NFA’s Online Registration System (ORS) is the web-based CFTC registration and NFA membership application system. In order to ensure firms and individuals receive NFA communication, it is important that all ORS records are kept current and accurate, including addresses and email addresses. NFA initially collects registration information for firms using the Form 7-R and for individuals using the Form 8-R in ORS. NFA Registration Rule 210 requires that firms keep the information entered in the Form 7-R and individuals keep the information entered in the Form 8-R up-to-date. In addition, NFA Registration Rule 213 requires that each registrant and affiliated....
Industry Education Meeting
On July 19, the NIBA was invited to meet with representatives of the CFTC to discuss the status of customer education in the industry. NFA hosted the meeting in its Chicago office. Individuals from the NFA, ICE CME Group and CMC were also invited to meet the five staff members visiting from the CFTC Washington Office of Customer Education & Outreach (OCEO). The original purpose of the gathering was to share information on how various industry groups educate the customer against fraudulent practices, with a primary emphasis on how we make use of social media. The discussion eventually centered on....
Customer Due Diligence
The Financial Crimes Enforcement Network issued a final rule, to clarify and strengthen customer due diligence requirements, which became effective on July 11, 2016 for which covered financial institutions must comply with by May 11, 2018. Covered financial institutions include banks, brokers or dealers in securities, mutual funds, and futures commission merchants and introducing brokers in commodities. The rules contain explicit customer due diligence requirements and include a new requirement to identify and verify the identity of beneficial owners of legal entity customers, subject to certain exclusions. Covered financial institutions are not presently required to know the identity of the....
Housekeeping, Reminders, and Updates
COMMODITY FUTURES TRADING COMMISSION Guidance on Clearinghouse Recovery and Wind-Down Plans On July 21, 2016, the CFTC announced the publication of guidance to clearinghouses on recovery plans and wind-down plans, CFTC Letter No. 16-61 (“Letter 16-61”). The subject of Letter 16-61 is recovery plans and wind-down plans maintained by derivatives clearing organizations (“DCOs”) and tools for the recovery and orderly wind-down of DCOs. Pursuant to CFTC Regulation 39.39(b), DCOs are required to adopt and maintain recovery and wind-down plans. The purpose of the plans are to detail how the DCO intends to maintain a viable plan for: the recovery....
Life of a Brokerage Firm – Part 1
Life of a Brokerage Firm <Part One> Ron Grossman and Ryan Griffeth conducted as series of interviews discussing the various stages of a brokerage firm. Interviews are presented here in Q&A form. There are a number of participants in this article series from brokerage firms, new individual brokers and industry professionals contributing their unique opinion and expertise. <Industry Professional> James Bibbings, Turnkey Trading Partners What is the background of new IBs or brokers entering the business today? I began my career in this industry when I moved to Chicago to work for NFA in 2005. At that time the CME....
Just Following Orders
There can be no doubt about the vast, if not monumental, effect that modern technology has brought to the futures broker industry. Processes that were once the purview of man-made machinations, are now fully automated by the gently humming, and beguilingly autonomous computer processors and omnipotent trading platforms. Calculations are being made, trades entered and exited at a speed that would make Doc Brown giddy. Yet for all of this precocious computing power, there are still some elements of our trade that we may, from time to time, ply by hand. Order tickets, and time stamps more specifically, remain one....
DePaul University Derivatives Briefing Summary, NFA Cybersecurity Requirements
On July 14, 2016, NIBA hosted a cybersecurity panel focused on the new NFA requirements that became effective on March 1, 2016. Dale Spoljaric of NFA, Gil Vega of CME and Matt Kluchenek of Baker McKenzie addressed various issues and practical considerations associated with the new requirements. The panel was moderated by Jeff Henderson of Greenberg Traurig. Dale Spoljaric focused on the new requirements and the approach that NFA is taking in connection with its audit of member firms’ policies and procedures. Mr. Spoljaric emphasized that NFA plans to provide education to its members as the new requirements are phased....
The Complete IB Handbook
The Complete IB Handbook has recently been updated WWW.cmegroup.com/ibhandbook Written by Melinda Schramm, Founder of the NIBA and President of MHS Capital Resource, Inc. and sponsored by the CME Group, this guide contains eight chapters of information for the Introducing Broker on everything from how to register and what to expect at your first audit to a practical business plan and considerations for registering as a CTA. The online Handbook, now in its 6th Edition, also has a look at the current state of business of IBs in 2016 — how we continue to recover from the failures of MF....
Seasonality of WTI Crude Oil Futures
Summary WTI Crude Oil futures is currently priced around the 30-year average. This makes the market on par with the longer-term average of the front-month futures contract. The 30-, 15- and five-year seasonality averages of WTI Crude Oil front-month futures show declines in the second half of the year. The seasonality data offers evidence for crude oil to form a long-term bottom. Earlier this year, crude oil bounced off its multi-year low, and many market participants are now READ MORE _____________________________________ Mark Shore Shore Capital Research LLC Alternative Investment Research & Consulting http://www.shorecapmgmt.com https://twitter.com/shorecap http://www.linkedin.com/in/shorem Decoding the Myths....
July’s Chairman Letter
Ally: To join with another person or group to get or give support – Merriam-Webster Dictionary, 2016 NIBA is fortunate to have several incredible allies. DePaul University, our academic partner in Chicago, co-sponsored our summer briefing July 14. Over 130 NIBA members and supporters registered for afternoon business sessions which included a look at the managed futures world from a compliance and regulation point of view, and an overview of cybersecurity readiness. Articles following up on the discussions sparked by the DePaul sessions appear in this newsletter, and we’ll post the program video as soon as it is available.....