Description:

Can be used to make payments or transfer value to a 3rd party.

Appears in:

• Acquisition Leveraged Finance
• Borrowing Base Facility
• Certificate of Deposit (Broker Acting as Principal)
• Certificate of Deposit (Broker Acting on Behalf of Client)
• Certificate of Deposit (Direct Interaction with Clients)
• Credit Facility
• Credit Linked Note
• Deposit
• Deposit (Direct with Client)
• Deposit (via Broker)
• Discounting of Receivables With or Without Recourse
• Documentary Collections (Export)
• Documentary Collections (Import)
• Dual Currency Deposit (DCD)
• Equities
• FX Prime Brokerage (Continuous Linked Settlement)
• FX Prime Brokerage (Non-Continuous Linked Settlement)
• FX Spot
• Hedge Fund Derivatives
• Import Guarantee (Standby Letter of Credit)
• International Services
• Inventory Financing
• Letter of Credit and Guarantee Syndication
• Liquidity Support Facility
• Multi-Product Facility
• Non-Deliverable Forward
• Overdraft Facility
• Performance Bond
• Revolving Credit Facility (Bilateral Agreement)
• Revolving Credit Facility (Syndicated)
• Standby Facility
• Supplier Finance

Addressed by:

• Approval to Make 3rd Party Payment: Compliance approval is required for 3rd party payment and monitoring.
• Bank to Bank Transfers (Low Risk Jurisdictions): Payment can only be made via bank-to-bank transfers from countries with strong AML controls (typically low-risk jurisdictions).
• Book Entry or DVP: The product is not easily transferable, and payment flows are restricted due to book entry (recorded electronically) and Delivery vs. Payment (DVP), a settlement system that stipulates cash payment must be made prior to or simultaneously with the delivery of the security to a specified party.
• Know Your Business (KYB): Includes taking steps to gain an understanding of a customer's business activities, including the nature of the business to be taken with a bank and the anticipated volume and value of the business.
• Limits on 3rd Party Payments: Restricted capacity to make 3rd party payments.
• Payment Terms Defined in Agreement or Contract: A product or service requires entering into a legally binding agreement or contract between specified parties that outlines the drawdown and repayment terms.
• Restricted to Regulated Firm: Restrictions on the types of customers (regulated Financial Institutions) to whom the product can be offered.
• Source of Wealth (SOW): The Source of Wealth (SOW) of the client is understood.
• SWIFT Confirmation: Requires confirmation via SWIFT that payment will be used solely for agreed purposes pre-release and post-payment
• Transactional Due Diligence (TDD): Conducts a detailed examination of specific transactions identified as being higher risk.
• Transparent Flow of Funds: Maintains a transparent flow of funds.