better self regulatory organization; but a better regulator for its members. One thing that has surprised me in my initial talks with various industry people is that...

By NIBARead article
Poll: 17.5 or 21 hour Day, What do you Say?
NIBA Briefings
May 1, 2013
2 min read

Poll: 17.5 or 21 hour Day, What do you Say?

On April 17, 2013, the CME Group reduced grain and oilseed trading hours from 21 hours to 17-1/2 hours per day. This schedule cut afternoon hours and created a 45-minute pause in trading during the morning before open-outcry trading begins. This change back to the 1:15pm close was reportedly instituted by the exchange in response to complaints the longer hours were reducing liquidity and increasing operating costs. The NIBA took no official position in January in advance of the change as it was being contemplated because we did not receive any comment or opinions from NIBA members. Board members’ opinions were almost evenly split. Since the change of trading hours took effect, NIBA has received emails from members. Again, the opinions are evenly split. Some brokers like the return to the traditional close with comments like “less hours to cover” and “we have plenty of time to get our business...

By NIBARead article
Strengthening Customer Protections Through Re-Authorization
May 1, 2013
4 min read

Strengthening Customer Protections Through Re-Authorization

Every five years, the Commodity Exchange Act must be “re-authorized” by Congress. The Senate is gearing up for that process now. We hope that strengthening customer protections will be the result of these Congressional deliberations. Re-authorization presents an opportunity to change the law which governs our industry. The primary goal of re-authorization of the Act this time around should be to remove any doubt that customers are first in line in a bankruptcy over everyone else. Congress intended to give commodity customers priority over all other creditors in a commodity broker bankruptcy. The reason for this is simple: if customers do not have priority, they are nothing more than general creditors and the segregation protection is a paper tiger. As one PFGBest customer put it at the Creditors' Committee meeting, "you mean the guy who cuts the grass at their office has an equal claim on my money?" All a...

By NIBARead article
Legal Updates for IBs, FCMs and Other CFTC Registrants
May 1, 2013
7 min read

Legal Updates for IBs, FCMs and Other CFTC Registrants

While most of the attention in the futures industry has been focused upon the new swaps regulatory framework, the Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”) have adopted several new rules governing a variety of other activities. This article discusses some of these new rules, as well as current and upcoming changes related to NFA audits of Member firms. CFTC Adopts Transaction Recordkeeping Rules The CFTC has adopted new recordkeeping rules for registered firms regarding: (1) oral communications that lead to the execution of transactions in commodity interests and (2) written communications that lead to the execution of transactions in commodity interests or related cash or forward transactions. These rules apply to different categories of market participants, depending on the type of communication and transaction. The final rules became effective on February 19, 2013, however, affected registrants have until December 21, 2013, to comply with the...

By NIBARead article
IB Certified Audits—Reporting Requirements to Keep In Mind
April 29, 2013
2 min read

IB Certified Audits—Reporting Requirements to Keep In Mind

After a busy audit season that included many new rules implemented by NFA and CFTC, we would like to share some reminders and insights. Use of Online Payment Systems If you are an IB trading Forex and use an online bill payment service such as Paypal, there is an accounting issue we have run into. Balances that are maintained in these accounts are not considered current. They must be considered a “non-current asset” on the balance sheet. Therefore, the balances in those accounts cannot be included in the Net Capital Computation. FCM Trading Accounts Balances maintained in a Futures Commission Merchant trading account not being traded at its value will be considered a security deposit (that is if no other security deposit has been made). Therefore, 50% of the balance is considered a “non-current asset” and hence, cannot be used in the Net Capital Calculation. Equity Withdrawal Restrictions Although this...

By NIBARead article
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