Some Point on PPO/PPP:-
The process to enter a trading platform or private placement program is important to understand to be successful. Unfortunately much confusion and misinformation has circulated concerning how to reach a private placement program trader or private placement platform, which is why we will shed light on the structure in this article. The following is a brief summary for those high net individuals interested in using a trading platform for funding humanitarian projects and commercial real estate projects.
1. Client Information Sheet (CIS) and Proof of Funds (POF). A client must first submit the CIS with POF to even be considered for the opportunity. The CIS helps the platform screen out those who may have fraudulent assets or clients with criminal background as neither of these will be cases will result in a successful trade. Furthermore, the asset (liquid cash, medium term not (MTN), bank guarantee (BG), precious gems) must be verified as an asset that can be used in trade.
2. Compliance process. After CIS is send, a compliance process is undertaken where the platform conducts due diligence to ensure the validity and character of the client in depth. Clients with over $100M in assets are usually well known to the private placement program and private placement traders.
3. contract state. After Due Diligence is performed by the trading platform, a contract is issued. Generally this is where arrogant clients stop as many believe they are above the trader and can negotiate terms. Furthermore, some clients will turn to their attorneys for advice which is futile as most lawyers do not understand the industry and have not been exposed to a real platform.
4. Official signing of contract. If contract terms are agreed upon, both the private placement trader and high net worth client sign the agreement, hence closing the deal. At this point a client must follow through with the transaction without hesitation or he/she risks never being allowed in the private placement program trade again. The client will be labeled as a non-performer and may at this point become blacklisted.
5. Banking stage. Next, the client contacts the bank to initiate the private placement transaction, which includes blocking the funds/assets or conditionally assigning or transferring funds in favor of the trader. Banks hesitate to do this as they lose the asset on their balance sheet and lose the power to leverage the funds 25x to loan out to others, thereby decreasing the banks potential income. The client must hold steady as remind the bank that it is his/her money. Using a top banking center with a large amount of assets helps mitigate this obstacle as 100M up to $1B may not hurt a larger bank as much as it would a smaller one.
6. Line of credit established. The clients funds will be used to draw a line of credit (LOC) for trade. This may or may not require moving funds into the traders bank of choice.
7. Trader obtains banking instrument for trade. After acquiring the LOC, the trader will then identify his exit buyers before purchasing the banking instrument (medium term note, bank guarantee, or other) to trade. The high net worth individual will then receive profits on a scheduled basis for usually a period of 40 weeks, although different payment terms may be made.
8. Funding. Profits are then used to fund humanitarian or commercial real estate projects, usually in underdeveloped nations. Usually 70% will be used for humanitarian use while the rest remains for administrative use, in other words, at the discretion of the client. The FED oversees how the remaining 30% is used as this is a highly regulated transaction.
9. Other pointers. The transaction NEVER requires any upfront fees. Moreover, after a successful trading period ends, the client may wish to reenter the trade depending on the status of projects. You should initially work with someone who is well versed in PPP to help guide you in the process although this is a basic template to follow. Experience and relationships are key in this area, so if one is not familiar with the transaction steps above is it highly recommended to consult with someone who has dealt with a private placement trader or facilitator.
As a summary of the process involved for entering a program:
• An investor with USD100M and up can be an applicant for a Private Placement Investment Program.
• This business is entirely private. To get access to these investment programs, the investor needs to send his preliminary documentation to some broker whom the investor trusts to be in direct contact with the Trading Group. There is no other way for the investor to make contact with the Trading Group at this stage.
• After the investor has sent his paperwork, the Trading Group will proceed to its Due Diligence on the applicant, and if the response is positive, and cleared, then the program manager in the trading group will contact the investor by phone and/or fax and invite the investor to a face-to-face meeting. However, usually, if the investor is not willing to travel, everything can be done by fax, phone, and courier mail. If not cleared, then the program manager will contact the broker, and then tell him that the investor did not qualify, and then the broker forwards on that information to the investor who often gets upset and might discredit the broker and/or intermediary, maybe on a due diligence message board.
• During the contact with the investor, the trader will explain the program’s terms/conditions, the guarantees, the contract details, as well as the next step required to start the program. Then, it’s necessary and required by the program terms, the investor will get instructions to open a new sole signatory bank account at the Trading Bank for transferring the funds there. The Trader has prepared everything; so the investor is able to open the Bank account without delay (because he has already been cleared). Otherwise, the investor will be invited to prepare his own bank to block/reserve the funds into his own account at his own bank for one year without any transfer of money.
• The investor will receive a contract which states the total gross yield, the percentage of the gross profit reserved for projects, the percentage for the Trading Group, and the percentage for commissions/fees to be deducted for brokers/intermediaries. The net return to the investor will be wired to another investor returns account that can be located in any bank worldwide. If the client accepts the contract, the contract is signed, and the program is ready to start.
• The Trader is now able to leverage the investor’s reserved money 10 times and is now able to back up the arbitrage transaction with the money, a credit line that remains in the bank account that is screened before each arbitrage buy-sell transactions. Trading now continues, and the profit is paid out once per week (or per day/month, or whatever depending on the program terms, to the investor. The investor instructs the bank to wire out the commission part to the broker’s bank coordinates. The program continues the above loop for each week until the end of the program, usually 40 banking weeks.
The programs can work with cash only. This fact does not mean that the investor will only be accepted in the case he owns cash. The investor can be accepted by some Trading Groups also with financial assets like MTN, BG, CD, SBLC, SKR, etc. that the Trader then will use for getting his own line of credit at the Trading Bank to run the program. In this case, the investor will have the advantage of profiting both from the program, and still from the yield coming from the instrument (i.e. the scheduled interest of a CD, or MTN).
