NIBA Journal

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

ICE Futures U.S. Offers Weekly Option Contracts on Sugar No. 11, Cotton No. 2 and Coffee “C” Futures
Marketing
February 14, 2012
2 min read

ICE Futures U.S. Offers Weekly Option Contracts on Sugar No. 11, Cotton No. 2 and Coffee “C” Futures

ICE Futures U.S. now lists weekly option contracts on Sugar No. 11®, Cotton No. 2® and Coffee “C”® futures contracts. The new weekly option contracts are short-life options that share most of the contract terms of the existing monthly option contracts – including strike price, minimum price quote, trading hours and exercise and assignment provisions. The weekly options, however, expire on a different date than the monthly options, providing an expiration on each Friday that is not already the expiration date for a monthly option on the relevant futures contracts. For each product, three weekly option expirations are listed concurrently, so each weekly option has a trading life of approximately four weeks. A Frequently Asked Questions document is available for the weekly options that covers, for example, how to determine the underlying futures contract for a weekly option and the naming/product code convention for the ICE weekly options. You can...

By NIBARead article
NFA Requires Updates, Disclosures and Filings from CTAs and CPOs That Managed MF Global Assets
Marketing
February 14, 2012
2 min read

NFA Requires Updates, Disclosures and Filings from CTAs and CPOs That Managed MF Global Assets

In the wake of the MF Global collapse, NFA is requiring CTAs and CPOs that managed assets at the failed FCM to make certain updates, disclosures and filings. CTAs must calculate their performance capsules in accordance with NFA Notice to Members I-12-04. That notice essentially provides that CTAs with programs involving MF Global managed accounts that were not notionally funded and that were frozen by the bankruptcy should not include the MF Global account performance in the program's track record if the program also had accounts at one or more other FCMs or if the CTA was forced to close positions and cease trading during November, 2011 after positions and margin cash were transferred. In the latter case, the track record should show "NT" for the month, and in the former case only the accounts at other FCMs should be used to calculate performance. If the program had only non-notionally...

By NIBA
CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers
MF Global Updates
February 2, 2012
4 min read

CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers

Fund Launched as Initial Step in Restoring Confidence of Market Users CHICAGO, February 2, 2012 – CME Group today announced that it will establish a $100 million fund designed to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets. In light of the recent MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country’s food producers who are using CME Group futures markets to hedge their crops and livestock that feed the world. Under the Family Farmer and Rancher Protection Fund, expected to be in effect by March 1, 2012, farmers and ranchers using CME Group products will be eligible for up to $25,000 per account in the case of losses resulting from the...

By NIBA
Trading Program Performance Calculations and Presentation by CTAs with Client Assets held at MF Global, Inc.
MF Global Updates
January 30, 2012
4 min read

Trading Program Performance Calculations and Presentation by CTAs with Client Assets held at MF Global, Inc.

Notice to Members I-12-04 January 27, 2012 Frequently Asked Questions - Trading Program Performance Calculations and Presentation by CTAs with Client Assets held at MF Global, Inc. As a result of the October 31, 2011 bankruptcy proceeding involving MF Global, Inc. (MFG), NFA has received a number of questions from CTAs regarding how to calculate and present performance information for Trading Programs with client managed accounts that were affected by the MFG bankruptcy proceeding. NFA is issuing this notice to address those frequently asked questions. 1. All of my managed client accounts were held at MFG. The open positions in those accounts were subsequently transferred to another FCM. After the transfer, I continued to trade the accounts according to the trading program. How do I reflect the performance results? Results should be based upon the assets under the CTA's control. Any customer assets that were not included in the transfer...

MF Global Trustee Continues Response to NIBA's Commission Run Request
MF Global Updates
January 26, 2012
1 min read

MF Global Trustee Continues Response to NIBA's Commission Run Request

Over 80 Introducing Brokers have contacted the MF Global Bankruptcy Trustee's office to date to request their October commission runs. The process for requesting your office run is posted in the NIBA update "IBS Granted Access to October Commission Runs" here. Introducing Brokers are able to receive their October MF Global commission runs as a result of a request made by NIBA through its legal advisors, Schuyler, Roche & Crisham, directly to the Trustee in behalf of our members.

