Answers to the Most Frequently Asked Questions...
What types of Proof of Funds accounts can be provided?
What is a Verification of Deposit (VOD)?
What types of SWIFT messages are available with our POF accounts?
What is the SWIFT messaging system?
What is a SWIFT MT799 confirmation?
What is a SWIFT MT760 confirmation?
What is the procedure for opening a Proof of Funds account?
What are the minimum and maximum amounts available?
How long can the account can be kept open for Proof of Funds uses?
What happens to the Underwriting Fee if the account is not opened?
How is the Arrangement Fee protected?
Can the Arrangement Fee be paid after the account has been opened?
What types of Proof of Funds accounts can be provided?
We can open a U.S. Money Market account, or open an account in a US bank's private
banking division. A standard Verification of Deposit (VOD) is available with all account
types, with SWIFT messaging available for off-shore bank accounts at additional cost.
We can also provide bank instruments in the form of Stand-by Letters of Credit and
Certificates of Deposit.
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What is a Verification of Deposit (VOD)?
It is a document signed by a company's or individual's financial institution that provides
verification of the balances in their financial accounts. A written Verification of Deposit
will adequately serve
the majority of Proof of Funds requirements. Other types of
confirmations done with bank-to-bank SWIFT messages are most commonly used for
verifications tied to transaction settlements or securities transfers, and have special
account set-up procedures that are available at additional cost.
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What types of SWIFT messages are available with our POF accounts?
SWIFT MT799 and MT760 message formats are available with the POF accounts we
arrange in non-U.S bank accounts. Additional costs apply dependent upon the message type.
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What is the SWIFT messaging system?
S.W.I.F.T. ("Society for Worldwide Inter-bank Financial Telecommunication") provides
mechanisms for electronic inter-bank messaging and funds transfer. SWIFT messages
are used legitimately to conduct business between transactional partners. The SWIFT
system was established in the early 1970's by a group of European banks who until that
time had been conducting business together via telex and courier.
SWIFT provides for a number of different message types and purposes. Each type
of SWIFT message is pre-defined and follows a specified format. All SWIFT messages
must adhere to these established forms or they will be rejected by the receiving bank.
There are nine (9) SWIFT message categories with multiple message types in each.
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What does the SWIFT MT799 option provide?
An account with the SWIFT MT799 capability allows bank-to-bank SWIFT electronic verification
for Proof of Funds in compliance with the SWIFT Category 7 "Treasury Markets & Syndication"
message types. Often there is a misconception that a particular circumstance requires a
SWIFT MT760 message, when in fact, the SWIFT MT799 format provides the required bank
confirmation for the application.
There is a $50 million minimum account size for a SWIFT MT799, and additional costs apply.
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What does the SWIFT MT760 option provide?
An account with the SWIFT MT760 capability allows bank-to-bank SWIFT electronic verification
of the account, and will include a blocked funds provision. There is no other bank guarantee
provision available in the SWIFT instructions. There is a $50 million minimum account size for this
SWIFT wire communication. Additional costs apply.
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What is the procedure for opening a Proof of Funds account?
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What are the minimum and maximum amounts available?
The minimum account size is $500,000 and the maximum account size is $2 billion. We can
syndicate larger accounts from our "investor pool" upon request.
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How long can the account can be kept open for Proof of Funds uses?
We have 30 and 60 day terms available, dependent on account type. The account can be
renewed for additional terms upon mutual agreement, typically at discounted rates. Certificates
of Deposit are for 0ne year and one day.
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What happens to the Underwriting Fee if the account is not opened?
If, in the unlikely event we fail to open the Proof of Funds account under the provisions of the
Term Sheet and the Principal Agreement, the Underwriting Fee is promptly refunded.
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How is the Arrangement Fee protected?
The Arrangement Fee is deposited in a Trust Account with a licensed third-party Escrow Agent
and the Fee is not released until it is confirmed that the account has been opened. In the unlikely
event the account is not opened, the Arrangement Fee is returned by the Escrow Agent.
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Can the Arrangement Fee be paid after the account has been opened?
No, the Arrangement Fee must be placed in the Escrow Trust Account before the Proof of
Funds account can be opened due to the significant costs incurred to open the account, and
to insure mutual protection for both parties.
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