Prepare for 2016; NFA Examination Focus

The National Futures Association (“NFA”) Rules and Commodity Futures Trading Commission (“CFTC”) regulations that govern the futures, forex, and swap trading industry are subject to continuous interpretation, amendment, and update. Staying abreast of these changes is a critical component of maintaining regulatory and operational compliance for your next examination. NFA regularly emails member firms to advise them of pertinent rule changes, amendments, and interpretive notices. These Notices to Members are archived on the NFA website and are an excellent resource for Introducing Brokers (“IB”) and Commodity Trading Advisors (“CTA”) to stay up to date with the most recent industrywide regulation…...

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NFA announces Dashboard webinar on February 25

announces Dashboard webinar on February 25 In preparation for the launch of the NFA Dashboard, the new entryway to NFA’s Online Registration System (ORS), NFA will conduct a webinar on Thursday, February 25, 2016, at 10:00 a.m. CST. ORS is the web-based application that allows firms and individuals to apply for CFTC registration and NFA membership, and to manage their numerous filing requirements. Given that ORS is primarily a tool for Members, NFA staff solicited and received valuable Member feedback to improve the system’s usability and efficiency. The new Dashboard will summarize all of a firm’s outstanding compliance and registration…...

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Cybersecurity for IBs, CTAs, and CPOs

The NFA recently adopted an Interpretive Notice titled “Information Systems Security Programs” (Cybersecurity Interpretive Notice). This new NFA policy, which goes into effect March 1, 2016, requires FCMs, IBs, CTAs, CPOs, RFEDs, SDs and MSPs to implement a cybersecurity program in order to meet existing obligations to diligently supervise trading activities. Every registrant will be required to put in place policies and procedures reasonably designed to monitor and mitigate the risks of unauthorized access or attack on its information technology systems and to respond appropriately if such access or attack should occur. The new cybersecurity requirement is in addition to…...

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It’s a Shield, not a Sword

Brian Clark is the CEO of Ascent Technologies, Inc. (www.Ascent.is), a company that offers a compliance platform for users to help them identify, track, and manage the vast amount of regulations with which their firm has to comply. Businesses on the wrong side of the law often feel as if they’d been bludgeoned by instruments of jurisprudence, bearing a distinct scarlet letter from the administration of executive-based (re: administrative) and judicial-based (re: State/Federal Court) actions. Gone are the days of quiet settlements, and second chances: regulators in all industries increasingly look for large and small regulatory violations alike. Playing defense…...

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The CFTC’s Proposal to Regulate Automated Trading: Our Top 10 Takeaways

The Commodity Futures Trading Commission (“CFTC”) has proposed a new rule — so-called Regulation AT — to regulate the use of automated, or algorithmic, trading systems that trade commodity interests (e.g., futures and swaps).  The CFTC’s proposal comes at the end of a year that saw a noticeable increase of enforcement actions arising from disruptive trading practices, including spoofing and market manipulation, and which included the first criminal conviction for spoofing in U.S. v. Michael Coscia. In this Client Alert, we highlight the most significant aspects of Regulation AT.   1. A New Registration Mandate.  Under Reg. AT, registration will…...

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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. The answers were supplied by NFA…...

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NIBA – Get to Know the Regulator

U.S. Commodity Futures Trading Commission  Division of Clearing and Risk Who is in charge of the Division of Clearing and Risk:  DCR is run by a Director, who is assisted by the DCR Deputy Directors and Chief Counsel. Jeffrey Bandman is the Acting Director, and the Deputies and their respective branches are as follows: Eileen Donovan, Deputy Director of Clearing Policy; Sarah Josephson, Deputy Director of Product Review; John Lawton, Deputy Director of Risk Surveillance; and Julie Mohr, Deputy Director of Examinations. Robert Wasserman is the DCR Chief Counsel.  How many employees are a part of DCR:  DCR has 72…...

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The Clock is Ticking; Required Cybersecurity Policies

The headlines in today’s paper should read: “The Wild West is back! Stick ups and heists at an all-time high!” Only today the villain is not riding up to a stage coach on a horse or storming a bank with police sirens in the background. Today’s banks also aren’t holding gold bullion and stacks of bills. Rather today’s “banks” are holding something much more valuable – personal identifying information that criminals the world over are trying to pilfer at an alarming rate.  Operating a regulated commodity futures and derivatives firm successfully is already challenging.  Operating such a business when criminals…...

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NFA Compliance – Preparing for an NFA Exam

Since 2012, the number of CPOs, CTAs, and IBs required to register with NFA has seen a dramatic increase.  With this increase came a renewed commitment by regulators to not only audit new NFA Members within the first year, but more frequently thereafter as well. The frequency of subsequent on site audits depends upon an analysis of risk factors.  Some of the risk factors include but are not limited to: Customer Complaints Qualifications of Principals  Principals Prior Firm Regulatory Issues Reviews of Promotional Materials Regulatory Filing Issues Time between Registration and/or last NFA Exam Of late, NFA has been scrutinizing…...

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Panel Summary-Top 5 Questions

Michael Coglianese had the pleasure of moderating a Panel of experts at the NIBA Conference.  Mike was impressed by the answers as well as the insight of the questions from the audience.  Here are some of the questions summarized below: Why should IRAs be important to the Business of an Introducing Broker? First, the managed futures industry is important to the alternative investment space, giving individual investors another avenue to diversity and protect their portfolio.   There are $7.3 Trillion in IRA assets as of 2014.  IRAs are investment accounts  that allow people particular tax benefits.  Individuals need options to…...

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