How Many Producing Registered Reps In The Inductry

At that place has been much focus on the declining numbers of banks. Banks, however, are non unique in their dwindling numbers. This essay looks at the decline in broker-dealers (BDs) and futures committee merchants (FCMs). As with the decline in the number of banks, there are likely many factors behind the falling numbers. This essay calls for analysis of the reasons behind the drop in the number of BDs and FCMs, including the role regulation may be playing in the reject.

Introduction to Banker-Dealers and FCMs

BDs and FCMs play an essential role in enabling customers to participate in the securities and futures markets. In the securities markets, a broker is "any person engaged in the business concern of effecting transactions in securities for the business relationship of others." ¹ A dealer is a person engaged in the business concern of buying and selling securities for her own account. ² It is common for a firm to exist both a broker and a dealer. BDs are not homogenous; they encompass a wide array of firms that perform a broad range of functions related to helping companies raise majuscule and ensuring that investors can buy and sell securities when they want to. ³ BDs include independent firms with thousands of salespeople, subsidiaries of larger financial firms, and boutique BDs.

FCMs as well are heterogeneous in the services they provide and the grade they have. FCMs, among other things, enable farmers and companies to hedge their risks and provide customers access to exchanges and clearinghouses. FCMs can be subsidiaries of larger financial firms or smaller, independent firms. An FCM is generally anyone who "solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-commutation forex contracts or swaps and accepts money or other assets from customers to support such orders." ⁴

Nigh BDs must register with and are regulated by the Securities and Substitution Commission (SEC) and the Fiscal Manufacture Regulatory Authorization (FINRA). FCMs generally must register with and are regulated by the Article Futures Trading Commission (CFTC) and the National Futures Association (NFA). FINRA and NFA are non-governmental regulators that operate nether government grants of authority. Exchanges such every bit the Chicago Mercantile Exchange and New York Stock Exchange, in their capacity as self-regulators, are some other source of regulation and supervision for BDs and FCMs.

A look at the numbers

Policymakers take noted with warning the declining numbers of small banks and have looked at whether and how regulation is contributing to the refuse. Less attention has been paid to a similar phenomenon with respect to BDs and FCMs. The numbers are dramatic enough to warrant additional policymaker consideration and analysis of what, if whatsoever, role regulation is playing in the downward trend.

The number of BDs has declined adequately consistently over the last decade. In March 2017, there were three,989 BDs registered with the SEC compared to five,892 in March 2007, a more than xxx pct drib. Figure i shows how the numbers have changed over the past ten years. The downward trend is not new; the number of BDs fell approximately eight per centum between 2001 and 2006. ⁵

Every bit Figure 2—which reports FINRA registrants—shows, even so, the declines in branch offices ⁶ and registered representatives—the individuals who sell securities—have not been as consequent or pronounced equally the decline in registered firms. In BD consolidations, duplicative branch offices may exist shut, only registered representatives are likely to be retained or motility to a new firm. ^vii

The FCM industry is much smaller than the BD industry. Effigy iii shows that at that place were 171 FCMs in March 2007, and only 64 in March of this year, a more sixty percent decline. These numbers are slightly inflated as some of these firms are non active and others are affiliated with one another. ^viii

Factors motivating the decline

In that location are many factors at work in the declining numbers of BDs and FCMs. Both industries are highly regulated, so regulation is likely an important factor. Figure 4 shows the corporeality of regulation—measured past counting regulatory restrictions—emanating from the SEC and CFTC—the regulatory agencies charged with regulating BDs and FCMs. Although not specific to BD and FCM regulation, the graph shows that regulation has increased quite essentially over fourth dimension. CFTC regulatory restrictions take nearly doubled since 2000, and SEC restrictions have increased by near 30 percent. By contrast, regulatory restrictions from all agencies have increased by approximately xx-six percent in the same time period. ⁹ The mail-2010 fasten in regulation was driven in large office past Dodd-Frank. Figure four does non reflect regulation by the exchange SROs, FINRA, NFA, and the Municipal Securities Rulemaking Board, which are additional of import sources of regulatory obligations and costs.

