Magister Operis · Financial Knowledgebase
Bank Compliance
Pre-compliance items in generic format: what each category is, the documents that satisfy it, and the conditions that make those documents credible.
A funding institution forms its view of a counterparty from the documents before it forms one from the transaction. Packages are read first by compliance professionals whose work is to find what is absent, and documentation that does not survive that reading never reaches a funding decision. At this level, most of it does not.
Requirements below are generic. Sufficiency in any transaction is determined by the receiving institution’s compliance function against the applicable asset class, jurisdiction and ownership structure.
How transactions at this level are conducted
These transactions are conducted the way the corporate office of Coca-Cola does business with the corporate office of McDonald’s — not the way the cooks and cashiers in the restaurant imagine such deals are closed.
Every party at that table — principals, counsel, accountants, advisors — holds an address on a domain they own, a professional web presence and a verifiable profile. The accounting and law firms carry errors and omissions and professional liability cover that the transaction directly exposes, and a firm with its own insurance at risk does not correspond from a free account or accept documents from parties that do.
Applies to every category — accountability of parties
An email address is the first document in the file. A free account is not a bankable document.
- Every party corresponds from an address on a domain that party owns — principals, counsel, accountants, intermediaries, contractors, operators.
- Excluded: Gmail, Outlook, Hotmail, Yahoo, AOL; addresses issued by an internet service provider; free privacy-branded services such as Proton or Hushmail.
- A paid account on any provider using your own domain satisfies the requirement. The domain carries the record, not the provider.
- Keep your existing personal accounts. What is required is an additional address on your business domain, used for the transaction and its documents.
- A website is not required. One on the same domain strengthens a project funding file.
- The reaction is immediate, and it is a base rate rather than a judgment. A party who has not spent a quarter of an hour and a few dollars on a domain has, historically, correlated with a party unable to produce the rest of the file. Exceptions exist. The pattern governs the first reading, and the first reading is the one that decides whether there is a second.
- Cost to correct: one afternoon and a few dollars a year.
- Withholding contact details protects nothing. Screening, sanctions and adverse-media databases already hold more than the party is deciding to disclose. Circumvention is addressed by agreement, not by omission.
1–6 · COMMON TO ALL TRANSACTION TYPES
01Corporate Profile
Isproof the contracting entity legally exists and may contract.
DocumentsClient information sheetExecutive summary or letter of intentCorporate backgroundIncorporation certificateProfessional, corporate and tax licencesCorporate resolution authorising the transaction
Credible whenRegistration verifiable at the issuing registryEntity name identical across all documentsSignatory authority evidenced by resolutionCorrespondence from a domain owned by the entity
Not credible whenletterhead substituted for registration; resolution referenced but absent; free-provider email; entity name varies between documents.
02Background of Principals
Isidentification of the natural persons who own and control the entity.
DocumentsBios, CVsPassport or national IDProof of addressUBO declaration showing ownership percentages to natural persons
Credible whenStated history verifiable at the named institutionsOwnership resolves to named individuals, not to another opaque entityPrincipals reachable directly
Not credible whenroles unverifiable; ownership terminates at a nominee or trust with no beneficiaries named; principal unavailable to speak.
03Competent Legal Representation
Isidentified counsel accountable for the transaction.
DocumentsFirm name, jurisdiction, registration or bar numberEngagement letter naming the clientEvidence of professional indemnity coverFor funds transfers, attestation as to source and ownership
Credible whenFirm verifiable at its regulatorEngagement letter dated and currentCounsel experienced in international financeFirm-domain email
Not credible when"my attorney is handling it" without a firm named; no engagement letter; general practice presented as finance practice; free-provider email.
04Banking Relationships
Isthe identified institution that will receive or transmit.
DocumentsBank name, branch, jurisdictionOfficer name and direct contactAccount existence confirmation or reference letter
Credible whenRelationship exists nowBanker contactable and aware of the transactionJurisdiction acceptable to the receiving institution
Not credible whenaccount "will be opened on confirmation of funding"; no reachable officer; jurisdiction on an enhanced-diligence list without explanation.
05Background of Intermediaries
Isthe complete list of parties expecting compensation.
DocumentsEach intermediary namedRoleBackgroundFee expectationWritten authority from the principal each representsExecuted fee agreement or IMFPA
Credible whenChain disclosed in full before terms are agreedEach party traceable to a reachable principalTotal compensation stated as a figure or percentage in writing
Not credible whenparty will not disclose whom they represent; chain longer than the number of parties who have met the principal; compensation deferred to closing.
