INTRODUCING BROKERS An October 31, 2014, Notice to Members, Notice I-14-27, announced that all introducing brokers (“IBs”) financial reports are now required to be filed electronically, this includes the annual certified reports. This is a result of the National Futures Association’s (“NFA”) amendment to Section 5 of the NFA Manual. Section 5 outlines the financial requirements for Member IBs. The amendment to the financial requirements includes the annual certified FOCUS reports, submitted by IBs that are also broker-dealers, and is effective October 31, 2014, for reports filed through the WinJammer filing system and the NFA’s EasyFile system. The WinJammer system....
November Chairman’s Letter
This month marks the initiation of CFTC Regulation 1.22 implementation, often referred to as the “residual interest” rule. On November 14, the deadline for FCMs to post their own capital into customer segregated accounts which require additional margin moves to 6:00 pm ET on the settlement date. Obviously, this affects the deadline for your customers to increase their own funds. This past July and at our annual member meeting in September, NIBA presented several workshops explaining the requirements of this rule and its possible effects on your customer and FCM relationships. Please contact your FCM directly if you have questions,....
5 Things Your Mother Never Told You About Your Reputation
How reputation management works and why you need to work yours! I admit I was that mother that told her children, “It doesn’t matter what other people think about you. It just matters what you believe about yourself.” I was wrong. Perception lives in the minds of the people we encounter – our clients, colleagues, managers, brokers, etc. – and their perception of who we are and what we have to offer directly influences their willingness to give us what we want. Do your clients consider you trustworthy, knowledgeable and confident in your recommendations? Or, do they see you as....
2014 NIBA Board of Directors Nominations
NIBA BOD Nominations The National Introducing Brokers Association nominates the following association members for positions to the Board of Directors. Nominees For Additional 3 Year Term: Ralph Preston: Asoociated Person, Heritage West Financial, Inc. (HWFI), San Diego, CA. Ralph has served on the NIBA Board of Directors for the past three years. He is the Committee Chairman, Service Providers and Joint Chairman, southern California membership meeting. Ralph has been registered with HWFI since 2003 and has been a principal of the firm since 2005. If no additional names are nominated, the above are deemed elected within 15 days of this....
Ask the NFA
As your industry advocate, the NIBA provides many services which help your business stay in compliance with NFA regulations. “Ask the NFA,” is the way you can ask questions about those regulations and compliance requirements without having to call NFA directly. Just email us at [email protected] and we will get the answers for you. Please keep in mind the purpose of this contact is to keep the lines of communication between NFA and NIBA members open, not to fix any specific individual concerns. This month’s questions were selected from those submitted by NIBA members over the last two months. The....
Master of One: The Specialist CTA
Over the past 10-20 years the client/broker relationship has fully evolved from a transactional one to a consultative one and appropriately to the client’s benefit. Where commissions and fees used to be major elements of the sales cycle, now portfolio construction and access to alpha are key selling points toward attracting and maintaining investors. This combined with an expanding universe of managed futures investments to choose from have brokers and advisors, now more than ever, charged with sourcing new and differentiated Commodity Trading Advisor (CTA) strategies and then building balanced, stable portfolios out of them. Given this evolution and for....
Big Trends in Big Data:
Reprinted with permission from DePaul Business Exchange. © 2014 by DePaul University Driehaus College of Business. All rights reserved. Ninety percent of the data that exists in the world today has been created since 2010. The consulting firm IDC predicts that by 2020 this digital universe will expand by a factor of 300, from 130 to 40,000 exabytes. How much is that? One exabyte has 18 zeros behind it. In people terms, that’s more than 5,200 gigabytes of data for every man, woman and child on Earth by 2020. Consumers are the main source of....
Market Data Fees – An Opinion
As the NIBA has been reporting since last November, the CME Group is discontinuing the current market data waiver effective January 2015. For many members of the NIBA and traders at large, the financial impact could be devastating. The Zaner Group, a longtime member of the NIBA located in Chicago, is a well established IB. They are a good example of what I consider to be a traditional IB model. The knowledgeable brokers have personal relationships with their clients and offer a variety of services. Matt Zaner, CEO of Zaner Group, shared a breakdown of costs associated with the platforms....
Recent Changes to the U.S. Tax Laws and Their Impact
Four years ago in 2010, Congress enacted new tax legislation that only recently came into effect. This article briefly discusses two additional U.S. tax regimes arising from such new tax legislation: (i) the 3.8% net investment income tax plus the additional 0.9% Medicare payroll tax; and (ii) the 30% withholding tax under the Foreign Account Tax Compliance Act. These additional tax regimes have the effect of increasing the effective tax rate of individual taxpayers, and creating additional administrative responsibilities for withholding agents with respect to identifying payees, withholding taxes on amounts paid to payees, and reporting payee information to the....
Housekeeping, Reminders and Updates–Oct 2014
New Self-Executing Registration Relief for Delegating CPOs On October 15, 2014, the Division of Swap Dealer and Intermediary Oversight (the “Division”) of the Commodity Futures Trading Commission (“CFTC”) issued CFTC Letter No. 14-126 (“Letter 14-126”). Letter 14-126 grants self-executing no-action relief from the requirement to register as a commodity pool operator (“CPO”) under the Commodity Exchange Act (the “CEA”) to persons that have delegated certain of their responsibilities as a CPO (“Designating CPO”) to another person that is registered as a CPO (“Designated CPO”), such that the Designated CPO will serve as the CPO of the pool in lieu of....