Is the Private Placement Program (PPP) is Safe? Risk-free? let us look at it seriously and objectively.
The funds of an investor will not be turned over to the trader but will always remain in the investor’s account. To start a program, the funds will only need to be locked for a period of time. The one and only safe way are to lock the funds with Swift Medium Term Notes (MTN) MT-799 and Swift MT-760. The MT-760 is a Swift message used to block funds in favour of someone other than the owner, collateralizing the asset via this message, while allowing for loans and liens against it. Most private placements require the investor to send an MT-760 to the trader’s account, allowing the trader to use this swift as a collateral guarantee for their bank. This block will remain in place for the length of the program, which is a minimum of one year.
And here we have another risk for the investor. The fees for blocking a large number of funds via an MT-760 can be more than some people expect. In most cases, a bank will charge 1-2% of the value being blocked for this service. For example, on a 100M bank instrument, this can be 1-2M that the investor must pay, the final conditions have to be negotiated in any case.
The POF (Proof of Funds) will be issued by the Bank where the investor has the resources deposited, demonstrating their quality and amount, but does not enable anyone to move them or dispose of them.
When all the required documents are submitted, including the due diligence and the bank documents, we proceed to verify the funds.
Once these preliminary procedures are successfully completed, within 48 to 72 hours the Program Manager will contact the investor or his representant for a formal presentation and also agree on how to block the funds.
For the last step, the investor will receive and sign an LOI (pre-contract) which later will be delivered to the traders’ office.
When the trade starts, the profits are collected monthly at the bank or paymaster designated by the trader. From the time that the first profit is collected, this capital will be fully available to the client. The investor’s funds must be clear, clean and of course, must have a non-criminal origin. For every asset, the location of the deposited resources should be clearly stated by the bank in question. If any doubts arise at the time of verification, the transaction will be automatically dismissed.
All programs are strictly confidential. The parties involved, including lawyers, brokers and traders, sign a non-disclosure agreement.
Private Placement Programs do pose risks for the investor! Indeed, one of the biggest risks is to have the funds blocked for one year or more. This happens when a transaction was not well prepared and organized. All rules given by financial institutions, the law and international money laundering regulations have to be complied with fully. The purchase and sale of MTNs are “risk-free” provided that the trader is guaranteed the exit to the instrument that was previously acquired (arbitrage trades). The risks for the investor is minimized. Before the start of the program, the trader will “prepare” such a program by planning the future purchases and sales and determining beforehand the benefits that each of them will bring.
In a second phase, the program will be executed, which means nothing but carrying out the purchases and sales that were previously planned and negotiated with the trading houses.
Please Whatsapp to me and we can start to discuss it and I will give you unbiased advice about the Private Placement Program (PPP).
Andeerson Wong
Bank Private Placement Program (PPP) Advisor
Whatsapp: +60192804672
Line, Telegram and WeChat: +60133804672, +60133194134