BROKER TOOLKIT
KYC - Know Your Customer
The KYC is usually the first step in any referral and is a comprehensive overview of the clients circumstances and financial picture and provides a snapshot to the platform to ascertain if the client can progress. All platforms require differing KYC templates. The main ones are in the KYC section below, but it’s always a good idea to refer to the Term Sheet which will detail exact template required.
The KYC must be completed fully and accurately, with no room for errors. Time should be taken to complete the KYC to ensure it is presentable, accurate, comprehensive and error free, to save time for all concerned.
All KYC files should only include high resolution/HD images of photo’s, scans and documents. Printing must be done using a high-quality laser printer and should be in colour. Scans should be taken only by a desktop/peripheral scanner and the scanner setting should be a high DPI (Dots per Image) - at least 600DPI. The KYC should not be feint, blurry or have a tint and the file should overall have a very sharp focus and image quality.
Transaction codes on KYC’s should be a blank field, that is filled by the platform upon acceptance. Submitting KYC’s with transaction codes usually indicates that the case is “second hand” and has been shopped around the market. These will not be accepted.
Some programmes have their own KYC, but they are all fairly similar. Some should not be signed until later on in the process, and this is made clear for each programme.
Please follow the submission process in its entirety. We have created a “crib-sheet” KYC, and “proof of life” guide to assist with completion of documents. These resources can be found below.
Submitting files late on a Friday afternoon, runs the risk of documents being out-of-date by the time we have opportunity to process them on Monday. Documents should be no older than 48 hours when submitted to us, to give us time to package the case and submit to the intake officer.
File Genealogy & Submitting Files
Complete file genealogy is essential for each and every file submitted and should be sent alongside any new client KYC/file.
This ensures the correct parties in the transaction receive monies from the appropriate party, and this information is also essential for the trade desk to prepare contracts and have valuable conversations with clients.
For every file, a Genealogy Report must be completed, including the client-facing consultant, as well as all others receiving fees or payment from either the client or the platform. You can download a template Genealogy Report here. We may ask you for proof of your relationship with the client, such as an email trail to evidence that you are direct to the client and the Genealogy Report makes sense.
For parties being paid by the platform, in addition to the Genealogy Report, a fully completed Introducer Information Sheet (CIS) must be completed. Click here to complete the CIS and provide supporting documentation. Please note, it is not necessary to complete the CIS if you have already completed one for us before and have multiple client files submitted.
Where parties are paid by the client, we will require a copy of the fee agreement, signed by the client. This should be sent via email to info@thetradegroup.co.uk
Once you submit a file to us, we will undertake our initial Due Diligence and we reserve the right to independently contact the client to verify the information provided.
All files must be submitted on line using the links at the top and bottom of this page.
Private Placement Programmes (PPP’s)/Trade Programmes | What are they?
We are often contacted by project developers, investors, entrepreneurs and brokers who are looking to raise capital, or who are looking for investment opportunities that provide higher returns for themselves or their clients. This initial inquiry often leads to a discussion of private placement programs and trade platforms.
Are Private Placement Programs/Trade Platforms Real or a Scam?
The first question we are usually asked is: are private placement programs (also known as PPPs) and trade platforms real or are they a scam? In short, they are real, but not in the way they are often described. There are many myths about these programs that we will attempt to dispel.
Perhaps the most common misconception regarding private placement programs and trade platforms is that they are the exclusive domain of the ultra rich through secretive, invitation-only investments. Often, clients are told that they must pay large, upfront fees to gain access to these exclusive instruments. In addition, they are told they must submit POF (proof of funds), a CIS (client information summary) or KYC (know your client) package, along with their passport. Nothing could be further from the truth.
How Private Placement Programs / Trade Platforms Work
Many private placement programs and trade platforms are legitimate investment vehicles that are accessible to a wide variety of investors. An excellent white paper on private placement programs and trade platforms was written by MB Assets of Memphis, TN–a copy of which is available for download above. It should be noted that we have no relationship with MB Assets or its principals—their white paper is provided for educational purposes only and should not be construed as an endorsement of the firm.
Part of the confusion regarding private placement programs in particular is the term, “private placement”. Private placements are used by companies to raise capital from private investors often via a set of investment documents known as a Private Placement Memorandum (PPM).
