Basic Rules for engaging in a Private Placement Program

  • The customer's bank must be a TOP50.
  • It can´t be a bank from a Communist country.
  • The two options available to access a Private Placement Program are: 1. Cash 2. Any of the following financial instruments: BG (Bank Guarantee), CD (Certificate of Deposit), MTN (Medium Term Notes), SBLC (Stand By Letter of Credit), SKR (Safekeeping Receipt). These instruments should have FULL BANK RESPONSABILITY by the issuing bank.
  • The asset or cash is not feasible unless the bank is based in Europe. Any bank from South America or Asia must be based in Europe and confirm the client's assets through a "Confirmation Letter" from Europe (For Example: London)
  • If the bank is not strong enough to fend for yourself, you can try to get a bank will take full bank responsibility for banking asset.
  • If you are not the owner of the asset or cash, you can´t enter into the program unless you be assigned to the bank account where the asset is deposited.
  • The asset will be blocked the time estimated by contract. So before being blocked, your asset must have a reasonable life cycle (maturity date) that can be worked.
  • The bank must be able to block the assets through a SWIFT MT-760.
  • If the asset is gold, Hallmark documents must be provided

Ever since the irruption of many brokers who claim to be experts on the sector, besides declaring to have contacts with alleged "platforms and/or Traders, we noticed the absolute lack of knowledge there is about banking tools such as the issuance of a SWIFT MT-760. For this reason, and to increase the awareness of the general public, we decided to create this article to explain the actual operative for issuing this type of "Guarantee".

We will analyze what a SWIFT is, on what is based the issuance of a MT-760 as well as the emission operative.

First of all, we would like to punctuate that SWIFT is a Belgian company created in 1973. Currently, SWIFT has advanced by leaps and bounds and nowadays more than eight thousand banks use the system daily as a tool for any comercial activity.

What is a MT-760?

The MT-760 is a kind of SWIFT message known as Guarantee that, as its name suggests, works as a bank guarantee. Therefore, it is important be warned about its danger before malicious individuals. The investor's Bank issues a SWIFT MT-760 using an asset as base (CASH, BG, CD, MTN, etc). This asset is issued in favor of the recipient (the recipient of the MT-760). This kind of message is commonly used in the Commodities sector or in businesses such as the import or export of any product. The issuing bank uses the asset as a guarantee in favor of the client receiving the MT-760. It is also important to note that this is the classic locking option when it comes to participating in a Private Placement Program.

SWIFT MT-760 emission operative

Prior to the emission of a SWIFT MT-760, the Issuing Bank will emit a SWIFT MT-799 (Free Message). The MT-799 is issued as a Pre-Advice (notifying the receiving bank that a guarantee in the form of MT-760 will be issued). Then, in the next 24/48 hours, the receiving bank emits a SWIFT MT-799 to the Issuing Bank confirming that they are ready to receive the MT-760. In the next 24/48 hours, the client's bank proceeds to the issuance of the SWIFT MT-760, with the acceptance of the receiving bank. Thus, the asset is locked in favor of the recipient for the time specified in the text of the SWIFT message. To explain it in a simpler and more graphical manner, this will appear detailed on the Image 1 located below the text.

If a MT-760 is issued, can it be revoked?

Absolutely NO. Many unscrupulous brokers and alleged platforms want the investor to believe that the MT-760 can be withdrawn without inconveniences when the investor orders it. The reality is quite different. When a SWIFT is issued and accepted by the receiving bank it is totally IRREVOCABLE. It can only be revoked if the recipient of the MT-760 gives consent to his/her bank to proceed with the withdrawal.

What assurance is there regarding a MT-760?

When a client issues a SWIFT MT-760 for a period of (for example) 10 months, in addition to being irrevocable, this involves serious risks since the so-called platforms or intermediaries who claim to have contact with a trader can interact with the asset and this lead to its loss. And these are terrible consequences for the client. We advise the client to make sure that the person he/she will be working with is a real Trader. Once the Trading agreement is in front of the client, they should ensure that they are dealing with the right person/company.

What happens if I issue a SWIFT MT-760 to a real Trader?

Prior to the issuance of the MT-760, the signing of the Trading agreement will take place. Here we will find the banking coordinates of the Traders bank where the client will need to issue the SWIFT. Upon the issuance and receipt of the MT-760, it will be the same trader the one in charge of "monetizing" such SWIFT, and with the amount of credit obtained, the program will be accessed. It is important to point out that, being the Traders company the recipient of the SWIFT and the one in charge of obtaining the credit line, it will also be the one responsible for its refund and for confronting all incurred expenses

Why Investors are unable to enter in a Private Placement Program

  1. Brokers who contact directly to investors saying they are members of the Trader´s Office. Absolutely false. Trader's Office never contact with investors at an earlier stage. Program Manager is the person who provides the first contact with the client once the operation has been submitted and verified.
  2. "Trading Platforms" which say they have direct contact with a real Trader and after you can verify that´s not true. They never show you a real trading contract, Trader´s name is not identified, etc...
  3. Investors who do not have enough capital to access to the program and they decide to rental an instrument (leasing). Instruments of leasing are not valid for entry to PPP because the investor is not the "applicant" (owner) of assets (he is only the beneficiary) and makes not possible the issuance of a Swift MT-760 (one of the two blocking options) in favor of banking trader coordinates.
  4. Investors who do not have the money in a bank acceptable. They have their funds in an offshore bank that does not allow the verification bank to bank.
  5. Investors who do not have a good explanation from the origin of money. The capital which will access into the program must be good, clean, clear and non-criminal origin.
  6. Investors who do not have a qualifying asset to be worked. Bonds considered "trash" or cases in which the asset is deposited in a security house and has no full bank responsability. Any asset to be worked must have full bank responsability by a TOP50 Bank.
  7. Investors who try to enter into the program following their own rules. They indicate the procedure to follow, the way the asset must be blocked, etc. This is not the right way to participate in a PPP. In this financial opportunity, the process is marked by the Trader and not by the investor. If the investor does not follow the procedure imposed by the trader, he is not valid for this financial opportunity.
  8. Investors who do not cooperate enough with the management group or they are delayed too much when they have to send the documentation requested by the management group.
  9. Investors who has an asset can´t be verified on a bank to bank basis
  10. Investors who are in a black list and not exceed the due diligence.

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