Always remember 8 things:-
1. Client Information Sheet (CIS) and Proof of Funds (POF). A client must first submit the CIS with POF to even be considered for the opportunity. The CIS helps the platform screen out those who may have fraudulent assets or clients with criminal background as neither of these will be cases will result in a successful trade. Furthermore, the asset (liquid cash, medium term not (MTN), bank guarantee (BG), precious gems) must be verified as an asset that can be used in trade.
2. Compliance process. After CIS is send, a compliance process is undertaken where the platform conducts due diligence to ensure the validity and character of the client in depth. Clients with over $100M in assets are usually well known to the private placement program and private placement traders.
3. contract state. After Due Diligence is performed by the trading platform, a contract is issued. Generally this is where arrogant clients stop as many believe they are above the trader and can negotiate terms. Furthermore, some clients will turn to their attorneys for advice which is futile as most lawyers do not understand the industry and have not been exposed to a real platform.
4. Official signing of contract. If contract terms are agreed upon, both the private placement trader and high net worth client sign the agreement, hence closing the deal. At this point a client must follow through with the transaction without hesitation or he/she risks never being allowed in the private placement program trade again. The client will be labeled as a non-performer and may at this point become blacklisted.
5. Banking stage. Next, the client contacts the bank to initiate the private placement transaction, which includes blocking the funds/assets or conditionally assigning or transferring funds in favor of the trader. Banks hesitate to do this as they lose the asset on their balance sheet and lose the power to leverage the funds 25x to loan out to others, thereby decreasing the banks potential income. The client must hold steady as remind the bank that it is his/her money. Using a top banking center with a large amount of assets helps mitigate this obstacle as 100M up to $1B may not hurt a larger bank as much as it would a smaller one.
6. Line of credit established. The clients funds will be used to draw a line of credit (LOC) for trade. This may or may not require moving funds into the traders bank of choice.
7. Trader obtains banking instrument for trade. After acquiring the LOC, the trader will then identify his exit buyers before purchasing the banking instrument (medium term note, bank guarantee, or other) to trade. The high net worth individual will then receive profits on a scheduled basis for usually a period of 40 weeks, although different payment terms may be made.
8. Funding. Profits are then used to fund humanitarian or commercial real estate projects, usually in underdeveloped nations. Usually 70% will be used for humanitarian use while the rest remains for administrative use, in other words, at the discretion of the client. The FED oversees how the remaining 30% is used as this is a highly regulated transaction.
9. Other pointers. The transaction NEVER requires any upfront fees. Moreover, after a successful trading period ends, the client may wish to reenter the trade depending on the status of projects. You should initially work with someone who is well versed in PPP to help guide you in the process although this is a basic template to follow. Experience and relationships are key in this area, so if one is not familiar with the transaction steps above is it highly recommended to consult with someone who has dealt with a private placement trader or facilitator.
As a summary of the process involved for entering a program:
• An investor with USD100M and up can be an applicant for a Private Placement Investment Program.
• This business is entirely private. To get access to these investment programs, the investor needs to send his preliminary documentation to some broker whom the investor trusts to be in direct contact with the Trading Group. There is no other way for the investor to make contact with the Trading Group at this stage.
• After the investor has sent his paperwork, the Trading Group will proceed to its Due Diligence on the applicant, and if the response is positive, and cleared, then the program manager in the trading group will contact the investor by phone and/or fax and invite the investor to a face-to-face meeting. However, usually, if the investor is not willing to travel, everything can be done by fax, phone, and courier mail. If not cleared, then the program manager will contact the broker, and then tell him that the investor did not qualify, and then the broker forwards on that information to the investor who often gets upset and might discredit the broker and/or intermediary, maybe on a due diligence message board.
• During the contact with the investor, the trader will explain the program’s terms/conditions, the guarantees, the contract details, as well as the next step required to start the program. Then, it’s necessary and required by the program terms, the investor will get instructions to open a new sole signatory bank account at the Trading Bank for transferring the funds there. The Trader has prepared everything; so the investor is able to open the Bank account without delay (because he has already been cleared). Otherwise, the investor will be invited to prepare his own bank to block/reserve the funds into his own account at his own bank for one year without any transfer of money.
• The investor will receive a contract which states the total gross yield, the percentage of the gross profit reserved for projects, the percentage for the Trading Group, and the percentage for commissions/fees to be deducted for brokers/intermediaries. The net return to the investor will be wired to another investor returns account that can be located in any bank worldwide. If the client accepts the contract, the contract is signed, and the program is ready to start.
• The Trader is now able to leverage the investor’s reserved money 10 times and is now able to back up the arbitrage transaction with the money, a credit line that remains in the bank account that is screened before each arbitrage buy-sell transactions. Trading now continues, and the profit is paid out once per week (or per day/month, or whatever depending on the program terms, to the investor. The investor instructs the bank to wire out the commission part to the broker’s bank coordinates. The program continues the above loop for each week until the end of the program, usually 40 banking weeks.
The programs can work with cash only. This fact does not mean that the investor will only be accepted in the case he owns cash. The investor can be accepted by some Trading Groups also with financial assets like MTN, BG, CD, SBLC, SKR, etc. that the Trader then will use for getting his own line of credit at the Trading Bank to run the program. In this case, the investor will have the advantage of profiting both from the program, and still from the yield coming from the instrument (i.e. the scheduled interest of a CD, or MTN).
Always remember 8 things:-
- Work Hard.
- Expect Less.
- Dont Commit Before Due Dilligence.
- Dont Go For Joker Broker's High Yielding Words.
- Keep Patience.
- Have Faith.
- Be Truthful.
- Always Learn From Mistakes.
