Below we have listed innumerable acronyms, phrases, and other unique terms commonly used in the financing and investment community.
Scroll down, it’s a long page, but it will prove invaluable in your journey to success!
BCL (Bank Comfort Letter): A letter was written by a bank officer on behalf of a consumer, attesting to the current weight and excellent permanent account holder.
BG (Bank Guarantee): A Debt Instrument Issued by Banks (ex. MTN, BG) bank instrument, guaranteeing a certain face value for an investor, while collecting an annual appeal before expiring upon maturity.
CD (Certificate of Deposit): A fiscal product offered by banks to account holders who agree to leave their funds on deposit for a pre-defined cycle. This allows investors to assemble a higher annual appeal while securing their money in a low-risk venture.
CIS (Client Information Sheet): One of the compliance ID typically required for placement programs. This document questions for basic information such as personal details and line of business the applicant is in.
CMO (Collateralized Mortgage Obligation): A finance-backed, investment-grade bond that separates finance pools into uncommon maturity lessons. By making a Collateralized Mortgage Obligation CMO, the bond issuer can assemble a critical hub. Simultaneously, the purchaser gets the bond at a discount from face value and collects annual appeal. Even if these bonds are often found in the placement affair, most of them are worth no more than 10% FV or worthless since the financial crisis hit.
DTC (Depository Trust Committee): A third party companionship that provides clearing and settlement services by immobilizing securities and making “book-entry” changes to the ownership of assets. This standard is used in placement programs to conveying/assign assets to a trader from an investor.
FPA (Fee Protection Contract): An authoritative document outlining all fees due to intermediaries upon completing a transaction. This is vital for any placement broker to be with you and utilize.
ITR (Irrevocable Trust Receipt): A receipt confirming and detailing the deposit of specific assets into a trust. Even if the ITR contains all asset details, banks typically will not assign a value to it since the asset is NOT deposited in a credible bank but rather trust.
JV (Joint Venture): An contract between two entities outlining compensation, fees, and the obligations of both parties in family members to a specific affair venture. This is the most common legal organization for placement programs. KYC (Know your Client): The activities of customer due diligence that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them. In some cases, this form will substitute for the Client Information Sheet.
LOI (Letter of Intent): A letter provided by investors interested in a placement program, defining their unsolicited appeal to enter the investment transaction. This document can also be used for areas further than placement, especially where solicitation laws apply.
LTV (Loan to Value): This is the loan value that a bank/lender will provide after evaluating an asset's worth. Usually, this is used for hard/illiquid assets and is confirmed in % in family member to the asset’s appraisal value (Loan/Appraisal Value = LTV %).
MTN (Standard Term Note): A tradable and discountable debt instrument issued by banks, collecting an annual appeal before expiring upon maturity with a specified face value.
NCND (Non-Circumvention, Non-Disclosure Contract): An contract between two parties defining the boundaries and limitations of their relationship. Typically, this contract is used by placement brokers to “protect” from future circumvention.
POF (Proof of Funds): The administer of allowing another individual to, for the interim, show your assets as their own, with the fee needy upon the time it’s utilized. This axiom can also refer to a bank statement, or another fiscal document, proving the assets of a prospective investor.
PPM (Private Placement Thought): A formal description of an investment chance produced to comply with innumerable federal securities set of laws. This outlines all details of the “placement” offered, and the obligations of both parties caught up.
PPP (Private Placement Program): A investment program that trades discounted bank instruments (MTN/ BG ) for profit in the secondary market.
RWA (Ready, Willing, and Able): Axiom used by placement brokers confirming the readiness of an investor to fit supplies and move forward with a chance. This statement can also be made in the form of a document, which some programs may require.
SBLC (Stand by Letter of Credit): A document issued as a guarantee of payment by a bank on behalf of a client. This is used as “payment of last resort” if the client fails to fulfill a third party's contractual commitment.
SKR (Safe Keeping Receipt): A document produced by a bank on behalf of its consumer specifies all details of an asset and confirms its current deposit existence.
T-BILL (Reserves Bill): A small-term debt obligation in the form of an appeal accruing note, backed by the U.S. government with a maturity of less than one year.
T-NOTE (Reserves Note): A money-making U.S. government debt wellbeing containing a fixed annual appeal and a maturity between one and 10 years.
T-STRIP (Reserves Strip): This is a “zero ticket” bond issued by the U.S government whose yield is based upon the variation between the discounted price it is bought at and its face value at maturity (ex. 10M Note, buy at 85% of face, worth 100% at maturity).
VOD (Verification of Deposit): This is a signed document provided by a fiscal institution, verifying an account holder's current weight and history. This is similar to a Bank Comfort Letter (BCL), but the verbiage may be uncommon.
OTHER KEY TERMS IN TRADE MARKET
Administrative Hold: A term usually referred to by brokers. It refers to the investor’s bank reserving funds in favor of another individual, lacking in fact encumbering or moving the asset.