06Attitude
Isdemonstrated responsiveness and willingness to correct.
Evidenced byReply timesDefects corrected on first requestDirect principal availabilityAbsence of manufactured deadlines
Credible whenCorrections made rather than arguedRequests answered within stated timeframes
Not credible whenthe same defect returns twice; documentation requests are treated as offence; a seventy-two-hour close is asserted.
7–11 · ASSET MONETIZATION AND FUNDS SETTLEMENT
07Proof of Ownership
Isconfirmation from the party holding the asset that the applicant owns it.
DocumentsBank or custodial statementEuroclear or depository screenSafe keeping receiptDeposit and payment receiptsWarranty deed for real propertyBank or law-firm attestation
Credible whenIssued by the holding institution, not the ownerDated within the institution's stated currency periodVerifiable at source without the owner's participationApplicant is the ultimate beneficial owner of the account, not a signatory or cardholder
Not credible whenscreenshot or photograph of a screen; letter written by the owner about the owner; holding institution "does not issue those"; verification only through an intermediary.
08Valuation and Appraisals
Isa value attributed by a party independent of the transaction.
DocumentsValuation or appraisal reportAppraiser credentials and registrationMunicipal tax valuation for real propertyCurrent insurance binder
Credible whenAppraiser independent of buyer, seller and intermediariesAppraiser identifiable and contactableMethodology statedReport current
Reference testthe advance rate the holding institution will lend against the asset is the operative value.
Not credible whenround figure with no supporting instrument; appraiser unidentifiable; valuation commissioned by a party holding an interest in the figure; insurance "pending".
09History of Assets
Isthe documented route by which the asset reached its present holder.
DocumentsOrigin documentationSuccessive ownership recordsStorage and custody recordsPurchase contractTaxes paid on acquisitionAssay, refinery or modification recordsTransport and customs documents at origin and destination
Credible whenChain unbroken from originEach transfer supported by a contemporaneous documentCross-border movements matched by customs entries at both ends
Not credible whenprovenance begins at the current holder; custody gaps unexplained; account varies between tellings.
10History of Funds
TerminologyFunds and assets are distinct and are not interchangeable in a legal document. Funds are money. An asset is property — bullion, a bank instrument, a security, real property. A party holding an asset does not hold funds, and a document asserting proof of funds where an asset is held, or describing the origin of funds where the origin of an asset is meant, has used the wrong term. Item 9 governs the asset. This item governs the money.
Isthe origin of the money, stated as the commercial event that produced it — a business sold, a contract performed, property disposed of, a dividend, a distribution, an inheritance — not an assurance about its character. Where the asset was purchased: the history of the funds used to purchase it. Where the asset is cash: the history of how those funds were generated. In both cases, the legal contracts involved.
DocumentsSource-of-funds and source-of-wealth statementUnderlying contractsSale agreementsAudited accountsTax filingsBank statements covering the generating period
Credible whenFunds trace to identified commercial transactions rather than to a person or a placeThe contracts underlying each are producedThe period covered is continuous with no unexplained gapPurchase-money history is evidenced independently of the asset documentation
Not credible whena declaration that the funds are “clean, clear and of non-criminal origin” is offered in place of the origin itself; source stated as “private investors” with no names; the trail stops at a jurisdiction, an institution or a person rather than at a transaction; any element rests on the applicant’s word.
Terminology — worked
A party holds stones appraised at USD 2 billion.
- It does not hold USD 2 billion in funds. It holds no money.
- It does not hold USD 2 billion in assets. It holds stones.
- It holds stones carrying an appraisal of USD 2 billion. The appraisal is an opinion. The operative value is what an institution will lend against them.
“Clean, clear and of non-criminal origin” is a characterisation, not an origin. What a reviewer asks instead:
- Which hole in the ground did they come out of?
- How did they travel from that hole to being held under a Safe Keeping Receipt?
- Where are the customs receipts for every border crossed?
- What taxes and duties were paid, and where are the filings?
- What is the history of the funds used to purchase them?
- Or, where the mine is owned by the party — where is the mining licence?
Every one is answered by a document issued by somebody other than the owner. None is answered by an attestation of good character.
The document follows the asset class: cash → a funds document; securities → a securities document; hard assets → an assets document. A history-of-funds form completed by a party holding bullion is not a defective answer — it is the wrong document.
11Use of Funds
Isthe stated destination of the capital.
