The purpose of this statement is to provide you with information about some of the material conflicts of interest that may arise between you and Global Futures & Forex, Inc. (“GFF”) in connection with GFF performing services for you with respect to futures, options on futures, or Forex. Conflicts of interests can arise in particular when GFF has an economic or other incentive to act, or persuade you to act, in a way that favors GFF, its principals or associated persons.
As an independent introducing broker, GFF maintains separate clearing agreements with multiple registered Futures Commission Merchants (“FCMs”). GFF may establish different commission, clearing and execution costs with the FCMs. It may be financially advantageous for GFF to recommend one particular FCM over another FCM. In addition, GFF may not maintain an existing clearing agreement with an FCM of your choice and therefore may have an incentive to persuade you to use an FCM that GFF has a clearing relationship with.
GFF offers trading systems to customers. In selecting these systems, GFF may have the incentive to select and offer trading systems that trade at higher frequencies than other available systems. In doing so, GFF would stand to earn greater commission income since the systems trade more frequently than other systems.
GFF and its principals and associated persons may trade proprietary accounts on their own behalf. These accounts may be charged lower commission rates as compared to commission rates established between you and your FCM. Furthermore, these proprietary accounts may take positions that are opposite from you or may compete with you for positions.
At times, FCMs may have arrangements with introducing brokers (“IB”) like GFF that provide volume discounts or credits or other forms of incentives that benefits IBs like GFF. There are no restrictions on GFF from participating in, and obtaining financial benefits from such incentive programs. Furthermore, GFF may enter into an arrangement whereby it receives a portion of the interest income earned on free credit customer balances. GFF may have an incentive to recommend you to an FCM if the FCM is paying a higher interest rate than other FCMs.
GFF is permitted to enter into soft dollar arrangements with a service provider or other registered entities whereby GFF receives a benefit without paying in hard dollars. For example, GFF is permitted to receive research or other forms of service from a particular FCM solely for introducing accounts to that particular FCM versus another FCM. GFF would have an incentive to introduce your account to that particular FCM offering the additional services.
GFF’s principals and/or associated persons are permitted by rules and regulations to hold additional registrations. As a result, these individuals may need to devote their time amongst several activities.
GFF and its associated persons may fee share with third party commodity trading advisors (“CTA”). As a result, they can have an incentive to place you with a particular CTA based solely upon the sharing arrangement or even the frequency of their trading that results in higher commissions.