Source: Patrick A. McLaughlin and Oliver P. Sherouse, RegData iii.0, http://regdata.org/ (May ten, 2017).

Annotation: RegData measures regulation by counting "the number of binding constraints or "restrictions," words that point an obligation to comply such as "shall" or "must." Mercatus Centre at George Mason University, RegData, http://regdata.org/about/ For more information, see Al-Ubaydli, O. and McLaughlin, P.A. (2015) "RegData: A numerical database on industry-specific regulations for all United states industries and federal regulations, 1997-2012." Regulation & Governance, doi: 10.1111/rego.12107.

Information technology is non surprising that modest BDs make up a disproportionate share of the BD decline ¹⁰ and that industry observers conceptualize further consolidation. ^xi It is also non surprising, equally Figures five-vii, illustrate, that the FCM business is full-bodied in a scattering of large firms. Many regulations unduly burden small BDs and FCMs that are not subsidiaries of a larger firm with extensive compliance resources. At that place are more practical challenges for modest firms also; big firms are meliorate equipped to monitor regulatory developments, come into compliance with new requirements, and hire people with the necessary technical and compliance expertise. A mail-Dodd-Frank survey of small banks, for example, revealed the strain that a set of new regulatory requirements, fifty-fifty when they include special accommodations for small entities, tin can pose. ¹² Mergers allow firms to spread regulatory and compliance costs—a portion of which are fixed—over a larger firm. Big firms likewise may find it easier to alarm regulators and policymakers when rules are not working, although—equally community banks have demonstrated—small firms acting collectively may exist able to draw attention to unique modest-entity challenges.

Regulation is non the but factor at play. Benefits from spreading fixed regulatory and not-regulatory costs across a larger house drive consolidation. ¹³ Downturns in the economy and troubled financial markets can as well contribute to firm compunction. In addition, technology, which has inverse the nature of the markets and the blazon of competition BDs and FCMs face, likely take a hand in the decline. Customer needs and demands also modify over time, which may drive some firms out and draw other firms into the industry. The following sections expect at some unique issues in each manufacture.

Potential factors in the pass up of broker-dealers

The decline in the number of BDs is complicated by the broad multifariousness of firms that are registered as BDs. One surface area in which there is substantial alter is the retail BD mural. More than firms are moving abroad from commissions to an account-based fee model and many registered-representatives are dually registering as investment advisers. The Department of Labor's fiduciary dominion has not taken event and is currently nether review past the new assistants, but it has already caused BDs to rethink their fee structures and business models. An Investment News survey of 57 independent BDs institute "firms posting a 17.i% year-over-year increase [in operating costs] as a result of increased costs related to engineering science, compliance and grooming in preparation for the Labor Section's now in-flux fiduciary rule." ¹⁴ The dominion's ongoing compliance costs and potential revenue implications are probable to play a office in future BD consolidation.

Although the fiduciary dominion has been the primary regulatory event for retail BDs in recent years, Dodd-Frank's far-reaching changes have afflicted the broader BD industry. Among other relevant provisions are the Volcker Rule, the enhanced regulatory framework for derivatives, and Public Visitor Accounting Oversight Board's mandate to oversee auditors of BDs.

Regulation is non the just relevant cistron affecting the entry, exit, and consolidation of BDs. Scale economies also apply to engineering costs, and general economic weather impact BDs forth with other types of businesses. ¹⁵ Financial market conditions may affect firm profitability and therefore firm survival. Business considerations also play a role in the number of BDs. For example, some banks are choosing to supersede in-firm BDs with third-party BDs. ^xvi

The failing numbers likely also reflect the irresolute nature of the markets in which BDs trade and the contest they face. Engineering science has given rising to new forms of competition for traditional retail BDs, including robo-directorate and online trading for investors. As low-cost index common funds and substitution-traded funds fill retail investors' portfolios, BDs may play less of a function. Trading has become almost entirely electronic, extremely fast, and driven by algorithms and bogus intelligence; exchanges are no longer owned by their members, just arguably compete with them; ¹⁷ and non-exchange trading venues—such as dark pools—have proliferated.