Asset-Backed: Refers to a note or Debt Instrument Issued by Banks (ex. MTN, BG)”>bank instrument which is collateralized by hard assets, not liquid assets. This can be gems, gold, art, diamonds, or other rare valuables.
Assignment: Transferring ownership, or rights to use the collateral, to another individual for a specific cycle of time. Some traders require this for placement funds.
Bank Instrument: A debt instrument issued by banks to door critical liquidity, providing an annual appeal and face value for the purchaser. Bank Guarantee BG’s and MTN’s are common examples.
Bank to Bank: A phrase typically used by brokers, referring to the verification of assets from the investor’s bank officer to the trader’s/seller’s bank officer.
Beneficiary; The individual listed as the owner of a debt instrument, such as standard term notes (MTN’s) or bank guarantees (BG ’s).
Best Efforts: This is a term used in any real placement contract. It states that the trader, or investment administrator, will use their best efforts to achieve high profits. For example, a contract may say, “profits will be achieved on a best efforts basis.”
Blocked Funds: A general axiom that refers to blocking liquid assets in favor of another self. This is most commonly achieved via Swift MT 760
Broker Chain: Also known as a “daisy chain,” this often-used term describes the “layers” of brokers that one must go owing to before they reach a trader. Unfortunately, there are usually several placement brokers caught up in any deal.
Bullet Program: Axiom produced by brokers that describes “small-term” placement programs, gifted high returns in less than 30 days.
Cash Backed: Assets backed by cash, making them far more appealing for banks and placement traders.
Cash Poor: This refers to an individual that is “asset rich, but cash poor.” Even if they may have millions in hard assets, they may have modest to no liquidity to engage in innumerable transactions.
Circumvention: Cutting out the people who introduced you to the chance or broker, with no intent to reward them if you are successful.
Collateral: An asset guaranteeing the line of credit the bank gives, which can be seized upon defaulting from the loan terms. Bank instruments, cash, and Swift MT 760 Blocks your Funds in Favor of Another MT 760s are examples.
Commission: Payments that can be earned by introducing a benefit provided to a prospective client.
Commitment Holder: An individual/institution who is contractually constrained to buy a Debt Instrument Issued by Banks (ex. MTN, BG) bank instrument at an agreed-upon value. Lacking “prior commitment,” the seller of the Debt Instrument Issued by Banks (ex. MTN, BG) bank instrument would never have bought the note because their intent was trading for profit. This term is also similar to the axiom “exit buyer.”
Compliance: The administer of carrying out due exactness on a new placement investor. At this time, the investor must complete the required documentation, usually referred to as the “compliance package.”
Corporate Resolution: A compliance document that questions the client to formally state their relationship to the affair entity they speak for.
Cutting House: Term referring to a bank that makes, issues, and backs discounted bank instruments. The instruments are “cut” and sold to traders at discounts, who then sell them at a higher price to “exit buyers.”
Discount: The thought that bank instruments can be bought at a discount from face value, leave-taking the chance to profit from the resale or the variation between face.
Due Exactness: Axiom referring to the administer of qualifying people by verifying and investigating their background. This is used mutually by placement traders and investors.
Escrow: An escrow benefit is a licensed and regulated companionship that collects, holds, and sends money according to conditions specified by both the consumer and benefits provider. Once the conditions of the consumer are met, funds are at once released to the benefit provider. Typically, in the placement affair, escrow is used to pay upfront fees for “sketchy” services such as leased bank instruments, funding opportunities, and others.
Euroclear: The world’s largest settlement system for securities transactions, covering bonds and equities, as well as bank instruments. This vital and efficient standard allows transactions to be concluded in the least while ensuring safety for both the buyer and seller of the asset.
Exit Buyer: A term used very often, referring to the “buyer in place” purchasing the Debt Instrument Issued by Banks (ex. MTN, BG)”>bank instrument at a higher value from the current owner.
Fishing: When a “prospect” contacts a placement broker with modest to no intent to go forward, but plenty of detailed questions to “fish” for information.
Free and Clear: Also known as “unencumbered,” it means there are no liens or current debt obligations associated with that particular asset.
Fresh Cut: Axiom referring to a recently issued Debt Instrument Issued by Banks (ex. MTN, BG) bank instrument has had only one owner over its existence. Usually, they are accessed at a steep discount from the face.
Funding: A shorter way to allusion “project funding,” usually referred to by those with an insufficient hub to fund their project owing to placement programs.
Gate-Keeper: An individual who claims to be “direct” to a trader with a placement program.
Hypothecate: The administering of assigning a monetary value to an illiquid asset and then extracting liquidity in the form of a loan, using the illiquid asset as collateral.
In-Ground Assets: Land areas that have been appraised based upon ecological assessments of the assets which lie beneath. Many in the placement affair try to enter programs with land containing precious metals, energy equipment, and more. Unfortunately, most have no luck due to the current worldwide liquidity crisis and the high dig costs to detach the asset.
