Important Survey on Dodd-Frank Title VII

Paul Coles, Director, Global Trade Risk Distribution. Global Treasury Services, EMEA, Bank of America Merrill Lynch

Whilst the market still appears to be generally awash with appetite for trade assets (and a relative shortage of suitable assets for sale to meet the demand), there are always some challenges brewing that can affect our industry.

One such matter is the confusion in past months around Dodd-Frank Title VII. This is highlighted by the fact that a number of players in the trade finance risk participation market are still trying to reach a definitive conclusion as to what the impact might be, whilst an even larger number are seemingly unaware of the issue at all. This isn’t too surprising, as it is buried in legislation that is not actually aimed at the world of trade finance and therefore wouldn’t naturally appear on the radar.

We will very shortly be posting a more detailed explanation on the website of what it’s all about and what steps are being taken, however in the meantime we would like to remind you that ITFA is conducting an important survey in order to help resolve this issue. The data will then be aggregated and will be passed to BAFT only, to assist in lobbying the US authorities.

Banks who have not yet responded to the survey are strongly encouraged to do so in the interest of the industry as a whole.

Please take a few moments to collect the following data and feed it back directly to ITFA via the following email address: info@itfa.org

* How many sub-participation agreements does your institution have in place by number?

* What approximately is the value of the transactions completed by your organisation during the last financial year under such agreements?

* What proportion of these transactions were unfunded?

* What proportion were unfunded participations in underlying funded assets?

The information provided to ITFA for this survey will be treated as confidential. ITFA will collect the information and combine it with existing data which will be passed to BAFT only, to assist in lobbying the US authorities. No identifiable information for any organisation will be shared with any other party.

We hope that some positive progress will have been made by the time our next newsletter comes out!