Potential causes for the decline in futures committee merchants

The number of FCMs has more halved over the by fifteen years. Multiple factors are at work. ¹⁸ Acting CFTC Chairman Christopher Giancarlo has likened FCMs to "an endangered species" and has blamed failed government policies—including monetary policy and regulatory policy—and several major FCM management failures. ^nineteen Giancarlo cites regulations related to ownership and control, recordkeeping, and capital and notes that the associated regulatory burdens fall disproportionately on "[southward]maller FCMs that traditionally serve agricultural and pocket-size manufacturing interests." ^xx Former CFTC Chairman Timothy Massad best-selling that "at that place has been an increase amongst the summit 10 firms in terms of what they hold," just argued that many factors are at play, including "changes in business organisation models, a depression interest rate surroundings, changes in their profitability for various reasons, customer preferences peradventure, equally to what kind of firms they desire to bargain with." ²¹

In that location have been a number of dramatic departures from the FCM industry in contempo years. Refco's FCM failed in 2005 as its parent company collapsed due to financial fraud. Sentinel failed in 2007 due to a failed investment strategy. MF Global failed in 2012, and the misuse of client funds was central to the failure. Peregrine Fiscal failed in 2012 due to fraud by the business firm's owner. ²² These failures drew renewed regulatory attention to FCMs, which led to new customer fund protections and reporting, disclosure, and risk management requirements. These regulatory changes have likely been especially difficult for small FCMs that are not associated with a larger financial firm. Every bit the CFTC'south Giancarlo explains, although some of these rules "were undoubtedly needed," they "have impacted pocket-sized FCMs more than harshly than large ones." ²³ The FCM failures probable also caused the CFTC to accept a harder line in enforcing FCM regulations, ²⁴ and may also have caused customers to avoid the markets FCMs serve. ²⁵

Regulatory developments unrelated to the notorious FCM failures also have added to the burdens faced past FCMs. Relevant Dodd-Frank changes include the law's new bandy rules and enhanced enforcement powers for the CFTC. Post-crisis changes in upper-case letter affect FCMs that are affiliated with banks. The supplementary leverage ratio, which is scheduled to take full effect in January 2018 but is already in the process of being implemented, supplements risk-based capital requirements by setting a minimum leverage ratio for large banking organizations. It places a particular burden on banking company-owned FCMs because of the counterintuitive style it treats client margin. ²⁶ Acting CFTC Chair Giancarlo explains that by "reduc[ing] the already-narrow profit margins of bank-owned FCMs," the supplementary leverage ratio "is causing many of the largest banking institutions to reduce their willingness be in the FCM business." ²⁷ Regulatory burdens on clearing through FCMs has led clearinghouses to offering direct access to FCM clients, ²⁸ an choice that could consequence in additional FCM closures.

Regulation is simply 1 factor affecting profitability. Not only are FCMs "paying increasingly large sums to comply with new regulations, bolster their cyber security systems, and do business with exchanges," only they are also earning less interest income from the investment of client funds and are having to back those funds with more capital. ²⁹ Low interest rates make FCMs less profitable, and the markets in which FCMs operate are becoming faster and need more technological sophistication to compete. All of these factors likely bulldoze financial firms' decisions to sell some or all of their FCM business. ³⁰ The TABB Group, which has studied the FCM industry, nevertheless contends that the industry's profitability is improving. ³¹ Perhaps the downward trend will reverse itself—there was i new entrant in March of this year.

Implications of the declining numbers

The decline in BDs and FCMs raises a number of concerns. If industry exit and entry is driven by regulation, rather than by the economics of the marketplace, the manufacture can become non-competitive. Constrained competition decreases client option. Moreover, if regulatory barriers prevent new entrants with new ideas, technologies, and business models from displacing existing firms, customers may be denied higher quality or more than affordable service. However, it is important to remember that regulation has sometimes harmed competition and caused at that place to be more firms than would otherwise exist. The fixed-commission rates (which were established through self-regulation) that prevailed in the brokerage industry until 1975 are 1 instance. ³² Historically prevalent branch banking restrictions are another.