By NIBARead article
IBS Granted Access to October Commission Runs
MF Global Updates
January 20, 2012
2 min read

IBS Granted Access to October Commission Runs

NIBA is pleased to announce that its efforts to gain the release to IBs of their October Commission Runs have been a success. In our ongoing efforts to represent our Members interests in the MF Global bankruptcy, Melinda Schramm worked with NIBA legal counsel Schuyler, Roche & Crisham (“SRC”) to send correspondence dated January 3, 2012, to the Trustee and the Bankruptcy Judge with copies to CFTC, NFA, CME and ICE (view full copy of the letter sent by SRC to the Trustee). The correspondence outlined the importance to the IB community of obtaining the October Commission Runs, for among other reasons, to facilitate the filing of accurate Proof of Claim forms with the bankruptcy court, an act necessary to recover any earned commission revenue. SRC reports that the Trustee’s attorneys understood the importance to our Members of the Commission Runs and were responsive and accommodating to NIBA’s request. Any...

By NIBARead article
Marketing Thought Leaders Join For Lively Conversation
Member Announcements
January 20, 2012
3 min read

Marketing Thought Leaders Join For Lively Conversation

New YORK, New Jersey, Connecticut, Jan 20, 2012 -- Today's web-enabled customers have taken control of their buying process, researching online before speaking with a salesperson. These buyers are more savvy and wary of marketing hype. As a result, marketing is evolving from a one-way "push" model into a two-way engagement model. Marketers must now demonstrate value and build trust by educating prospects throughout their buying journey. However, this new era of marketing is still evolving. Many marketers struggle to grasp the new concepts, terms and methodologies that make up the new marketing landscape in an effort to meet customer need. There is now a great deal of controversy on the web regarding the roles of inbound marketing and content marketing as part of the overall marketing process. How do one define them? How do they relate to one another? How does one use them to drive revenue? On January...

By NIBARead article
Coquest Inc. | Focus on the Membership. January 2012
Focus on the Membership
January 16, 2012
3 min read

Coquest Inc. | Focus on the Membership. January 2012

About the Firm: How did you get started? Founded over 20 years ago as an energy brokerage and consulting firm, Coquest has grown to include a wide range of investment products and services. Do you provide additional services besides brokerage? Managed futures products, OTC & futures hedging services, CTA/CPO media design services. What are the biggest challenges your clients face today, and how do you help them? One of the issues facing our clients involved in managed products is the correct balance and allocation of programs. With volatility at record highs, we feel it’s our responsibility to work with our clients to have a balanced approach to their investment portfolios. For our hedging clients, it has become more complicated with the huge increase in available products. We make sure we take the time to design hedging programs that may have a diverse balance of exchange traded and OTC instruments. How...

By NIBARead article
MFG Bankruptcy Highlights Regulatory Issues for Managed Futures Industry
MF Global Updates
January 16, 2012
5 min read

MFG Bankruptcy Highlights Regulatory Issues for Managed Futures Industry

The MF Global (MFG) bankruptcy has been a nightmare for managed futures customers, brokers and introducing brokers, SROs and the CFTC. The bad news keeps coming – in addition to the headaches the bankruptcy has caused the industry from an operational standpoint, we have now heard from MFG trustee James Giddens that there is the distinct possibility MFG customers will ultimately not be made whole. Regardless of whether customers are made whole, the MFG bankruptcy has highlighted important issues with respect to oversight of the industry. The three most important of these issues include (1) the design of the current SRO structure, (2) the fact that there is no SIPC-like insurance for margin in segregated accounts, and (3) the lack of resources for the CFTC. These three issues will be in sharp focus in 2012 and beyond, and it is unclear how and when Congress will act to address these...

By NIBARead article
CME Group MF Global Update: Advocating on Behalf of Customers
MF Global Updates
January 16, 2012
2 min read

CME Group MF Global Update: Advocating on Behalf of Customers

For many in the agricultural community, the failure of MF Global shook the very foundation on which the hedging industry is built. Since the beginning of this unprecedented ordeal, the CME Group has advocated on behalf of our members and customers, and we will continue doing everything in our power to ensure that another failure at the firm level does not happen again. Most important to us is that all customers affected see their property returned -- as much as possible, as soon as possible. Our work with the Bankruptcy Trustee has already helped to accelerate that process. We successfully transferred 15,000 customer accounts and $1.45 billion in the week following the MF Global bankruptcy. We also provided a guarantee of $550 million to the trustee to speed the return of funds, and pledged an additional $50 million from CME Trust. After more than two months into the bankruptcy proceedings,...

By NIBARead article
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