FINANCIAL GLOSSARY

  • ATV – Authority to Verify

  • BF – Blocked Funds – Blocked Funds. Money generated by a company’s foreign operations that cannot be moved from one country to another because of one or more regulations in the country in which the money was generated.

  • BG – Bank Guarantee – A Bank Guarantee is where one Bank (the Issuing Bank) issues an indemnity to another Bank (the Beneficiary Bank) or directly to a Beneficiary, on behalf of its account holder. The Issuing Bank will expect its account holder to pledge ‘assets’ to the bank for its issue.

  • CD – Certificate of Deposit – A certificate of deposit is a time deposit, a financial product commonly sold by banks, thrift institutions, and credit unions. CDs are similar to savings accounts in that they are insured “money in the bank” and thus virtually risk free

  • CMO – Commercial Mortgage Obligation – A collateralized mortgage obligation (CMO) refers to a type of mortgage-backed security that contains a pool of mortgages bundled together and sold as an investment. Organized by maturity and level of risk, CMOs receive cash flows as borrowers repay the mortgages that act as collateral on these securities

  • CUSIP – Committee on Uniform Securities Identification Procedures – CUSIP stands for the Committee on Uniform Securities Identification Procedures. Formed in 1962, this committee developed a system which it implemented in 1967 to identify securities—specifically U.S. and Canadian registered stocks, U.S. government and municipal bonds, exchange-traded funds, and mutual funds

  • DLC – Documentary Letter of Credit – Documentary Letter of Credit (L/C, DLC) Letter of credit (Documentary Letter Of Credit (L/C, DLC) is the bank’s obligation to pay the seller of goods or services a certain amount of money in the timely submission of documents confirming shipment of goods or performance of contractual services

  • DTC – Depository Transfer Check – A depository transfer check (DTC) is used by a designated collection bank to deposit the daily receipts of a corporation from multiple locations. Depository transfer checks are a way to ensure better cash management for companies, which collect cash at multiple locations. (Investopedia, 2019)

  • DVP – Delivery Versus Payment – Delivery versus payment or DvP is a common form of settlement for securities. The process involves the simultaneous delivery of all documents necessary to give effect to a transfer of securities in exchange for the receipt of the stipulated payment amount. (Wikipedia Contributors, 2019)

  • IBOE – International Bills of Exchange – A bill of exchange is a written order once used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date. (Investopedia, 2019)

  • ICBPO – Irrevovable Conditional Bank Pay Orders – ICBPO means (Irrevovable Conditional Bank Pay Orders). ICBPO has been banned and have been made illegal by most governments. BG and SBLC Issuers that continue to ask for ICBPOs as payment are completely out of touch by seeking a form of financial payment that has been made illegal in most countries

  • ISIN – International Securities Identification Number – An International Securities Identification Number (ISIN) is a code that uniquely identifies a specific securities issue. The organization that allocates ISINs in any particular country is the country’s respective National Numbering Agency (NNA). (Investopedia, 2019)

  • KTT – Key Tested Telex – KTT (Key tested telex) is what banks used to use to transfer and receive funds before the SWIFT system. It is an older form of wire transfer of funds which used a telex machine (instead of the modern digital data transfer) messages authenticated by the use of code (key) numbers.

  • LC – Letter of Credit – A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. (Wikipedia Contributors, 2019)

  • LOI – Letter of Intent – A letter of intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. The letter outlines the chief terms of a prospective deal. (Investopedia, 2019)

  • LTN – Long Term Note

  • LTV – Loan to Value Ratio – The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage line as a percentage of the total appraised value of real property. (Wikipedia Contributors, 2019)

  • MOU – Memorandum of Understanding – A memorandum of understanding (MOU or MoU) is a formal agreement between two or more parties. Companies and organizations can use MOUs to establish official partnerships. MOUs are not legally binding but they carry a degree of seriousness and mutual respect, stronger than a gentlemen’s agreement. (What is memorandum of understanding (MOU or MoU)? – Definition from WhatIs.com, 2011)

  • MTN – Mid Term Note – A medium-term note (MTN) is a note that usually matures in five to 10 years. A corporate MTN can be continuously offered by a company to investors through a dealer with investors being able to choose from differing maturities, ranging from nine months to 30 years, though most MTNs range in maturity from one to 10 years. (Investopedia, 2019)

  • NDA – Non Disclosure Agreement – A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA) or secrecy agreement (SA), is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties. (Wikipedia Contributors, 2019)

  • NCNDA – Non Circumvention Non Disclosure Agreement– Also known as a non–disclosure agreement, a non–circumvention agreement is a legally-binding agreement that is established to prevent a business from being bypassed or circumvented by other parties involved in a business deal. (UpCounsel, 2019)

  • POF – Proof of Funds – A proof of funds (POF) is a document or bank statement proving that a person has the financial ability to perform a transaction. (Wikipedia Contributors, 2019)

  • PPP – Private Placement Program – Private Placement Programs (PPPs)are legitimate investment vehicles that are accessible to a wide variety of investors. Part of the confusion regarding trade programs is the dual use of the acronym “PPP”. The acronym is also used to mean “Private Placement Partnerships”. (Private placement Programs, 2019)

  • ROI – Return on Investment – ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money invested. ROI is usually expressed as a percentage and is typically used for personal financial decisions, to compare a company’s profitability or to compare the efficiency of different investments. (Investopedia, 2019)

  • SBLC – Standby Letter of Credit – A Standby Letter of Credit (SBLC / SLOC) is a guarantee that is made by a bank on behalf of a client, which ensures payment will be made even if their client cannot fulfill the payment. It is a payment of last resort from the bank, and ideally, is never meant to be used.

  • SKR – Safe Keeping Receipt – Safe Keeping Receipt or SKR, or Safekeeping, is where an asset owner elects to place that asset in the care of an Agent, usually a Bank or a Financial Institution and receives an acknowledgement from the Bank as to their “Safekeeping” of that asset.

  • SPV – Special Purpose Vehicle – Special purpose vehicle (SPV), also known as special purpose entity (SPE), refers to a legal entity that is created to isolate a parent company from financial risk, including bankruptcy. (Investopedia, 2019)

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