NIBA Journal

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

Rule Submission Letter Regarding CFTC Rule 1.71
MF Global Updates
June 1, 2012
3 min read

Rule Submission Letter Regarding CFTC Rule 1.71

by Email June 1, 2012 Mr. David Stawick, Secretary Commodity Futures Trading Commission Three LaFayette Centre 1155 21st Street, NW Washington, DC 20581 Re: CFTC Rule 1.71 - Conflict of Interest Policies and Procedures by Futures Commission Merchants and Introducing Brokers: Scheduled to be Effective June 4, 2012 Mr. Stawick: I write in behalf of the National Introducing Brokers Association (NIBA). Founded in 1991, the NIBA represents Introducing Brokers, Commodity Trading Advisors and Associated Persons who are primarily engaged in the retail sector of the futures and options business. NIBA, a not-for-profit association, also has the support of 11 major Futures Commission Merchants and all the U.S. domestic exchanges. I write in behalf of our Introducing Broker (IB) membership, both Guaranteed IBs (GIBs) and Independent (IIBs), with regard to Rule 1.71 concerning conflicts of interest policies and procedures as they relate to research, advice and recommendations to the public. NIBA...

By NIBARead article
Respected Energy and Commodity Analyst Phil Flynn joins The Price Futures Group, Inc.
Member Announcements
May 31, 2012
2 min read

Respected Energy and Commodity Analyst Phil Flynn joins The Price Futures Group, Inc.

CONTACT Susanna W. Jung Executive Vice President and Chief Operating Officer The PRICE Futures Group, Inc. Phone Number 800-769-7021 FAX Number 312-264-4303 Email Address sjung@pricegroup.com Website URL www.pricegroup.com Chicago, IL - June 1, 2012 The Price Futures Group, a division of Price Holdings, Inc., an employee-owned company, is very pleased to announce that Phil Flynn, internationally televised oil and commodity market analyst, and his team, are joining the firm. Phil is one of the world’s leading energy and general market analysts, providing investors, professional traders, and institutions with his up-to-the minute advice for over 25 years. Phil’s accurate and timely forecasts have come to be in great demand by industry and media worldwide. He is also a daily contributor to Fox Business Network where he provides daily market updates and analysis. Phil’s daily commentary is featured in Futures Magazine, International Business Times, 312 Energy, Enercast, among many others. Mr. Flynn...

MF Global General Unsecured Claim Filings Due June 2, 2012 | Many IBs Should File
MF Global Updates
May 22, 2012
3 min read

MF Global General Unsecured Claim Filings Due June 2, 2012 | Many IBs Should File

Many introducing brokers have general unsecured claims against MF Global Inc. Such claims must be filed with the trustee by 11:59 PM Eastern Standard Time on June 2, 2012. The claim form can be downloaded in .pdf format from the trustee's website at www.mfglobaltrustee.com and may be filed either electronically by sending the form into the trustee's e-mail account at mfglobalclaims@epiqsystems.com or by mailing the form in to the address shown on the claim form. If the claim is sent to the e-mail address then the claimant should immediately receive a bounceback e-mail message indicating that the trustee received the e-mail. Although the bounceback e-mail message does not provide any information specific to the claim filed, in conjunction with the claimant's outgoing message the claimant can keep the bounceback message as a record that the e-mail with the filing was made in a timely manner. Typical introducing broker claims that...

By NIBA
Chairman's Message | May 2012
Member Announcements
May 1, 2012
2 min read

Chairman's Message | May 2012

Dear Members - Thank you to everyone who attended our April 18th Member Meeting in New York City. Over 130 IBs, CTAs, APs and FCMs attended the event which was held at the NYMEX Building. During the meeting sessions we were reminded that June 2nd is the final date for general creditors to file claims in the MF Global bankruptcy. Some companies are buying brokers claims. During the Legal Update Session, we talked about the form the offers are taking and the specifics to look out for if you wish to sell your claim. Neal Stevens’ article in this month’s newsletter provides a short summary of that discussion. We also discussed regulatory changes from the CFTC and NFA which are currently being made in response to the MFG debacle. As they begin to take effect, we will update you. Each of the sessions included valuable ideas presented by experts in...

By NIBARead article
Conflict of Interest Rules
Marketing
May 1, 2012
4 min read

Conflict of Interest Rules

Conflict of Interest The CFTC has adopted Rule 1.71. The Rule pertains to Conflict of Interest and will require most CFTC registered firms to implement a “Chinese wall” between the research department and non-research departments, and will therefore mainly impact the business trading unit or clearing units at futures commission merchants and introducing brokers, as applicable. The rule goes into effect June 4, 2012. Specifically, the CFTC put restrictions on who may have a relationship with the research department, who may communicate with the research department, and how the compensation for research analysts may be determined. Furthermore, there are new disclosure requirements for research reports, a prohibition of the promise of favorable research, and a prohibition on retaliation against research analysts for unfavorable research reports. In order for small IBs to have a more manageable level of burden in meeting any conflict of interest requirement, the CFTC has implemented an...

