Andrew Abraham

andy-0101 My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I adhere to the philosophy of trend following. Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets me apart from other traders is that I am not only concerned about the return on investment but how much risk I will have to tolerate to achieve my goals.

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If you are interested in contacting for speaking engagements. Please email me at Andrabr9@gmail.com or call 954 903 0638.

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Futures and commodity trading involve substantial risk. The evaluations of futures and commodities may fluctuate and as a result, clients may lose more than their original investment. In no event should the content of this website be construed as an express or an implied promise, guarantee or implication by, that you will profit, or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible, where projections of future conditions are attempted.

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CFTC Q&A on Rule 1.25

You got to love this sentence;

The Commission’s interest is in ensuring that customer funds are invested in instruments that satisfy the Commission’s overall
objective of preserving principal and maintaining liquidity.

No one I have spoken to yet, market participants for 30 years plus ever knew that their segregated accounts could be touched by anyone other than themselves. financialsafeguards2.
CME Document Financial Safeguards

What happened to preserving principal and liquidity CFTC?. For two weeks we have not had access to “OUR” segregated accounts and worse there are reports in the news we need to take a haircut due to the permission that the CFTC gave MF Global and others such as JP Morgan,UBS etc.

A new twist is the mention of money market funds. These also can be violated?

Commodity Futures Trading Commission
Office of Public Affairs
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
www.cftc.gov
Regulation 1.25 Q & A
What is the goal of the proposed rulemaking?
In proposing amendments to the Commission’s regulations regarding investment of customer and secured amount
funds, the Commission seeks to simplify Regulation 1.25 and impose requirements that can better mitigate credit,
liquidity and market risk and ensure the preservation of principal and maintenance of liquidity. The Commission
proposes to (1) narrow the scope of investment choices; (2) raise certain standards imposed on permitted
investments individually and on a portfolio basis, and (3) increase safety by promoting diversification. The
Commission has endeavored to tailor its proposal to achieve these goals while retaining an appropriate degree of
investment flexibility and opportunities for attaining capital efficiency for derivatives clearing organizations (DCOs)
and futures commission merchants (FCMs) investing customer segregated funds and secured amount funds.
Does the proposal limit the collateral that may be used by customers of an FCM?
No. This proposal focuses solely on the investment of customer funds by FCMs and DCOs. The Commission’s
interest is in ensuring that customer funds are invested in instruments that satisfy the Commission’s overall
objective of preserving principal and maintaining liquidity.
Does the proposal contain any amendments affecting investments money market mutual funds
(MMMFs)?
Yes. Investments in MMMFs would be subject to a 10% instrument-based concentration limit, meaning that an
FCM or DCO may invest a maximum of 10% of its total assets in segregation in interests in MMMFs. Additionally,
investments in MMMFs would be subject to a 2% issuer-based concentration limit, meaning that an FCM or DCO
may invest a maximum of 2% of its total assets in segregation in any one family of funds.
The proposal also contains two technical amendments.

The proposal also contains two technical amendments. First, the rulemaking would clarify that acknowledgment
letters for MMMFs are to be from a party that has substantial control over the fund’s assets and has sufficient
knowledge and authority to facilitate redemption. Second, the rulemaking would update and clarify the next-day
redemption requirement for MMMFs (as well as include an appendix with safe harbor language for MMMF.

Andrew Abraham
Abraham Investment Management


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1 comment to CFTC Q&A on Rule 1.25

  • Andre

    Well, another new twist to stay on fantasy land and perpetuate the fraud. The truth is, if your assets are being used (and worse, you don’t know in what), it’s NOT segregated. And the fact that the profits is not yours make keeps the incentive there to defraud you (after all, if these profits were 100% yours MF global wouldn’t bother to work for you for free).

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