These programs are not publicly known. Only a few small groups of investors that own funds or Bank Instruments may have access to them exclusively by invitation. Private Placement Programs are born after the economic crisis of 1929
and grown by transferring a part of the revenues to humanitarian projects especially after WW2. Today, even it’s not mandatory by law to transfer apart of the revenue to humanitarian projects.
The private Placement Programs imply no risk for the investor. The purchase/sale of the composed portfolio is 100% “risk free” provided that the trader is guaranteed the exit to the instrument that was previously acquired. The trader
will guarantee such exits by contract and therefore there won’t be any risk to the investor’s capital. Before the start of the program, the trader will prepare such program planning the future purchases and sales and knowing beforehand
the benefits that each of them will bring. In a second phase the program will run, which means nothing but carrying out the purchases/sale that were previously planned and negotiated with the cut houses. The tier 1, platinum traders
are 100% safe as these are supervised by almost every legislative body there is!!
Due to international regulations and practices, it is the issuing banks that are not permitted to sell such securities directly to other banks or other institutional investors. This is only allowed if the papers get to the placement
of the character of a prudent security with an ISIN number and any relevant ISIN number, in the so-called secondary market. On the basis of which the primary market takes over the capital of the private investors with a trading
company as an intermediary that is in each case the role of the interim financing, although such is not actually performed. It is sufficient merely to prove that the purchase price is deposited on the paper.
You are not under any risk when you submit your documents, as they are submitted directly to the trading platform or their associates. In this business the investor always has to take the first step by providing the required documentation
to avoid falling into the “soliciting” rules. 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
nor dispose of them.
Once all the required documentation is submitted (SET Compliance+bank documentation), they proceed to verify the funds/assets the client is investing and to subsequent due diligence (client under study for acceptance). Once these preliminary
investigations are successfully completed, the program Manager will contact the client for a formal presentation and to also a pre-contract (or contract) to be signed and later sent to the traders office. Then, it will be the trader
in person who will contact the client.
The trading business is very profitable because the paper constantly increase on the way to the user in value. For this reason, it is subject to very stringent regulations and the monitoring mechanism of the FED. These include margins
and profits editions. A large part of the trading profits flowing in a generally eligible projects and projects that are within the framework of international development assistance. States, banks, insurance companies, etc., remain
from the actual Trading business. Only specially tested and approved trading platforms may perform this trade. It is thus prevented that the banks make insider trading and money market remain transparent. This is where the private
investor turns on, after the trading platform has exhausted their provisions, banking supervision, the participation of private investors allowed in the program. By this method private funds will be increased; one hand for the
benefit of the investor and on the other hand, is stimulated by the projects funded with the profits of the business. These investments have for many years been under strict rules and conditions of the FED (Federal Reserve Bank,
USA) and instead of the ICC (International Chamber of Commerce Paris, France).
NO, as it represents a violation of Rules of Confidentiality and of the Non-Discovery Agreement. These programs are 100% CONFIDENTIAL_NOT TO BE DISCLOSED EVER & BY INVITATION ONLY!
Traders recognize that clients are bound to have additional questions; that’s only natural. Pretty much everything the client needs to know, though, is contained in the informational material provided. Therefore, clients need to hold
off further inquiries until such time clients’ formal application package has passed compliance. That way, they know that they have a motivated and committed client and a genuine transaction under submission. They would then, of
course, be pleased to spend whatever time is required to ensure that the client’s questions are fully answered.
Certainly; That said, full disclosure and transparency work in reserve in this business. The client needs to prove his financial capability and personal suitability first, and then information about the trading platform
and trading operation will be made available. Not the other way around.
Of course, it is worth noting that throughout the whole process the client remains firmly in control of his/her capital: the client should never be under any obligation to proceed with a private placement; he is always free to pursue
the transaction or to decline the platform trading opportunity altogether-whatever he wants to do.
The Federal Reserve Bank (the FED) does not offer private placement programs to the public, small businesses or high net worth individuals. Nor does it offer programs through agents or brokers. However, it plays a significant role in the PPP.
Private Placement Programs need federal bank authorization. In general, the program is used to raise capital for humanitarian causes through foundations. A trader should register with the Federal Reserve Bank as ultimately no trader can move forward without the Federal Reserve Bank’s authorization following due diligence. The FED checks the funds involved to ensure they are not connected to criminal activity.
