Key Documents: Syllabus

A letter written by a bank officer on behalf of a customer, attesting to the current balance and good standing of an account holder.
A bank instrument, guaranteeing a certain face value for an investor, while collecting an annual interest before expiring upon maturity.
financial product offered by banks to account holders who agree to leave their funds on deposit for a pre-defined period. This allows investors to collect a higher annual interest, while securing their money in a low risk venture.
One of the compliance documents typically required for private placement programs. This document asks for basic information such as the contact details, and line of business the applicant is in.
DTC provides clearing, settlement and information services for equities, bonds, securities, money market instruments and over-thecounter derivatives. This medium is used in private placement programs to transfer/assign assets to a trader, from an investor
An official document outlining all fees due to intermediaries upon the completion of transaction. This is critical for any private placement broker to understand, and utilize.
An agreement between two entities outlining compensation, fees, and the obligations of both parties in relation to a specific business venture. This is the most common legal structure for private placement programs.
In some cases, this form will substitute for the client information sheet. Just like the CIS, it requests contact details and other related information. Also, this phrase is used when referring to the “Know your Client” law, which many investment markets enforce. It states that you must know your client well, and unless deceived, you can incur certain liabilities for future problematic actions of the client.
letter provided by investors interested in a private placement programs, defining their unsolicited interest to enter the investment transaction. This document can also be used for areas outside of private placement, specially where solicitation laws apply.
This is the loan value that a bank/lender will provide after evaluating an assets worth. Usually, this is used for hard/illiquid assets, and is stated in % in relation to the asset’s appraisal value (Loan/Appraisal Value = LTV %).
A tradable and discountable debt instrument issued by banks, collecting an annual interest before expiring upon maturity with a specified face value.
(Non-Circumvention, Non-Disclosure Agreement): An agreement between two parties defining the boundaries and limitations of their relationship. Typically, this agreement is used by private placement brokers to “protect” from future circumvention.
The process of allowing another individual to temporarily show your assets as their own, with the fee dependent upon the time it’s utilized. Also, this phrase can refer to a bank statement, or other financial document, proving the assets of a prospective investor.
A formal description of an investment opportunity which is created to comply with various federal securities regulations. This outlines all details of the “private placement” offered, as well the obligations of both parties involved.
A private investment program which trades discounted bank instruments (MTN/BG) for profit in the secondary market.
Phrase used by private placement brokers confirming the readiness of an investor to satisfy requirements, and more forward with an opportunity. This statement can also be made in the form of a document, which some programs may require.SBLC(Standard 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 contractual commitment with a third party. In the private placement world, this term is often associated with fraudulent companies that offer bank instrument leasing and/or project funding “opportunities”.
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 contractual commitment with a third party. In the private placement world, this term is often associated with fraudulent companies that offer bank instrument leasing and/or project funding “opportunities”.
A document created by a bank, on behalf of its customer, which specifies all details of an asset, and confirms its current existence on deposit.
This is a signed document provided by a financial institution, verifying the current balance and history of an account holder. This is similar to a BCL, but the verbiage may be different.

