Forfaiting Glossary

Glossary Items beginning with : S

Satisfactory Documents

Under the URF the required documents that are satisfactory in accordance with the forfaiting agreement or forfaiting confirmation.

SCF

Structured Commodity Finance are financing transactions whereby an inventory and/or flow of commodities can be isolated from its owner and used as collateral for security and repayment.

Secondary Market

Under the URF the market where the payment claim is purchased by the Buyer from the Primary Forfaiter or another seller.

Securitization

The process whereby a portfolio of receivables is transformed into a tradable security.

Security

A mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

Seller

Under the URF the party selling the payment claim.

Settlement Date

The date on which the parties agree to pay for a transaction, also known as value date.

Settlement Risk

The risk that one party will not deliver on the terms of an agreement on the actual value date. Such risk becomes important when settling a transaction and even more important when transactions are closed on terms such as a Risk Participation basis.

Sharia

Prohibits the acceptance of specific interest or fees under the principle of Islamic Banking. Forfaiting and trade finance have expanded to include receivables that follow Sharia principles under agreements such as the Murabaha Facility Agreement.

Shipment Date

The loading date on a vessel, airplane or truck. It is usually the date that triggers the setting of the period from the issue date to the maturity date of the receivable.