If regulatory barriers prevent new entrants with new ideas, technologies, and business organization models from displacing existing firms, customers may be denied college quality or more affordable service.

The impact of the declining numbers of firms may be of particular concern for individuals with modest accounts and small companies. If a rural BD closes its doors, clients with small accounts may have trouble finding a convenient alternative. In the client swaps clearing business organization, the authorization of a small number of FCMs has raised concerns about the toll of and admission to clearing for small derivatives users. ³³ And, as David Burton of the Heritage Foundation has pointed out, the disappearance of pocket-sized BDs, who "are more willing to underwrite the offerings of minor and first-up businesses," could harm our economy. ³⁴

If consolidation leads business to concentrate in a handful of big firms, the consequences of one of those firms failing are likely to be worse than in a more dispersed industry. ³⁵ Acting CFTC Chair Giancarlo has pointed to several potential issues associated with concentration in the FCM manufacture, including "difficulties in transferring client positions and margin in times of stress or an FCM default," heightened systemic risk, dumb market function, and damage to customers "reliant on the intermediation of an FCM in our mandated clearing world." ³⁶

Figures 5, 6, and 7 illustrate the concentration in the FCM industry. CFTC rules require FCMs to segregate funds in relation to their client activity, so each firm'due south required set-asides are indicative of its share of the client concern. These figures show that relatively few FCMs have nearly of the customer clearing business in connection with different types of customer activeness. In each chart, the grayness portion represents the share of the top x firms.

The dominance of a handful of FCMs in each surface area may be consistent with a competitive, healthy market. Indeed, observers are not all of 1 mind almost whether the concentration amid FCMs is a cause for concern. ³⁷ All the same, equally firms leave the industry, there volition exist fewer to selection upward the slack if ane of the larger firms has an operational or other failure, such as already happened in several notorious instances in the futures industry. On the other hand, peradventure the ability of the manufacture to rebound after the failure of large FCMs illustrates that the markets tin absorb even the failure of one of the key firms.

Conclusion

This essay highlights the turn down in BDs and FCMs. While identifying some potential contributing factors, the essay primarily seeks to underscore the need for further analysis. Identifying the "right" number of BDs or FCMs is not a job for policymakers, but taking note of the decline in these firms and seeking to understand whether regulation is acting equally an unwarranted barrier to entry and inducement to exit is a worthwhile undertaking. Competition more often than not serves customers well, and as well much concentration may make our financial organization less resilient in times of stress. To the extent regulation is to arraign for some of the reject, regulators should consider whether regulatory objectives could be achieved effectively through less burdensome means.

Hester Peirce appreciates the research help of Conor Norris and Vera Soliman with this article.

The writer did not receive financial support from any firm or person for this article or from whatsoever firm or person with a financial or political interest in this article. She is currently not an officer, manager, or board member of any organization with an interest in this commodity.

