NIBA Journal

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

NFA announces second New York regulatory workshop for entities that currently operate commodity pools whose exemptions expire on December 31, 2012
Marketing
September 26, 2012
2 min read

NFA announces second New York regulatory workshop for entities that currently operate commodity pools whose exemptions expire on December 31, 2012

September 25, 2012 NFA announces second New York regulatory workshop for entities that currently operate commodity pools whose exemptions expire on December 31, 2012 NFA will present an encore workshop in New York for entities that, due to the recent CFTC rule amendments, are operating or advising commodity pools that had previously been exempt from registration as CPOs or CTAs. The addition of this second workshop is in response to the significant demand for the initial workshop, which will be held on September 27. The day-long, encore workshop, presented by NFA staff and other futures professionals, will focus on the registration process, disclosure document preparation, performance reporting, financial reporting requirements, sales practices and the NFA audit process. The second workshop is scheduled for October 23, 2012, and will be held at the NYMEX Building (One North End Avenue). The fee to attend the workshop is $200. This fee includes continental...

By NIBARead article
Your FCM; Hero or Villain? Part II
Marketing
September 25, 2012
5 min read

Your FCM; Hero or Villain? Part II

Although it seems like only yesterday the National Introducing Brokers Association (“NIBA”) panel on “Assessing FCM Risk” took place over two weeks ago. If you were part of the standing room only audience thank you for attending! Your support meant a great deal to NIBA, Turnkey Trading Partners, and the other panelists. If you weren’t able to attend this year’s Chicago conference the following is a quick overview of what was discussed. If you’d like more details please see my pre-conference article “Your FCM; Hero or Villain?” or feel free to contact Turnkey Trading Partners at any time. 1. Review Previous Regulatory Violations: Remember that not all regulatory violations are created equal. As an example violations for sales practices and advertising can be much different than violations in capital sensitive areas. Investors should approach with caution firms that have previous anti-money laundering or capital level infractions. Also, always be sure...

By NIBARead article
CFTC Regulation 1.71 – Conflicts of Interest
Marketing
September 25, 2012
6 min read

CFTC Regulation 1.71 – Conflicts of Interest

The Commodity Futures Trading Commission (CFTC) recently adopted CFTC Regulation 1.71 to implement new section 4d(c) of the Commodity Exchange Act, which requires FCMs and IBs to implement a conflict of interest system and procedures with respect to its research function and its trading and clearing activities. Except as for the requirements under Regulation 1.71(d) related to clearing activities, FCMs and IBs were required to be in compliance with Regulation 1.71 by August 3, 2012. Although the final rulemaking set a June 4, 2012 compliance date, the Commission issued a No-Action letter on June 1, 2012 extending the final compliance date for Regulation 1.71(a)-(c), (e) and (f) to the August 3, 2012 date. A copy of the final regulation is available at http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2012-5317a.pdf. Under CFTC Regulation 1.71, FCMs and IBs are required to adopt written policies and procedures that are reasonably designed to ensure that the firm and its employees...

By NIBARead article
Family Farmer & Rancher Fund Applications Due
Marketing
September 24, 2012
2 min read

Family Farmer & Rancher Fund Applications Due

Following the insolvency of PFGBest, CME Group has been accepting applications from farmers, ranchers and agricultural co-operatives to register for benefits under the CME Group Family Farmer & Rancher Protection Fund. In order for CME to begin paying benefits to qualifying customers under this Fund, Applications must be received by the close of business at 5:00pm Central Time, Friday, October 5, 2012. Following the October 5 deadline, CME Group expects to pay benefits to qualifying customers in the fourth quarter of this year. The following requirements apply to be considered for benefits: The applicant must be a farmer, rancher or agricultural coop and must complete the application for the registration available on CME Group's website. The applicant must submit photocopies of appropriate tax documentation along with the application, as described in the application's instructions. The applicant must have held one or more positions in CME Group agricultural products covered by...

By NIBARead article
The PRICE Futures Group | September 2012 Focus on the Membership
Focus on the Membership
September 21, 2012
4 min read

The PRICE Futures Group | September 2012 Focus on the Membership

Primary Markets Traded The PRICE Futures Group trades and specializes in each of the domestic and global futures and options markets which include grains, softs, energies, metals, equities, currencies, and interest rates, among others. How did you get started? How did the firm get started? President & CEO, Walter Thomas Price, III, has been involved in the securities, cash commodities, and commodity futures markets for more than 40 years as both a trader for his own account and as a broker. In 1988, Mr. Price founded The PRICE Futures Group, Inc. as a full service futures and options brokerage company. Over the years, The PRICE Futures Group, along with our various associated firms, have expanded into a full service financial services business which now form Price Holdings, Inc., an employee-owned company. Does the firm provide additional services besides brokerage? As a division of Price Holdings, Inc., The PRICE Futures Group...

