4.27 Processing Silent Participation

There are two possible ways in which a trade deal can be carried out. Assignment deals where bank is directly involved in the trade and silent participation deals where bank is not directly involved in a trade deal. In participation deals, bank silently participates in the trade deal.

Participations can belong to either of the following two types:

• Sell participation where bank sells the participation to a counterparty. In this case, bank represents the counterparty in the agency and all the activities for the counterparty flows through bank.
• Buy participation where bank buys the participation from a counterparty. Here the counterparty represents bank in the agency and carries out all the activities on behalf of bank.

Deals involving a silent participant also flow in from SLT like other normal buy/sell deals with the only difference being in the deal type, which changes to Participation. In the LB module, the detail of each silent participant is captured and a corresponding participant contract is created.

This topic contains following sub-topics:

• Processing Sell Participation
  
• Processing Buy Participation