SBLC

A standby letter of credit (SBLC) is a bank's guarantee to pay a beneficiary a specific amount if the client fails to fulfill a contractual obligation. It functions as a form of insurance or backup, ensuring payment or performance when the primary party defaults. Unlike a commercial letter of credit, an SBLC is not the primary payment method, but is instead drawn upon only when the other party fails to meet their obligations. 

UK GILTS

UK gilts are government bonds issued by the UK government, which function as a way for the government to borrow money. The term "gilt" originates from the gilded-edged certificates historically used for these securities. Gilts are considered low-risk investments, as they are backed by the government and promise to pay the investor a fixed interest rate (coupon) and return the principal amount on a specific maturity date. 

MTN

Medium-Term Note (MTN)

• Definition: An MTN is a debt security that bridges the gap between short-term commercial paper and long-term debt, often used by companies to raise capital.

• Maturity: The term is typically between two and five years, but can be shorter or longer depending on the issuance.

• Issuance: MTNs are often issued under a pre-established MTN program, which allows an issuer to offer notes more flexibly and quickly over time without creating new legal documents for each issuance.

• Purpose: Companies use these programs to efficiently and periodically raise funds for their medium-term financial needs.

• Features: They can be issued in various currencies and have fixed or floating interest rates. 

FINANCIAL INSTRUMENTS PURCHASE PROCESS

IF AN ISIN IS AVAILABLE, IT WILL BE PROVIDED TO THE BUYER FOR REVIEW AND VERIFICATION. A BUYER  SHOULD SUBMIT A COMPLETE KYC ALONG WITH PROOF OF CAPACITY TO PURCHASE.  IF AN LEI IS AVAILABLE, PLEASE SUBMIT THAT AS WELL. A DUE DILIGENCE PROCESS WILL OCCUR. ONCE COMPLETED SUCCESSFULLY, A PURCHASE CONTRACT WILL BE ISSUED TO THE BUYER FROM THE SELLER AND BASED ON THE PURCHASE PROTOCOL AGREED UPON BY BOTH PARTIES, THE TRANSACTION WILL COMMENCE. 

US TREASURIES

U.S. Treasury securities, which are debt obligations issued by the department. The Department of the Treasury handles taxes, government payments, and manages the national debt, while Treasury securities are a form of government-issued debt considered among the safest investments due to their low risk. 

General Regulatory and Operational Protocols

Regardless of the instrument, several regulatory and operational protocols apply:

• Identity Verification (KYC): Financial institutions must verify the customer's identity using methods like government-issued IDs, business licenses, or third-party databases, as part of Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) compliance.

• Investment Policy Adherence: Institutional investors must adhere to a predefined investment policy that outlines position limits, authorized instrument types, and risk tolerances.

• Settlement Procedures: After a trade is executed, it must be settled. This involves the transfer of the financial instrument to the buyer and funds to the seller, a process that has specific deadlines (e.g., T+2 or T+3) and "buy-in" procedures for failure to deliver.

• Accounting Standards: The purchased instrument's classification (e.g., Held-to-Maturity, Available-for-Sale, Fair Value through Profit or Loss) determines its subsequent accounting treatment and measurement on financial statements