By NIBARead article
Recap: “Forex Exchange Traded or Cash?” - April 18, 2012, New York City Conference
Marketing
May 1, 2012
2 min read

Recap: “Forex Exchange Traded or Cash?” - April 18, 2012, New York City Conference

The kick-off session at the April 18, Spring NIBA meeting in New York City was concentrated on Forex Transactions. The panel was sponsored by the CME Group and included Craig LeVeille, Executive Director, FX Products, CME Group, Steven Hatzakis, Steven Joseph Hatzakis, CTA and Raphael Savrnoch, Vice-President, Business Development, Alpari US. In the audience interactive discussion, we focused on four specific areas: 1. FX Market Developments in General 2. Challenges with both Forex OTC and Forex Futures 3. Reasons to Trade Spot FX On-Exchange 4. Reasons to Trade FX Off-Exchange The panel reported results of recent surveys which indicate that Spot Forex appears to be the most popular and fastest growing segment of foreign exchange. Spot FX on-exchange offers the reputation and creditworthiness of an exchanged-traded product, while off-exchange FX can provide the customized contract sizes and competitive pricing desired by some traders. From either point of view, the point...

Interconti Limited | May 2012 - Focus on the Membership
Focus on the Membership
April 30, 2012
5 min read

Interconti Limited | May 2012 - Focus on the Membership

Primary Business Operating under a “Service Bureau” business model, Interconti provides Marketing, Research and Consulting services to the investment industry, specializing in, but not limited to, futures and managed futures products. As we don’t operate in a brokerage capacity, we don’t deal with end-users, preferring to operate on a strictly “B2B” basis. We view our primary market as smaller retail FCMs and IBs who desire to offer managed futures product/exposure to their clients but to do so without undertaking the potentially substantial capital allocation normally required, searching out appropriate internal department-head talent and suffering the almost inevitable reticence of IIBs and GIBs alike to share their hard-won client information, not to mention commission income, with representatives of the parent or clearing entity. A more complete description of methodology, practices & services can be found here: http://www.intercontilimited.com/interconti_services.pdf By whom, and how was the firm started? Interconti was originally founded by Tim...

Bylaw 1101 Implications of the Recent CFTC Part 4 Changes
Marketing
April 26, 2012
2 min read

Bylaw 1101 Implications of the Recent CFTC Part 4 Changes

Recently, the CFTC issued rules to eliminate the 4.13(a)(4) exemption and add marketing and trading restrictions to the 4.5 exemption that exempted certain pool operators from registering as a CPO. Although the effective date of the 4.5 changes is still pending, entities that currently hold 4.13(a)(4) exemptions will only remain exempt until December 31, 2012. Prior to that date, exempt CPOs will need to consider whether their trading activities will qualify for an alternative exemption or whether they will need to become registered as a CPO. Another of the recently adopted changes requires an annual reaffirmation of the remaining exemptions. Exempt pool operators will have 60 days after the calendar year-end to complete the reaffirmation process. Failure to reaffirm an exemption will result in the automatic withdraw of the exemption after the 60 days. Pursuant to NFA Bylaw 1101, all NFA Members have the obligation to ensure that they are...

By NIBARead article
TelventDTN Market Update
Marketing
April 25, 2012
1 min read

TelventDTN Market Update

DTN ProphetX is the flagship technical analysis and trading package offered by TelventDTN. In serving DTN ProphetX customers around the globe, we see new requirements every day. The software must handle higher volumes in just about all markets. We also continue to encounter new demands for data and specialized product capabilities. In meeting these challenges, we continue to add access to futures markets around the globe as well as adding more and more cash pricing data in grains, energies, industrial goods and more. Through periodic releases of the software, new features are added regularly.  We continue to add content and enhance our award winning news and weather delivery, and back it all up with world class technical support. Find more information about DTN ProphetX and the rest of the TelventDTN suite of products at http://www.telvent.com/en/business_areas/   The Opinions expressed are the opinions of the author. The opinions, the trading styles,...

By NIBARead article
NIBA’s Semi-Annual Legal Review Summary
Marketing
April 24, 2012
2 min read

NIBA’s Semi-Annual Legal Review Summary

Many introducing brokers (IBs) have claims in the MF Global Inc. (MFGI) SIPA liquidation. These claims have generally been for IB proprietary funds held in MFGI segregated futures accounts and for commissions earned during October 2011, although some IBs are also evaluating the potential for other claims based on damages and lost profits deriving from MFGI's collapse. Claims for funds held in futures accounts were commodity customer claims that needed to be filed by January 31, 2012. Claims for brokerage commissions earned during October 2011 are general unsecured claims that must be filed by June 2, 2012. The MFGI trustee has indicated that he will provide October 2011 commission run statements to IBs who request them to the extent the run statements are available. Claim traders are apparently offering around 20 cents on the dollar to purchase general unsecured claims, so IBs may be able to sell their claims for...

By NIBARead article
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