| The process to enter a trading platform or | | | | blacklisted. |
| private placement program is important to | | | | 5. Banking stage. Next, the client contacts the |
| understand to be successful. Unfortunately much | | | | bank to initiate the private placement transaction, |
| confusion and misinformation has circulated | | | | which includes blocking the funds/assets or |
| concerning how to reach a private placement | | | | conditionally assigning or transferring funds in |
| program trader or private placement platform, | | | | favor of the trader. Banks hesitate to do this as |
| which is why we will shed light on the structure in | | | | they lose the asset on their balance sheet and |
| this article. The following is a brief summary for | | | | lose the power to leverage the funds 25x to loan |
| those high net individuals interested in using a | | | | out to others, thereby decreasing the bank's |
| trading platform for funding humanitarian projects | | | | potential income. The client must hold steady as |
| and commercial real estate projects. | | | | remind the bank that it is his/her money. Using a |
| 1. Client Information Sheet (CIS) and Proof of | | | | top banking center with a large amount of assets |
| Funds (POF). A client must first submit the CIS | | | | helps mitigate this obstacle as 100M up to $1B |
| with POF to even be considered for the | | | | may not hurt a larger bank as much as it would a |
| opportunity. The CIS helps the platform screen | | | | smaller one. |
| out those who may have fraudulent assets or | | | | 6. Line of credit established. The clients funds will |
| clients with criminal background as neither of | | | | be used to draw a line of credit (LOC) for trade. |
| these will be cases will result in a successful | | | | This may or may not require moving funds into |
| trade. Furthermore, the asset (liquid cash, | | | | the traders bank of choice. |
| medium term not (MTN), bank guarantee (BG), | | | | 7. Trader obtains banking instrument for trade. |
| precious gems) must be verified as an asset that | | | | After acquiring the LOC, the trader will then |
| can be used in trade. | | | | identify his exit buyers before purchasing the |
| 2. Compliance process. After CIS is send, a | | | | banking instrument (medium term note, bank |
| compliance process is undertaken where the | | | | guarantee, or other) to trade. The high net worth |
| platform conducts due diligence to ensure the | | | | individual will then receive profits on a scheduled |
| validity and character of the client in depth. Clients | | | | basis for usually a period of 40 weeks, although |
| with over $100M in assets are usually well known | | | | different payment terms may be made. |
| to the private placement program and private | | | | 8. Funding. Profits are then used to fund |
| placement traders. | | | | humanitarian or commercial real estate projects, |
| 3. Contract state. After Due Diligence is | | | | usually in underdeveloped nations. Usually 70% |
| performed by the trading platform, a contract is | | | | will be used for humanitarian use while the rest |
| issued. Generally this is where arrogant clients | | | | remains for "administrative use," in other words, |
| stop as many believe they are above the trader | | | | at the discretion of the client. The FED oversees |
| and can negotiate terms. Furthermore, some | | | | how the remaining 30% is used as this is a highly |
| clients will turn to their attorneys for advice which | | | | regulated transaction. |
| is futile as most lawyers do not understand the | | | | 9. Other pointers. The transaction NEVER |
| industry and have not been exposed to a real | | | | requires any upfront fees. Moreover, after a |
| platform. | | | | successful trading period ends, the client may wish |
| 4. Official signing of contract. If contract terms | | | | to reenter the trade depending on the status of |
| are agreed upon, both the private placement | | | | projects. You should initially work with someone |
| trader and high net worth client sign the | | | | who is well versed in PPP to help guide you in the |
| agreement, hence "closing the deal." At this point | | | | process although this is a basic template to follow. |
| a client must follow through with the transaction | | | | Experience and relationships are key in this area, |
| without hesitation or he/she risks never being | | | | so if one is not familiar with the transaction steps |
| allowed in the private placement program trade | | | | above is it highly recommended to consult with |
| again. The client will be labeled as a | | | | someone who has dealt with a private placement |
| "non-performer" and may at this point become | | | | trader or facilitator. |