NIBA brings concerns over fees to CME Group

Chairman's letter to NIBA Membership

Dear Members:

This month’s issue of the NIBA newsletter  focuses on the topic on everyone’s mind -- the CME Group market data fee increases. Not surprisingly, none of our members are happy about it. Some even say that added to the industry problems of the past two years, this could be the last straw for their business.

On December 2, 2013 the NIBA Executive Board of Directors took your comments and suggestions to a meeting with the CME Group market data team. The points we emphasized are:

  1. The size of the fee increase as announced.
  2. The definition of ‘professional user’ versus ‘non-professional user.’
  3. The fact that new rules and best practices developed after the MF Global and PFG failures essentially require brokers to use multiple platforms and/or FCMs as part of a good risk management strategy.
  4. The chilling effect these additional fees will have on hiring new APs.
  5. Who does the enforcement necessary for implementation and who pays the cost of that enforcement.

During that meeting, the CME staff clarified the way the fees will be charged -- $85 for each of the 4 exchanges per broker in your office, multiplied by every front end used, but not multiplied by each FCM used. The other points we raised are being considered.

The NIBA is well-respected by the CME Group, and they are very interested in your comments and suggestions. We will continue to update you, and we encourage you to send your comments directly to the CME Group, marketdata@cmegroup.com. You can also post comments on the NIBA LinkedIn page -- no solicitations for business or trading programs, please.

In this issue, you can read comments and suggestions from several members of the Association. We also have an update on Reg. 1.35 (Reporting Requirements) and an article from Viaquest, our third-party insurance provider.

You elected two new IB Board members - Ryan Griffeth, PostRock Brokerage and William Gallwas, Striker Securities. Ryan is working on the newsletter committee and William volunteered for membership and the September 2014 Chicago member conference. Brian Gaffud, representing Rosenthal Collins Group is our new FCM member, and Ron Grossman, RG Broker Services is now an advisor to the Board on IB issues. All four attended the November 21, 2013 Board meeting in Chicago.

We also posted a tentative schedule for the Association’s 2014 Member meetings. They will be held March 6 in Irvine, CA; April 29 or May 1 in New York City; and, September 22 in Chicago. The Irvine meeting is co-sponsored by the CME Group, the NFA and the NIBA. Please contact any conference committee chairman with suggestions for topics or speakers, or to volunteer for the committee.

Best Regards, Melinda Melinda Schramm, Chairman NIBA

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