With the NFA’s creation of Introducing Brokers in 1984, it soon became clear that there was a need for an association for IBs. This newly created group needed a voice and found it with the National Introducing Brokers Association, now celebrating its 25th Anniversary.
“The mission is still of education and very much providing a forum for a voice and a way to get our opinions out,” says Melinda Schramm, the NIBA’s founder and chairman. “But the IB community has changed considerably over the years.”
While IBs are still all around the country, they’re really value added brokers in today’s world.
Schramm partnered with current NIBA President Mike Burke, who said that the early days involved meeting with several FCMs with a concentration on IB business. Burke wanted to reach out to the IBs to help and provide a voice for them when it came to regulations.
Many NIBA members are both registered IBs as well as CTAs.
“It was a natural progression to represent both of those groups,” Burke said. Recently, the CFTC created a swaps participant registration. These swaps participants have a similar business and structure to IBs. Burke hopes to reach out to new registration participants who may need some help to ensure that they abide by the regulations and do what is required of them. He also hopes to give swaps participants an outlet to meet with others in the business and create conversations about what needs to be done in the business and how to accomplish it.
The biggest hurdle so far has been increased regulation. Burke said he is all for regulation that is easy to understand and helps protect clients, but “regulation for the sake of regulation doesn’t make a lot of sense.” NIBA hopes to continue working with regulators and create a dialogue between them and members of the organization, with the goal to create regulations that not only protect customers, but also allow for the growth of the industry.
Perhaps the biggest change will be in the NIBA’s name. Since its inception, the NIBA
has been known as the National Introducing Brokers Association. With the change of demographics and the change of the community as a whole, the organization will be known as NIBA – The Association for Derivatives Professionals. The NIBA will continue its original mission, but will also provide more representation as they reach out to Congress, the CFTC and NFA on behalf of all their members.
Despite any setbacks with regulation, Schramm remains optimistic about the CTA and IB space.
“I was optimistic in 1995 when they said electronic trading will kill the IB community,” she recalled, “I was optimistic all through MF Global and Peregrine Financial Group and I continue to be optimistic. There is a space in our markets for introducing brokers. There is a space for commodity trading advisors.”
Burke also shares in the optimism and remains very bullish on the futures markets. He also emphasizes the importance of connecting the NIBA’s members and keeping the conversation going.
“Our members provide a value added service that as the FCM communities grow, they get bigger and bigger, and they can’t necessarily provide the personal touch,” Burke said. “And I think that our client base needs the personal touch, that an IB and a CTA and a CPO and an AP can give to them.”