By NIBARead article
This Year is all About the Weather | Chicago Conference Follow Up
Marketing
September 20, 2012
2 min read

This Year is all About the Weather | Chicago Conference Follow Up

U.S. corn and soybean yields were dramatically reduced by the drought and heat wave of 2012. Hints of the drought began in mid-May as the coverage of subsoil dryness rapidly increased. Drought conditions reached a breaking point in mid-June when it became apparent that unusual warmth dating to November 2011 would continue. Close monitoring of weather and soil conditions helped our customers manage their risk leading into and during rapid upward price movements in each crop. Throughout 2012, the Pacific Ocean has warmed and the first El Niño event since July 2009 - April 2010 is beginning. Although the upcoming El Niño is only expected to be weak or moderate, it decreases the odds for a repeat drought in South America during the upcoming corn and soybean growing season. Heavy rainfall in August and early September across Argentina provide an additional hint that drought is unlikely, and t-storms in Brazil...

By NIBARead article
MF Global Trustee's Process for Reviewing IB Security Deposit Status to Gear Up
MF Global Updates
September 18, 2012
2 min read

MF Global Trustee's Process for Reviewing IB Security Deposit Status to Gear Up

The MF Global trustee will soon ramp up a process for resolving the status of IB security deposits. Many IBs had such security deposits held in MF Global commodity accounts at MF Global, and the SIPA trustee sent determination letters in mid-June 2012 denying the customer claim status of those deposits. A large number of those IBs then filed objections to those denials prior to the 30 day deadline for doing so. The trustee now has a four month window from the date of each objection filing, from mid-July to mid-November, to work to resolve each claimant's objection before each claimant could file for a more formal hearing process with the court. The resolution process during this four month window will involve direct communication between the trustee's professionals and claimants, and may involve review of facts specific to each claimant, negotiation and settlement talks. Thus, IBs who had such security...

By NIBARead article
Industry Snapshot: Introducing Broker Business Today
Marketing
September 18, 2012
1 min read

Industry Snapshot: Introducing Broker Business Today

"The information detailed below is taken from an online survey of current NFA registered Introducing Brokers (IBs) conducted in July 2012. The survey contained a series of questions ranging from operational preferences to the effects of recent devastations as a result of the MF Global, Inc., (MFG) and the Peregrine Financial, Inc., (PFG) failures on the IB community." » View Full PDF, Courtesy of CME Group

By NIBARead article
Chief Compliance Officer Requirements Become Effective for Certain FCMs on October 1, 2012
Marketing
September 17, 2012
3 min read

Chief Compliance Officer Requirements Become Effective for Certain FCMs on October 1, 2012

Notice to Members I-12-21 September 14, 2012 Chief Compliance Officer Requirements Become Effective for Certain FCMs on October 1, 2012 Effective October 1, 2012, FCMs that are currently regulated by a U.S. prudential regulator or that are also in some capacity registrants of the Securities and Exchange Commission must have a designated Chief Compliance Officer (CCO) under CFTC Regulation 3.3, and that person must also be a listed principal of the firm. In addition, those FCMs will be required to file the CCO Annual Report as of the date of the firm's first fiscal year end after October 1, 2012. This notice contains important information about listing with NFA the firm's CCO as a principal and the filing of the CCO Annual Report. Designating a Chief Compliance Officer If the designated CCO is not a listed current principal of the FCM, the FCM must file a CFTC Form 8-R for...

By NIBARead article
CFTC faults Peregrine trustee $123 million distribution plan
MF Global Updates
September 11, 2012
2 min read

CFTC faults Peregrine trustee $123 million distribution plan

By Linda Sandler | Bloomberg The Peregrine Financial Group Inc.trustee didn’t complete necessary tests before announcing a plan to distribute $123 million to customers of the defunct futures brokerage, the U.S. Commodity Futures Trading Commission said. The tests were essential because Peregrine collapsed amid a fraud and theft of money by founder Russell Wasendorf Sr., the CFTC said in a filing yesterday in U.S. Bankruptcy Court in Chicago. “The CFTC is in favor of distributing money to the debtor’s customers as soon as is reasonable and practicable,” the regulator said. “Because this case involves allegations of fraudulent books and records of the debtor’s estate, however, the CFTC believes that distributions should be made only after reasonable due diligence to ensure that the data underlying the distribution are reliable.” Peregrine filed for Chapter 7 liquidation on July 10, hours after the CFTC filed a lawsuit accusing the firm and Wasendorf of...

By NIBARead article
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