Review before Execution.
A public overview of risk and compliance topics that may be relevant to a proposed trading relationship.
Considerations depend on the transaction.
The topics below are general categories, not a statement that a particular control, approval or legal conclusion applies in every case.
Credit risk
Credit review may vary by counterparty, transaction and available information.
- Counterparty identity and financial information
- Proposed exposure and payment terms
- Possible credit support, where appropriate
- Ongoing review when circumstances change
Market risk
Market-risk considerations depend on the product, location, timing and structure of a proposed transaction.
- Price and basis exposure
- Product, geographic and tenor considerations
- Potential stress scenarios
- Available risk-management instruments, where appropriate
Operational risk
Operational review may address how a transaction is recorded, confirmed, scheduled and settled.
- Trade and document accuracy
- Allocation of operational responsibilities
- Payment and settlement instructions
- Continuity arrangements where relevant
Trade compliance
Applicable legal and compliance questions depend on the parties, jurisdictions, cargo, vessel, banks and transaction structure.
- Counterparty and ownership information
- Applicable sanctions and trade restrictions
- Vessel and voyage information where relevant
- Anti-money-laundering considerations
- Anti-bribery and anti-corruption considerations
- Escalation for legal or specialist review where needed
Information may be requested before trading.
Prospective counterparties may be asked to provide documents relevant to identity, ownership, authority and credit review. The scope may change based on the proposed relationship and the information received.
Contact finance- Certificate of incorporation or formation
- Ownership information
- Financial information or a bank reference
- Trade references
- Authorized signatory information
- Completed counterparty questionnaire
Additional information may be requested. Receipt or review of documents does not state that a relationship or transaction has been approved. Legal questions should be addressed by qualified counsel.