Footnotes

Securities Exchange Act § 3(a)(iv)(A).
Securities Exchange Act § 3(a)(v)(A).
For a general word of BDs, see Daniel M. Gallagher, Broker-Dealer Regulation in Reframing Financial Regulation: Enhancing Stability & Protecting Consumers (Hester Peirce & Benjamin Klutsey, eds. Mercatus Center at George Bricklayer Academy 2016). For a helpful breakdown of dissimilar BD business models, see Andre Cappon and Stephan Mignot, The Brokerage Globe Is Irresolute, Who Will Survive? Forbes (April 16, 2014), https://www.forbes.com/sites/advisor/2014/04/16/the-brokerage-earth-is-changing-who-will-survive/print/.
National Futures Clan, Futures Commission Merchant," https://world wide web.nfa.futures.org/nfa-registration/fcm/index.HTML. Come across too 7 USC § 1a(28).
See Angela A. Hung, Noreen Clancy, Jeff Dominitz, Eric Talley, Claude Berrebi, Farrukh Suvankulov, RAND Institute for Civil Justice Study for the SEC, Investor and Industry Perspectives on Investment Advisers and Broker-Dealers (2008), p. 36. The study reported that 5,526 firms filed Financial and Operational Combined Uniform Single (FOCUS) reports in 2001, compared to 5,068 in 2006. BDs with customer assets must file FOCUS reports. This essay's BD numbers from 2007 through 2017 are based on a broader set up of firms—"active broker-dealers who are registered with the SEC." SEC, Frequently Requested FOIA Certificate: Company Data Near Active Broker-Dealers, March 2007-May2017, https://www.sec.gov/assist/foiadocsbdfoiahtm.html.
Changes in how FINRA defines and interprets "branch office" over time may bear upon the number of branch offices.
David R. Burton, Reforming FINRA, Heritage Backgrounder No. 3181 (February 2017), http://www.heritage.org/sites/default/files/2017-02/BG3181.pdf, at 10.
J. Christopher Giancarlo, Commissioner, Commodity Futures Trading Committee, Statement for the Market Run a risk Advisory Committee (June 1, 2015), http://world wide web.cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement060115. Then-Commissioner Giancarlo pointed out that "[o]f the 72 FCMs registered with the CFTC as of March 2015, 15 firms were dormant, leaving merely 57 active firms serving customers."
Patrick A. McLaughlin and Oliver P. Sherouse, RegData 3.0, http://regdata.org/ (May 10, 2017).
See, for instance, Jonathan Henschen, The Modest Generalist Broker-Dealer: R.I.P? Who Will Survive?, ThinkAdvisor (Apr ten, 2014), http://world wide web.thinkadvisor.com/2014/04/10/the-small-generalist-broker-dealer-rip-who-will-su?slreturn=1493667538. Henschen explains that "Like community banks, the number of broker-dealers continues to refuse, with the panthera leo's share being pocket-sized banker-dealers that closed or merged."
See, for example, Bruce Kelly, Contained Broker-Dealers Suffer Worst Year Since Credit Crisis, Investment News (April 25, 2016, 11:08 a.m.), http://www.investmentnews.com/commodity/20160425/Gratuitous/160429966/independent-broker-dealers-endure-worst-yr-since-credit-crisis The story quotes Larry Papike, president of Cross-Search: "The growth in the IBD space over the next couple of years will come from the cannibalization of the weaker firms past the big firms . . . ."
Hester Peirce, Ian Robinson, and Thomas Stratmann, How Are Small Banks Faring under Dodd-Frank? (Mercatus Center at George Mason University Working Paper No. 14-05 February 2014).
See, for example, Subcommittee on Article Exchanges, Energy, and Credit of the Committee on Agriculture of the U.S. Firm of Representatives, Hearing to Review the Impact of Capital and Margin Requirements on End-Users (April 28, 2016),p. 46, https://www.gpo.gov/fdsys/pkg/CHRG-114hhrg20029/pdf/CHRG-114hhrg20029.pdf (testimony of Walter L. Lukken, President and CEO, Futures Industry Association) (explaining that the consolidation in the FCM manufacture reflects the demand to spread fixed costs over a larger volume of transactions: ". . . more than volume is necessary to flow through these intermediaries in gild to make information technology a profitable business. And then you have people who are shuttering businesses, people who are merging, then yous are seeing that over that period of time where people are deciding to either just get out of the business itself or to offer to attempt to merge those businesses in guild to get more volume to go through those things.").