Prime Bank Programs
More often than not, when people refer to PPPs they are referring to what are more properly known as Prime Bank Programs. Prime Bank Programs, also known as Prime Bank Investments, High Yield Investment Programs (HYIPs), Buy-Sell Programs or Roll Programs, are clearly and universally fraudulent. They purport to involve the purchase and sale of medium-term notes (MTNs), Standby Letters of Credit (SBLCs), Bank Guarantees (BGs), or some similar instrument.
As the name implies, it is usually alleged that only the largest top-50 prime banks in the world are involved in this program and participation is by invitation only. There is usually a great deal of secrecy involved and the minimum investment is typically in excess of $100 million or more. Interestingly enough, prime bank programs in the US often state that only overseas banks are involved while overseas programs often state that only US banks are involved.
They are most often described as “risk-free” investments where one prime bank issues discounted instruments to a purchaser at another prime bank who has committed to purchase the notes at an agreed-upon price. If this is simply a bank-to-bank transaction one might wonder where the scam comes in. Supposedly, the purchasing bank needs a large deposit from a new client to create the line of credit that will be used for the purchase. This deposit will be placed in a “blocked” account and held untouched by the bank until the transaction has been completed.
Prime bank programs have been universally condemned by the FBI, SEC and US Treasury Department as being fraudulent. In recent years, fraudsters have attempted to circumvent these governmental warnings with a clever ruse. They state that these agencies know that the programs are real, but that they are obligated to publicly deny their existence lest investors transfer large amounts of capital from deposit accounts into prime bank programs. Supposedly, this mass exodus of capital would cause the banking system to collapse, hence the official denials. This, of course, is complete nonsense.
Medium Term Notes (MTNs), Standby Letters of Credit (SBLCs) and Bank Guarantees (BGs)
Part of the reasons such frauds have been successful is that Medium Term Notes, Bank Guarantees and Standby Letters of Credit are real financial instruments. A Medium Term Note is the general name given to a debt instrument that matures in the medium term, typically 5-10 years. Bank Guarantees, as they are known outside of the US, or their US counterpart, Standby Letters of Credit, are most often used in international commerce where a seller might be unsure about a buyer’s ability to pay for goods once received. One way of overcoming this impasse is to utilize a bank guarantee or standby letter of credit.
A SBLC or BG is simply a promise to pay on the part of the bank involved in the transaction. Trading partners often have greater confidence in a transaction if the payment is backed by a commercial bank rather than a trading partner with whom they might be unfamiliar. Banks are not in the business of losing depositors’ money, so in order for them to issue a SBLC or BG in the first place, they would underwrite the SBLC/BG similar to an unsecured loan–meaning obtaining an SBLC/BG is a difficult endeavour to begin with.
Moreover, banks will often charge 1%-8% of the face value of the instrument, meaning a $100 million SBLC could cost the bank’s client as much as $8 million to obtain, and is usually only valid for a period of one year. Which, of course, begs the question: if the borrower has sufficient standing with the bank to be approved for an SBLC/BG and sufficient funds to cover the cost of issuing it, why are they contacting us? The answer is, if this were a legitimate transaction, they wouldn’t be.
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Cash Files (Individual & Corporate) KYC Template
Most cash files now require a video to be submitted along with the full file of the client visiting their bank’s website and logging in to their online banking. The should then navigate to the account which holds the funds they wish to trade and show the balance available. This can be done via most mobile devices and browsers using commonly available screen recording software.
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If there is only one introducer, the paymaster can pay the introducer directly.
If there is more than one introducer, a list of all parties and simple CIS for each is required and The Trade Group will pay all parties.
Fees are never disclosed until the client has an offer.
We will not engage until we have a full, accurate KYC for the client. Similarly, we will not liaise with clients until the file is formally accepted by the platform.
Once submitted, Introducers must not seek regular updates, and leave the platform to engage directly with the client. They must limit all involvement so as not to hinder the deal.
Check bank details and address are correct on KYC by conducting a web search to confirm.
Make sure the clients bank is a credible one and ideally “Top-50”. Location (of bank & branch) must not be in China, Hong Kong, or India unless client is interested in a progragrame specific to those countries.
Leave any transaction codes on the KYC blank. These will be filled in by the platform.
Ensure all documentation added to the KYC is of high quality and resolution and is readible when viewed, paying particular attention to the Proof of Life.