PPP’s are not required to register with the Securities and Exchange Commission (SEC), as they were originally intended to help small businesses or groups of investors raise money without going public. However; this leaves the industry open to scams. The Federal Reserve Bank is frequently mentioned as the holder of securities in various forms, such as bonds and bank guarantees, and that the bank is offering an “invitation only” private placement program. Details of scams mentioning the Federal Reserve Bank are on its website.
The reason why a top one hundred World Bank would sell instruments at ANY discount rate is that “fractional banking system”. Dependent or jurisdictions, for every $1 in a bank’s capital accounts, the bank can leverage that money to loan at multiplier effect of greenbacks-generally ranging from 10 or even more times. Therefore if a bank sells (as an example) a $100,000,000 MTN instrument at 30 percent, it has $3+ million in its capital account and can lend recounted $3+ million yearly for the duration of the instrument. The offset is the interest the bank has to pay on the MTN.
The other critical factor to understand is that this fractional system and MTN issuance is mainly “off-balance sheet” financing, so such multi-billion USD MTN’s issuance doesn’t adversely affect the capital structure of integrity of the issuing banks (which is usually ONLY the top twenty-five world EU banks). They are not handling MTN’s issued from tiny banks or banks with feeble balance sheets.
The Cutting House is an extension of the Federal Reserve, which sets policy. The cutting house can sell at such a low amount because its minimum tranche is $500 million and its minimum contract is mostly measured
in the billions of USD. It’s the volume of the transaction which warrants the low price. If the minimum tranching is under $500 million USD, collateral suppliers (which is one rung beneath the cutting House, and which usually buys
from the Cutting House) sells at minimum costs in perhaps the 60’s% (for MTN’s) and 70’s (for BG’s).
The cutting House is in danger. It places is assets (customarily gold deposits) at risk as security to the issuing bank, to promise that cash or liquid assets exit to honor the deep-discount contract. That is why Cutting Houses prefer
buy-sell programs: they’re assured that their exit customers (who buy at increments of less than $500 million, but are track-record performers) won’t default. These exit-buyers are wholesalers, who buy in large quantities and then
resell to smaller wholesalers or retail consumers in smaller increments. The final end-user is generally a pension or annuity fund, which frequently buys at cost as high as in the low 90’s of face value.
The 30 point maximum (20 points if the purchaser is USA based) add-on to the sale price is a range established by the FED. Not all sellers resell at the maximum spread-it depends on whom they’re reselling to. This “spread” applies
only to Fresh Cut note sales, not mark-ups in the secondary (seasoned paper) market.
When a customer does a transaction, the closing is bank-to-bank. The client’s bank issues a conditional swift of funds, meaning that its funds are not spent unless and till the other side commits to broadcasting the contracted-for
MTN’s. There is not any “Trust Me” concerned. If at any time there’s a non-delivery of the contracted monetary instruments at the contracted price, the whole contract is ended for non-performance. No buyer is locked-into stumping
up the instruments it won’t receive. The reason the System is meant to aid the “buy and resell” wholesale market rather than the “buy and keep” retail market is perhaps because the contract typically requires that a portion of
the resulting profit is used to fund projects-development, humanitarian, educational, infrastructural, for example.-around the globe. This is one key reason how major capital projects (some with minor profitability and/or high
risks of profitability) are subsidized. This is how many relief efforts and substructure in war-torn areas are financed. The more military conflicts and destruction and natural tragedies there are, the more exaggerated is the need
for funds-and one important provider of such funds is a portion of the “price spread” on these funds-first and/or collateral-first purchases and resale’s. The purchaser must COMMIT to spending some of the gigantic profits on funding
worldwide approved projects or causes. If the client/consumer doesn’t have a project, the Collateral Provider/Cutting house can supply a project.
A buyer’s funds aren’t AT ANY effective RISK. A Buyer’s funds are ALWAYS used to buy liquid fiscal instruments which are worth much more the applicable price: the purchase is often collateralized at close to a 200% level. Example: buy at 30% and have a ready wholesaler ready to market in the 60% range. Whether the instruments are bought at 31% or 81%: they are issued by credit-worthy/AA or AA- rated banks, possess market competitive interest rates, and have a retail market value in the 90’s%. So, as long as their trader can buy low and sell high, a profit will be made with NO effective risk. The customer is contracting in some cases without delay with the trading bank, or other verifiable financial institutions and/or banks. Closings happen at major banks or legal corporations-there isn’t any “coffee table closing” at a restaurant. The quantity of profit is a result of volume-USD involved and number of times a bank per day when a provider is able to buy and resell into the monetary market. Most Cutting Houses do one tranche/bank/day. The largest traders can do several such tranches-from different sources to different exit-buyers.
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