Matt Sirinides, Independent Broker-Dealer Revenue on the Decline: Firms Participating in the Investment News' Almanac IBD survey posted their starting time average year-over-yr drop in revenue since the 2008 credit crisis, Investment News (April 22, 2017, 7:00 a.m.), http://world wide web.investmentnews.com/article/20170422/BLOG18/170429968/contained-banker-dealer-revenue-on-the-decline.
Ryan C. Fuhrman, Decline of the Contained Banker-Dealer, Investopedia (undated) (last visited May 1, 2017, 2:25 p.thou.), http://www.investopedia.com/articles/professionals/050613/reject-independent-brokerdealer.asp. This analysis points to a number of factors, including: (i) consolidation driven past economic factors, including depression interest rates and calibration economies; (2) regulation, which larger firms are improve able to comply with and influence; (3) regulation-driven engineering science costs, which big firms tin can more easily absorb; and (4) acquisition involvement from big firms and private equity firms.
See, for instance, Margarida Correia, Bank-Owned Broker-Dealers Decline, BankInvestmentConsultant (Apr 2, 2014, 3:41 p.thou.), https://www.bankinvestmentconsultant.com/news/bank-endemic-broker-dealers-refuse.
Meet, for example, Cappon and Mignot, who argue that "[i]n some ways brokers and exchanges at present compete with ane another."
For a variety of views on the future of the FCM industry and forces driving the changes, run into LynnStrongin Dodds, Mind the Clearing Gap—What'southward Adjacent for FCMs, DerivSource (June 18, 2015), https://derivsource.com/2015/06/18/mind-the-clearing-gap-whats-next-for-fcms/.
J. Christopher Giancarlo, Commodity Futures Trading Commission, Statement for the Marketplace Adventure Informational Committee (June 1, 2015), http://world wide web.cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement060115.
J. Christopher Giancarlo, Commodity Futures Trading Commission, Statement for the Market Risk Advisory Commission (June 1, 2015).
CFTC, Transcript of Market Risk Informational Commission Meeting (June two, 2015) (statement of Timothy Massad, Chairman, CFTC), http://www.cftc.gov/idc/groups/public/@aboutcftc/documents/file/mrac_060215_transcript.pdf at 172-173.
For discussions of these failures and subsequent regulatory responses, come across Anita K. Krug, Uncertain Futures in Evolving Financial Markets, Washington Academy Law Review, Vol. 93, pp. 1209-1269 (2016) and Jerry W. Markham, Custodial Requirements for Client Funds, Brooklyn Periodical of Corporate, Fiscal & Commercial Police, Vol. 8, pp. 92-133 (2013).
J. Christopher Giancarlo, Commissioner, Article Futures Trading Commission, Statement for the Market Risk Informational Committee (June i, 2015).
HLC Consulting LLC, Zero Tolerance for FCM Customer Fund Violations: CFTC Notches some other Segregated Accounts Activity on Technicalities (May 31, 2014), http://www.hlcconsultingny.com/unmarried-post/2014/05/31/Zero-Tolerance-For-FCM-Customer-Fund-Violations-CFTC-Notches-Another-Segregated-Accounts-Action-on-Technicalities.
For a discussion of client unease following the failures of MFGlobal and Peregrine, see Tatyana Shumsky and Jerry A. DiColo, Futures Clients Enquire: 'Where's my Money?', Wall Street Periodical (July 16, 2012, 12:21 p.yard.), https://www.wsj.com/articles/SB10001424052702303644004577524923316973052.
