There are several types of
transaction which can be
undertaken on the BCMP CR System
– “issuance” and “cancellation”
of BCMP CRs, “endorsement by way
of transfer” of BCMP CRs,
“pledge” of BCMP CRs,
“endorsement by way of security”
of BCMP CRs, and “Release of Security” over
BCMP CRs.
Issuance is the action whereby a
BCMP CR is created, and can only
be undertaken by a BCMP CR Issuer.
Following issuance of a BCMP CR,
BCMP prints a BCMP CR “original” which it retains in its role as
Depository. BCMP CR Members are
able to print copies of BCMP CRs
to which they are entitled
access. BCMP provides a
certified copy of a BCMP CR to those entitled to receive it.
Cancellation is the action by
which the BCMP CR ceases to exist.
It can only be undertaken by the
Issuer of the BCMP CR that is
being cancelled. If an Issuer
wishes to cancel a BCMP CR relating only to some part of
the subject goods he must cancel
the existing BCMP CR and issue a
new BCMP CR in respect of that
portion which is to remain the
subject of a BCMP CR.
A BCMP CR can be transferred from
one member of the system to
another, by way of a “Transfer
Endorsement”. This is effected
by the transferor issuing an
instruction via the BCMP CR
System to BCMP who endorses
accordingly the relevant printed
BCMP CR that it is holding.
To best protect the interests of
lenders who wish to take
security over BCMP CRs, security
over a BCMP CR is created by way
of pledge and Security
Endorsement.
(a)
A pledge can be
created under three alternative
scenarios:
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An Originator or a
subsequent transferee
can issue an instruction
(a “Pledge
Notification”) to BCMP
to hold the BCMP CR as a
pledge for a named
Security Beneficiary; or
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A
prospective transferee
of the BCMP CR can issue
a ”Standing Pledge
Instruction (Existing
BCMP CR)” to BCMP to hold
the BCMP CR as a pledge
for a named Security
Beneficiary if and when
the BCMP CR is endorsed
by way of transfer to
that prospective
transferee
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Prior to goods being
delivered to an Issuer’s
warehouse, the
prospective Originator
can issue a “Standing
Pledge Instruction (Goods
in Transit)” instructing
that Issuer, upon
receipt of those goods,
to issue a “Pre-Pledged
BCMP CR” naming the
Security Beneficiary who
proposes to finance
those goods. |
(b)
When a pledge is
created under any of the
scenarios described in
(a) above BCMP as agent
for the Owner of the goods to be
pledged shall also endorse by
way of security the relevant
BCMP CR that it is holding, naming
the Security Beneficiary in
whose favour the security has
been created.
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A Security Beneficiary
may release security
over a BCMP CR by issuing,
via the BCMP CR System, a
Form of Security
Release. Release of
security over only part
of the goods which are
the subject of a BCMP CR
can also be effected by
the Security Beneficiary
who issues appropriate
instructions.
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Pledging of BCMP CR
| 1. |
Originator: Deposits
commodity with Issuer (Warehouse) |
| 2. |
Originator: Request
for BCMP CR to Issuer |
| 3. |
Issuer: issues BCMP
CR |
| 4. |
Originator:
Publishes BCMP CR to one
or more security
beneficiaries (banks and
financiers) |
| 5. |
Security beneficiary:
Accepts the request and
agrees to finance (subject
to its commercial
discretion) |
| 6. |
Originator: Pledge
notification in favour
of the security
beneficiary to BCMP |
| 7. |
Security beneficiary:
Provides finance |
Endorsement of BCMP CR
| 1. |
Originator: Deposits
commodity with Issuer (Warehouse) |
| 2. |
Originator: Request
for BCMP CR to Issuer |
| 3. |
Issuer: issues BCMP
CR |
| 4. |
Originator:
Publishes BCMP CR to one
or more potential buyers
(other members of BCMP
CR
system) |
| 5. |
Potential buyer:
expresses interest to
buy (subject to its
commercial discretion) |
| 6. |
Originator: Price
negotiation and
agreement on price |
| 7. |
Endorsement of BCMP
CR in favour of the
Buyer |
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