Private Placement: Syllabus

A term usually referred to by inexperienced brokers. It refers to the investor’s bank reserving funds in favor of another individual, without actually encumbering or moving the asset.
Refers to a note or bank instrument which is collateralized by hard assets, not liquid assets. This can be gems, gold, art, diamonds, or other rare valuables.
Transferring ownership, or rights to use the collateral, to another individual for a specific period of time. Some traders require this for private placement investments.
A debt instrument issued by banks to access immediate liquidity, providing an annual interest and face value for the purchaser. BG’s and MTN’s are common examples.
A phrased typically used by brokers, referring to the private verification of assets from the investor’s bank officer, to the trader’s/seller’s bank officer.
The individual listed as the owner of a debt instrument, such as a medium term notes (MTN‘s) or bank guarantees (BG’s).
This is a term used in any real private placement contract. It states that the trader, or investment manager, will use their best efforts to achieve high profits. For example, a contract may say “profits will be achieved on a best efforts basis”.
general phrase which refers to blocking liquid assets in favor of another person. This is most commonly achieved via swift MT 760, unless you are in the USA.
Also known as a “daisy chain”, this frequently used term describes the “layers” of brokers that one must go through before they reach a trader. Unfortunately, there are usually several private placement brokers involved in any deal.
Phrase created by inexperienced brokers that describes “short-term” private placement programs, promising high returns in less than 30 days.
Assets which are backed by cash, making them far more appealing for banks and private placement traders.
Cutting out the people who introduced you to the opportunity or broker, with no intent to reward them if you are successful.
An asset guaranteeing the line of credit the bank gives, which can be seized upon default from the loan terms. Bank instruments, cash, and MT 760’s are some examples.
Payments which can be earned by introducing a service provide to a prospective client.
An individual/institution who is contractually obligated to purchase a bank instrumentat an agreed upon value. Without “prior commitment”, the seller of the bank instrument would never have purchased the note because their intent was trading for profit. This term is also similar to the phrase “exit buyer”.
The process of completing due diligence on a new private placement investor. At this time, the investor must complete the required documentation, usually referred to as the “compliance package”.
A compliance document which asks the client to formally state their relationship to the business entity they represent.
Term referring to a bank which creates, 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”.
The idea that bank instruments can be purchased at a discount from face value, leaving the opportunity to profit from resale, or the difference between face Due Dilligence: Phrase referring to the process of qualifying people by verifying and investigating their background. This is used mutually by private placement traders and investors.
An escrow service is a licensed and regulated company that collects, holds, and sends money, according to conditions specified by both the customer and service provider. Once the conditions of the customer are met, funds are immediately released to the service provider. Typically, in the private placement business, escrow is used to pay upfront fees for “sketchy” services such as leased bank instruments, funding opportunities, and others.
The world’s largest settlement system for securities transactions, covering bonds and equities, as well as bank instruments. This important and efficient medium allows transactions to be completed remotely, while ensuring safety for both the buyer and seller of the asset.
A term used very frequently, referring to the “buyer in place” purchasing the bank instrument at a higher value from the current owner.
When a “prospect” contacts a private placement broker with little to no intent to move forward, but plenty of detailed questions in an effort to “fish” for information.
Also known as “unencumbered”, it means there are no liens or current debt obligations associated with that particular asset.
Phrase referring to a recently issued bank instrument that has had only one owner over the course of its existence. Usually, they are accessed at a steep discount from face.
A shorter way to reference “project funding”, usually referred to by those with insufficient capital to fund their project through private placement programs.
This is a word that should NEVER be used in any investment niche, especially one as volatile as the private placement market. Though it may not seem like a key term, it is for one VERY big reason. Any broker or trader that “guarantees” certain profit amounts is breaking the law, and will NEVER fulfill their claims.
The process 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.
Land areas which have been appraised based upon geological assessments of the assets which lie beneath. Many in the private placement business try to enter programs with land containing precious metals, energy materials, and more. Unfortunately, most have no luck due to the current worldwide liquidity crisis, and the high excavation costs to isolate the asset.
Anyone involved in a private placement transaction, either through introduction or compensation, who is NOT the trader or client.
Term used to describe inexperienced private placement brokers who do nothing but waste your time.
A bond issued by a company or institution which has poor financial integrity, making the bond effectively worthless. Some examples which private placement brokers may encounter are: Venezuelan bonds, Brazilian bonds, gold bearer bonds, certain corporate bonds, and many others.
This phrase refers to a transfer 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 a different HSBC account. This is far more efficient, and avoids possible problems associated with external transfers.
A compliance document required for all , allowing the trade group to verify the investor’s assets bank to bank. This is also known as the “Authorization to Verify”.
Though it may sound fancy, it’s just a bank loan. Usually in the private placement world, this refers to the loan given to the trader right before trading starts.
Another synonym for private placement programs. It refers to the managed buying and selling of bank instruments by a private placement trader.
Another term meaning someone is “direct” to an investment opportunity or client. Usually, this term is used by very inexperienced brokers.
This is an improved version of the original swift MT 100, which is similar to a wire transfer. Though it is a direct transfer, the MT 103 has a large number of options which describe conditions and instructions for how the payment should be made.
This swift message is used to block funds in favor of someone other than the investor, collateralizing the asset while allowing for loans against it.
This swift message is used between banks to communicate in written form, and is usually referred to as “pre-advice”. Typically, the MT 799 will be needed directly before the MT 760 Is issued.
term used in private placement contracts which guarantees the funds of the client will never be depleted by the trader.
A compliance document that protects the consultants by having the investor state they were not solicited.
A synonym used by private placement brokers referring to bank instruments such as bank guarantees or medium term notes
An individual elected by intermediaries who will accept all commission payments on a private placement transaction, and then distribute them in accordance to the agreement between the parties. This can be an attorney, one of the brokers, or anyone else the intermediaries feel comfortable with.
Another synonym for private placement programs which refers to the corporate structure of the trade group.
A document signed by the account holder which gives authority for someone to act on their behalf, as specified in the agreement.
Common term that refers to bank instruments, such as medium term notes (MTN’s) and bank guarantees (BG’s), which have been owned by several different beneficiaries over their existence.
When a representative/broker sends out an investor’s compliance package to several “program managers” at the same time. This is greatly frowned upon, and can ruin relationships with real traders.
An individual who legally represents the assets/services of another person, entity or themselves, by executing all contractual agreements and related obligations.
A bank instrument which has been traded, having more than one owner over its lifespan before maturity. This is usually a bank instrument which is discounted moderately, sold at a value of 70-85% of face.
A system of communication between banks, allowing account holders to block, transfer, or assign assets as per their request. Examples are the swift MT 100, MT 103, MT 760, and MT 799.
A term which refers to a face to face meeting between a buyer/investor, and a seller/trader.
A synonym of the term “private placement program”, this phrase is frequently substituted by brokers in business.
A person with a direct relationship to a bank that is issuing discounted bank instruments, which will later be sold to a pre-defined “exit buyer” at a higher value.
This is the bank where the trader receives the collateral, or assignment thereof, from the investor. Also, this bank provides the line of credit to the trader.
This means the referenced asset has no liens or debt obligations to any third party.