Former CFTC chairman Timothy Massad explained that "Nether the SLR and the eSLR, margin for cleared derivatives is treated every bit an asset of the banking concern and is not permitted to be counted against the derivative exposure, and many believe this is not appropriate because margin is legally segregated." Keynote Address before the Plant of International Bankers (March two, 2015), http://www.cftc.gov/PressRoom/SpeechesTestimony/opamassad-xiii. See also Thomas C. Deas, Chairman, National Clan of Corporate Treasurers, Prepared Testimony before the Senate Commission on Banking, Housing, and Urban Affairs, Hearing: Fostering Economical Growth: The Role of Financial Companies(March 28, 2017), https://www.banking.senate.gov/public/_cache/files/d774abf7-9c42-4698-b907-f2694bfb4ba3/E536A5C845F85021A15BF3D3048628FD.deas-testimony-3-28-17.pdf. Deas explains: The SLR does not allow the clearing fellow member to take credit for the segregated initial margin posted by its customers, including stop-users [and] segregated initial margin in the form of cash may be required to be added to a immigration member'southward balance canvas exposure, requiring additional capital."
J. Christopher Giancarlo, Acting Chairman, CFTC, Remarks before the International Swaps and Derivatives Association 32^nd Annual Meeting (Lisbon, Portugal May 10, 2017), http://world wide web.cftc.gov/PressRoom/SpeechesTestimony/opagiancarlo-22.
See Tom Lehrkinder, Growing Cocky-Immigration Trend Could Threaten FCMs, TABB Forum (August 29, 2016), http://tabbforum.com/opinions/growing-cocky-clearing-trend-could-threaten-fcms.
John McCrank, Ranks of Commodities Brokers Dwindle as U.S. Futures Industry Evolves, Reuters (July 2, 2015, iv:39 a.g.), http://www.reuters.com/article/cme-landmark-brokers-idUSL1N0ZG14H20150701. See too Christian Berthelson and Tatyana Shumsky, SocGen Bargain for Bache Illustrates Commodity-Trading Woe, Wall Street Journal (May 26, 2015, vii:07 p.m.), https://www.wsj.com/articles/socgen-bargain-for-bache-illustrates-commodity-trading-woe-1432681628.
Encounter, for example, Joe Rennison, Nomura Exits Swaps Clearing for US and European Customers, Fiscal Times (May 12, 2015). The article explains that Nomura's departure from client clearing of swaps follows the cost-motivated departures of Regal Bank of Scotland, Land Street, and BNY Mellon.
TABB Grouping, Press Release: "$4.5 Billion in Revenue Available for U.Southward. Futures Commission Merchants in 2016, Co-ordinate to TABB Group Study" (November 29, 2016, 8:30 a.chiliad.), https://globenewswire.com/news-release/2016/11/29/893448/0/en/4-v-Billion-in-Revenue-Available-for-U-S-Futures-Committee-Merchants-in-2016-According-to-TABB-Group-Written report.html The study's writer, Thomas Lehrkinder, explained that "FCMs have been treading water since the end of the fiscal crisis, only the sense from leaders of the community is that they accept weathered the storm and the business will rise over fourth dimension."
Andre Cappon and Stephan Mignot, The Brokerage World Is Changing, Who Volition Survive? Forbes (Apr 16, 2014).
The trouble of "High clearing-related fees" is discussed in, ISDA, Research Note: Key Trends in Clearing for Pocket-size Derivatives Users (October 2016), at p. half dozen. The potential that FCMs will deny service to small customers is discussed in John McCrank, Ranks of Commodities Brokers Dwindle as U.S. Futures Industry Evolves, Reuters (July two, 2015, 4:39 a.thousand.).
David R. Burton, Reforming FINRA, Heritage Backgrounder No. 3181 (February 2017), at ten.
This problem is discussed in John McCrank, Ranks of Commodities Brokers Dwindle as U.Due south. Futures Manufacture Evolves, Reuters (July 2, 2015, 4:39 a.one thousand.).
Remarks earlier the International Swaps and Derivatives Clan 32^nd Annual Coming together (Lisbon, Portugal May 10, 2017).
Compare for example, Tod Skarecky, The Truth near FCM Concentration, Clarus Financial Technology (Apr four, 2017), https://world wide web.clarusft.com/the-truth-about-fcm-concentration/ with John P. Needham, 2016 Year-End FCM Financial Information, Needham Consulting blog (February iii, 2017), https://needhamconsulting.net. Skarecky tries to put the concentration of FCMs that articulate swaps into perspective and concludes that "There are 19 active FCM's clearing swaps. That seems like plenty." Needham, by dissimilarity, I thinks "that the concentration among just ten FCMs is a cause for worry" and "that the dwindling number of FCMs is a cause for genuine warning."