Archive for the ‘NFA’ Category

2015 Year-End FCM Financial Data

February 11, 2016

Attached here is the CFTC’s Financial Data report for FCMs, sorted by Segregated Funds Required: fcm-data-2015YE-sorted-by-Seg-xls

As we’ve discussed here before, FCM consolidation (Wedbush, Crossland, Knight, etc.), executive malfeasance and criminal activity (MF Global and Peregrine), and lousy economic times (Jefferies) have led to fewer and fewer clearing members that are willing to clear FCM customer business.

We are now down to just 55 clearing firms in the U.S. that are carrying and reporting Customer Segregated Funds. The amount of Customer Seg assets held by FCMs at the end of 2015 was  $148,435,860,345.00. There were 72 FCMs registered at CFTC at the end of 2015.

By contrast, just five years ago, 71 U.S. FCMs were clearing customer business, and the amount of assets held in Seg was $151,055,523,757.00:  fcm-data-2010YE-sorted-by-Seg-xls At that time, 122 FCMs were registered with CFTC.

Talk about concentration risk: roughly the same amount of Customer Seg assets held at roughly 25% fewer clearing firms.

And ten years ago, when just $94,204,546,290.00 was held in Customer Seg accounts, there were 94 FCMs clearing customer business, and there were 178 FCMs registered with CFTC: fcm-data-2005YE-sorted-by-Seg-xls

People talk about exchange volumes, and exchange revenue, how high the volumes are, how robust trading revenue is,  and cite this as evidence that the U.S. derivatives industry is healthy and growing.

In my view, they’re looking at the wrong metric.

 

FCM Data – November 2015

January 8, 2016

Well, here is the latest FCM Data and provided by the U.S. Commodity Futures Trading Commission, or CFTC.

By now you know the drill: CFTC publishes the FCM Financial Data on their website. I download the spreadsheet, sort it by Customer Seg Funds, and upload it here.

So, as discussed before: fewer and fewer FCMs are clearing customer business. Jefferies has wound down the customer portion of their FCM business as they continue to wind down the FCM, taking the venerable Bache and Prudential Bache names with it.

Currently there are 55 FCMs clearing customer business, but that will drop to 54 once the Xchange Financial Access FCM winds down, as it was ordered to do by NFA in that organization’s infinite wisdom.

In December 2013 there were 69 FCMs that reported Customer Seg. A list of them is here.

This sick trend continues apace, except when it periodically accelerates.

 

A Quick Look at MBF

April 10, 2013

MBF never had Customer Seg funds in the period I looked at below. The firm’s net capital requirements was never greater than the FCM minimum of $1,000,000 as required by CFTC. I don’t know why the firm de-listed as an FCM.

Source for the details below is here: http://cftc.gov/MarketReports/FinancialDataforFCMs/index.htm

June, 2013
Customer Assets in Seg: $0
Customer Seg Required: $0
Adjusted Net Capital: $1,311,027
Net Capital Required: $1,000,000

July, 2013
Customer Assets in Seg: $0
Customer Seg Required: $0
Adjusted Net Capital: $2,362,149
Net Capital Required: $1,000,000

August, 2013
Customer Assets in Seg: $0
Customer Seg Required: $0
Adjusted Net Capital: $2,099,107
Net Capital Required: $1,000,000

September, 2013
Customer Assets in Seg: $0
Customer Seg Required: $0
Adjusted Net Capital: $1,960,067
Net Capital Required: $1,000,000

October, 2013
Customer Assets in Seg: $0
Customer Seg Required: $0
Adjusted Net Capital: $1,872,412
Net Capital Required: $1,000,000

November, 2013
Customer Assets in Seg: $0
Customer Seg Required: $0
Adjusted Net Capital: $1,623,543
Net Capital Required: $1,000,000

MBF was deleted from the CFTC FCM Data Report in December 2012.

FCM Data – May 31 Report from CFTC

July 13, 2012

By now most folks know that Peregrine Financial Group, variously called PFG or PFGBest, has gone belly up amid allegations of the theft of $220 million dollars of customer money. The company’s sole owner was found by employees parked behind the corporate HQ in Cedar Falls, IA with a hose running from his exhaust pipe to the passenger seats of his car. He has survived. There are reports of a suicide note that talks of “financial irregularities.”

Today the CFTC released the monthly FCM Data report of Customer Segregated Funds (and 30.7 Secured Funds). Peregrine is on the list, at #38, having reported $371,453,743 as the firm’s Seg Requirement, and reporting $376,523,865 as Customer Seg on hand. This means the firm reported a $5,070,122 excess in their Seg balances. It is interesting to note the PFG is on this list, when MF Global was removed from the list on the first report after their bankruptcy last October 31.

Of course, now we know that these reports, for Peregrine, were falsified. Reports are that they told regulators that the firm had some $220 million in a Segregated bank account, but regulators (NFA, the National Futures Association) have been told by the back that there was less than $10 million on hand.

According to the NFA’s Member Responsibility Action (MRA) this has been going on for at least two and a half years.

The CFTC releases the report sorted by FCM, alphabetically. I usually sort the data by Seg amounts. Here is a link to the CFTC FCM Data Report, sorted by Customer Segregated Funds Required (column J).

fcmdata0512-xls Sorted By Seg