NIBA Journal

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

March 11, 2013

Chief Compliance Officer Requirements Become Effective for All FCMs

Chief Compliance Officer Requirements Become Effective for All FCMs on March 29, 2013 As we notified Members in Notice I-12-21, the Chief Compliance Officer (CCO) requirements under CFTC Regulation 3.3 became effective on October 1, 2012 for FCMs that are regulated by a prudential regulator or that are also in some capacity registrants of the SEC. The compliance date for all other FCMs is March 29, 2013. Therefore, all FCMs not subject to the October 1, 2012 compliance date must designate a CCO and that person must be listed as a principal of the FCM by March 29, 2013. Those FCMs subject to the March 29, 2013 effective date will be required to file the CCO Annual Report as of the date of the firm's first fiscal year end after March 29, 2013. This Notice contains important information about listing with NFA the firm's CCO as a principal and the...

By NIBARead article

Improving Predictability of Future Results

Focus on the Membership

March 8, 2013

4 min read

Improving Predictability of Future Results

The general industry disclaimer is "Past performance is not necessarily indicative of future results". However, what if we could identify and select CTAs with the characteristics necessary to produce "more" predictable future performance? Rather than simply chasing the hot hand, investors and allocators could improve their chances for long term success by focusing on selecting CTAs with a strong probability of repeating past performance in the future. More than 20 years ago, when Brandywine developed our Benchmark trading program, we faced the same question. How could we increase the odds that our future performance would match the past tested performance of our trading program? The answer to this question led to the development of our portfolio allocation model (elements of which are referred to today as “Risk Parity” investing). What we found was that the main characteristic necessary to improve predictability of future results is true portfolio diversification. Our research...

CFTC Filing

On Friday February 15th, the NIBA filed the following comment letter with the CFTC. It discusses a Commission proposal which, if approved, would likely affect customer margin requirements. Hedging customers would feel the result, and an IB's ability to transfer positions between brokerage houses would be severely hindered. Read the full comment letter to the CFTC filed by the NIBA John Lothian News has put together a special report on this critical issue, to view this video click here. 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.

Futures Magazine Acquired by The Alpha Pages

CHICAGO—The Alpha Pages, LLC recently acquired Futures Magazine and its digital properties, including Futuresmag.com, ResourceInvestor.com and all related e-newsletters from Summit Business Media. The Alpha Pages is a new media firm focused on alternative investments. The firm was founded and is led by Kristin Fox and Jeff Joseph, two seasoned alternative investment industry veterans. Fox has spent more than 20 years creating print and digital platforms in the alternative investment space, including HedgeWorld.com, which was sold to Reuters in 2005. Joseph was the former managing director of Alternative Investment Strategies at Rydex Investments where he developed and introduced a number of groundbreaking alternative investment products including the first managed futures mutual fund. Fox and Joseph were attracted to the Futures Magazine print and digital properties because of the quality of the content offering, the loyalty of its subscribers, the engagement metrics of the digital users and the solid 41-year-old brand....

Letter to the NIBA Membership

Dear NIBA Members - 2013 is going to be busy! Last month’s tri-sponsored get-together in Southern California was a terrific success. Fifty-five industry professionals - many at their first-ever NIBA event, gathered in Newport Beach, CA, on January 24. Along with our partners, the CME Group and the NFA, the NIBA plans to make this meeting an annual event. We are in the midst of our membership campaign, and have already welcomed 18 Vendor Sponsors to the Association this year. We have great FCM and exchange support too, and will have an updated listing next month. NIBA is proud to announce that members now have access to Great Lakes Credit Union, and to health insurance and human resources administration through Viaquest. These two member benefits can make a real difference in your office’s bottom line. The NFA has announced three new members to its Board of Directors - all NIBA...

NIBA Membership Message

Fellow brokers, “Activity begets activity”. This is a favorite phrase of mine that can be heard frequently in our office. It’s a very simple idea; it’s hardly original but very true: If you want something to happen - then start doing something. Membership in the NIBA is doing that ‘something’ that will beget growth in your business in very real, very tangible ways. Of course everyone in the IB community - member or not - benefits from the legislative, lobbying, and representational activities that the organization conducts on behalf its members. However, joining and becoming an active member in the NIBA is necessary to partake of the many benefits available in addition to these activities. One of the most important of these benefits in my opinion is the opportunity to utilize your membership in the organization as vehicle or ‘portal’ to build relationships and connections with other professionals in the...