Intermediary: Anyone caught up in a placement transaction, either owing to introduction or compensation, who is NOT the trader or client.
Joker Broker: Term used to describe inexperienced placement brokers who do nothing but waste your time.
Junk Bond: A bond issued by companionship or an institution with poor fiscal integrity makes the bond effectively worthless. Some examples which placement brokers may encounter are Venezuelan bonds, Brazilian bonds, gold bearer bonds, certain corporate bonds, and many others.
Ledger to Ledger: This axiom refers to a conveying between two accounts held by the same bank. For example, a trader may have an HSBC account and send the profits to a client with an uncommon HSBC account. This is far more efficient and avoids doable problems associated with outdoor transfers.
Letter of Consent: A compliance document required for all placement investors, allowing the trade group to verify the investor’s assets bank to bank. This is also known as the “Consent to Verify.”
Line of Credit: Even if it may sound fancy, it’s just a bank loan. Usually, this refers to the loan given to the trader right before trading starts in the placement world.
Managed Buy/Sell: Another synonym for placement programs. It refers to the managed buying and selling of bank instruments by a placement trader.
Mandate: Another term important someone is “direct” to an investment chance or client. Usually, this term is used by brokers.
MT 103: This is an improved version of the first swift MT 100, similar to a wire conveying. Even if it is a direct conveying, the MT 103 has many options that describe conditions and instructions for how the payment should be made.
MT 760: This swift thought is used to block funds in favor of someone other than the investor, collateralizing the asset while allowing for loans against it.
MT 799: This swift thought is used between banks to converse in written form and is usually referred to as “pre-advice.” Typically, the Swift MT 799 is a Written Thought Bank to Bank”>MT 799 will be needed frankly before the Swift MT 760 Blocks your Funds in Favor of Another”>MT 760 Is issued.
Non-Depletion Account: A term used in placement contracts that guarantees the client's funds will never be depleted by the trader.
Non-Solicitation: A compliance document that protects the consultants by having the investor-state they were not solicited.
Paper: A synonym used by placement brokers referring to bank instruments such as bank guarantees or standard term notes.
Paymaster: An individual voted by intermediaries will accept all commission payments on a placement transaction and then deliver them by the contract between the parties. This can be an attorney, one of the brokers, or anyone else the intermediaries feel comfortable with.
Participant: An individual who, with permission, represents the assets/services of another self, entity or themselves, by executing all contractual agreements and related obligations.
Piggyback Program: A newly produced axiom referring to the concept of “pooling” investors to meet the minimum hub supplies of a placement program. For example, 10 investors with 10M would try to meet the 100M minimum, which most placement traders require.
Ping: This term refers to a type of placement program which allows investors to leave funds in their account while the trading bank verifies the full weight is still present on a daily or weekly basis. By all accounts, traders can draw a loan against this “ping”/verification of funds and start trading on the client's behalf. Beware of these programs, as most never go as promised.
Platform: Another synonym for placement programs, which refers to the corporate organization of the trade group.
Power of Attorney: A document signed by the account holder gives authority for someone to act on their behalf, as specified in the contract.
Program Administrator: An individual who claims to be “direct” to a trader with a placement program, accepting all applications and questions from prospective investors.
Promissory Note: In the end, it’s an IOU given from one party to another, stating debt refund obligations and terms. In all actuality, it is really worth nothing to third parties.
Seasoned: Common term that refers to bank instruments, such as standard term notes (MTN’s) and bank guarantees ( Bank Guarantee”>BG’s), which several uncommon beneficiaries over their existence have owned.
Shopping: When an expressive/broker sends out an investor’s compliance package to several “program managers” simultaneously. This is momentously frowned upon and can ruin relationships with real traders.
Slightly Seasoned: A Debt Instrument Issued by Banks (ex. MTN, BG) bank instrument has been traded, having more than one owner over its lifespan before maturity. This is usually a Debt Instrument Issued by Banks (ex. MTN, BG) bank instrument which is discounted moderately, sold at a value of 70-85% of face.
Swift: A system of interaction between banks, allowing account holders to block, conveying, or assign assets as per their question. Examples are the swift MT 100, MT 103, Swift MT 760 Blocks your Funds in Favor of Another”>MT 760, and Swift MT 799 is a Written Thought Bank to Bank”>MT 799.
TTM - Table-top Meeting: A term that refers to a face to face meeting between a buyer/investor and a seller/trader.
Trade Program: A synonym of the term “placement program,” this axiom is often substituted by brokers in the affair.
Trader: A self directly relates to a bank that is issuing discounted bank instruments, which will later be sold to a pre-defined “exit buyer” at a higher value.
Trading Bank: This is the bank where the trader receives the collateral, or assignment thereof, from the investor. Also, this bank provides a line of credit to the trader. Unencumbered: This means the referenced asset has no liens or debt obligations to any third party.