DocumentsExecutive summaryBusiness plan with use-of-funds scheduleDrawdown scheduleAccounting and legal firms engaged for the deployment
Credible whenAllocation itemised by amount and purposeFigures reconcile across all documentsNamed professional firms attached
Not credible whenpurpose stated as a sector; figures disagree between documents; a transfer described as project funding with no project identified.
12–17 · PROJECT FUNDING
12Credible Business Plan
Isthe commercial case, in figures.
DocumentsExecutive summaryPrincipal detailsFinancial model with pro forma P&L, balance sheet and cash flowStated assumptionsSensitivity analysis
Credible whenAssumptions stated and sourcedModel rebuildable by a third partyRevenue follows asset completionTotals reconcile to the funding request
Not credible whenprojections without stated assumptions; revenue preceding the producing asset; evidence of reuse from another project.
13Credible Feasibility
Isindependent confirmation that demand and returns exist.
DocumentsFeasibility studyMarket studyCertification by an international bank, accounting firm or law firmNamed purchasers and their capacity to pay
Credible whenCertified by a firm of standing carrying professional liabilityDemand evidenced by named buyers rather than market sizeTechnical feasibility addressed separately from commercial
Not credible whenuncertified; demand evidenced by an industry statistic; no purchaser has committed.
14Collateral
Isthe security supporting the facility.
DocumentsInstrument or asset documentationConfirmation from the holding institutionOwnership evidence per item 7Encumbrance searchCollateral provider's KYC package
Credible whenConfirmed by the holding institutionUnencumbered and not pledged elsewhereA security interest can be perfected in the relevant jurisdictionProvider identified and screened
Not credible when"available upon LOI"; provider will not be identified; same collateral known to support other transactions.
Notewhere the project owner is not the collateral owner, the collateral provider is the counterparty to the funding decision.
15Credible EPC Contractor
Isthe firm accountable for delivering the built asset.
DocumentsCompany profile and registrationCompleted projects at comparable scale with referencesFinancial statementsBonding and insurance capacityExecuted or draft EPC contract
Credible whenComparable completions verifiable with named clientsBonding capacity matches contract valueContract executed or at final draft
Not credible whennamed without engagement; portfolio unverifiable; largest completed project materially smaller than the one proposed.
16Credible Operator
Isthe party running the asset after completion.
DocumentsOperator profile and registrationOperating history in the same sectorDraft or executed operations and maintenance agreementOperating budget
Credible whenOperating history verifiableAgreement term matches the repayment periodOperating costs in the financial model match the agreement
Not credible when"to be determined post-construction"; no agreement; operating cost line with no operator behind it.
17Off-Take Agreements
Isthe contracted source of repayment.
DocumentsOff-take agreements, or power purchase agreements where energy is involvedPurchaser financial standingPricing and volume termsTerm matched to the facility
Credible whenExecuted and bindingPurchaser creditworthy and evidencedVolumes and pricing reconcile to the financial modelTerm equals or exceeds the repayment period
Not credible when"under negotiation" without a date; purchaser capacity to pay undocumented; a memorandum of understanding presented as a contract.
Submission Format
- One indexed PDF. Every document bookmarked.
- Opens to a cover letter on letterhead stating the transaction, parties, collateral and request.
- One date format throughout. Entity names identical across every document.
- Owned-domain addresses for every party.
- No instructions, guidance notes, template text, placeholders or editing marks. A funding institution does not need to be told how to complete a document.
- Fields that do not apply are removed — not left blank, not marked “N/A”. A document carrying either reads as a template someone filled in rather than a document someone prepared.
Standing
Government or municipal authoritymandate and contracting authority over the site, stream or concession. No financial disclosure requested.
Utility or industrial operatorcorporate standing, site or offtake, authority to contract.
Investor, fund or collateral provideraudited proof of funds via a licensed external auditor, documented ultimate beneficial ownership, complete KYC/AML package.
Intermediarywritten authority from a reachable principal.
Engagement
- A funding institution does not review a transaction until its documentation meets this standard. Until then the file is not being considered, declined or queued — it is not in front of anyone.
- Three routes are equivalent: correct it internally, engage another professional, or retain Magister Operis. Which is taken is immaterial.
- Every day it remains outstanding is a day added to the close, and it is the one interval wholly within the party’s control.
- Compensation on a transaction is a success fee, agreed in advance. Assembly of documentation is a separate engagement at published hourly rates — not carried against the success fee, and priced as the same work a competent law firm bills at its own rates.