What procedures? A load of rubbish!
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Proper physical traders never talk about procedures.
It is a well-known fact that upon closure of a deal, an email exchange constituting the terms of the trade follows, or what is otherwise known as a ‘deal recap’ or ‘trade recap’.
Thereafter, depending on the terms of the deal, multiple departments (for example chartering, operations, contracts, credit) start to get to work concurrently – it could be finding a vessel, clearing a vessel, negotiating the sales contract and L/C, registering the counterparty, appointing the surveyor etc.
In the wannabe world of trading, a step by step ‘transaction procedure’ is established by the fraudsters which is quite imaginative to be honest. It will usually look something like this:
- Exchanging something called a LOI/SCO/FCO/ICPO
- Signing of CI/SPA (Sales & Purchase Agreement as what they call it and it usually goes for 12 months)
- Signing of NCNDA (Non-Circumvention Non-Disclosure Agreement as what they call it)
- Exchanging some POP (Proof of Product as what they call it) like TSR (Tank Storage Receipt), DTA (Dip Test Authorisation) or SGS Report (seems like they only know of SGS)
- Sending of Swifts MT103/799/705 between banks
- Lift as per ‘schedule’ of the SPA
The slightly smarter brokers have tried to eliminate the first step to make themselves look ‘professional’. Little do they realise that no such jargon is used in an actual physical deal.