Judge Approves Significant MF Global Settlement and Customer Distributions

On January 31, 2013, the judge presiding over the MF Global, Inc. (“MFGI”) bankruptcy approved a settlement between MFGI and its UK affiliate and also green-lighted further distributions. The trustee indicated in court that he immediately will make distributions to bring non-affiliate 4d / domestic futures customers up to a 93% level of recovery and 30.7 / foreign futures customers up to an 18% level. Additional recoveries should occur on behalf of 30.7 customers over time that the trustee expects will result in staggered distributions bringing 30.7 customers up to about 54% within a few months and then around 80% a little later. Notably, the trustee and major creditors of MFGI’s domestic affiliates have indicated in a recent court filing that they now project 100% recovery for non-affiliate commodity customers. Notwithstanding that projection from these highly sophisticated and engaged parties, the MFGI trustee appears to estimate a continued customer asset...

By NIBA

February 4, 2013

3 min read

New NFA Board Member Sets Goals

**NIBA asked all three new NFA Board Members to answer the question "What is the first thing you will do at your first NFA Board Meeting?" John submitted the following in behalf of James and himself. Jeff indicated he preferred to reach out to NFA members directly. First, we would like to thank those who supported our bid to represent CTAs and CPOs on the NFA Board of Directors We would also like to thank the outgoing members of the board for their years of service. NFA staff has been extremely helpful in bringing us up to speed on the bureaucratic machinery which directs the futures industry's SRO, which we greatly appreciate as well. We are taking special care to familiarize ourselves with the inner workings of the NFA, from its organization hierarchy to its committee structure. Achieving meaningful reform will require diligent deliberative efforts on the part of all...

NIBA Winter Conference in Southern California Re-Cap

NIBA Winter Conference in Southern California January 24, 2013 I recently had the pleasure of attending the “Winter” NIBA conference in Southern California. I genuinely struggled to type the word “winter” in the title, as the weather greeting participants was a balmy 70 degrees. I’m sure that there was a tussle back in Chicago as to who was going to represent the CME and NFA for this event! Complementing the SoCal weather was the choice of venue, Flemings Prime Steakhouse and Wine Bar. Anyone that knows the brand knows the restaurant’s service is first rate, coupled with great food and wine. We have the CME to thank for that! (NIBA Members attending the SoCal Winter Conference) More impressive than the venue was the subject matter covered. Opening remarks came from NIBA President, John Jensen. He brought up a great point that NIBA’s role for the IB community is not just...

Peregrine CEO Wasendorf Gets Maximum

CEDAR RAPIDS, IOWA — Disgraced financier Russell Wasendorf will be at least 107 years old by the time he’s eligible for release from prison under the 50-year sentence handed down Thursday in Cedar Rapids. The former head of the defunct Peregrine Financial Group futures and commodities brokerage stole $215 million from more than 13,000 customers over a 20-year period. The 64-year-old Marion native pilfered customer funds to live a lavish lifestyle and expand the business, which prosecutors said was never profitable on its own. Investor confidence in the sanctity of the $37 trillion futures market was shaken by details of the scam that were contained in suicide notes discovered after Wasendorf’s botched attempt to take his own life July 9. “This is a very serious offense with staggering affects to the victims and ripple effects,” U.S. District Judge Linda Reade said. “The sentence I impose must be a deterrent to...

By NIBARead article

Page 85

NIBA Journal

Chief Compliance Officer Requirements Become Effective for All FCMs

Improving Predictability of Future Results

CFTC Filing

Futures Magazine Acquired by The Alpha Pages

Letter to the NIBA Membership

NIBA Membership Message

Judge Approves Significant MF Global Settlement and Customer Distributions

New NFA Board Member Sets Goals

NIBA Winter Conference in Southern California Re-Cap

Peregrine CEO Wasendorf Gets Maximum

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