Description:
Difficult to identify the fund flows and includes transactions which are not transparent.
Appears in:
Addressed by:
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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.
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Documentary Evidence to Identity Parties and Details of Transaction: Agreement supported by underlying documentation (i.e., bills of lading, invoices, shipping documents, warehouse receipts, and warrants) that contains details of all parties to the transaction, currency, value, all countries involved, and the purpose of the transaction.
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Documentary Evidence to Support Conditions of Agreement Met: Agreement supported by underlying documentation (bills of lading, invoices, shipping documents, warehouse receipts, and warrants) containing details of all parties involved in the transaction, currency, value, all countries involved, the purpose of the transaction, and allowing payment only when all conditions outlined in the terms of the instrument have been met.
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Originator and Beneficiary Information: Require that originator and beneficiary information be included in the payment.
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Restricted to Regulated Firm: Restrictions on the types of customers (regulated Financial Institutions) to whom the product can be offered.
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SWIFT Confirmation: Requires confirmation via SWIFT that payment will be used solely for agreed purposes pre-release and post-payment
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Traded on Regulated Exchange: Traded on a regulated exchange in a low-risk jurisdiction.
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Transactional Due Diligence (TDD): Conducts a detailed examination of specific transactions identified as being higher risk.
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Transparent Flow of Funds: Maintains a transparent flow of funds.