The Waiting Game: A Realist’s Guide to Delays in Private Placement Program Trades

By Taimour Zaman, Founder, AltFunds Global

In the high-stakes realm of Private Placement Programs (PPPs), time is the ultimate validator. A common refrain I hear from newcomers is, “The platform said it would take two weeks, but it’s been months. What’s happening?”

Having navigated this complex landscape for over a decade, I can state a fundamental truth: A legitimate PPP trade is a marathon of meticulous checks, not a sprint. Delays are not just common; they are an inherent, even reassuring, part of the process. Conversely, a process that moves too quickly is often the hallmark of fraud.

This is a breakdown of the legitimate causes for delay and the strategic patience they require.

The Nature of the Beast: Why Delays are Inevitable

A PPP is not a public stock trade. It is a private, bilateral transaction involving vast sums, governed by strict regulations, and conducted between sophisticated institutions. The sheer number of moving parts and the imperative of compliance make a swift process virtually impossible.

The Five Pillars of Delay: A Structural Analysis

1. The Onboarding Gauntlet: Know Your Customer (KYC) & Anti-Money Laundering (AML)

   This is the first and most significant hurdle. The arranging bank’s compliance department has one paramount goal: to protect the bank’s license. This means conducting forensic-level due diligence on every party involved.

   • The Process: Scrutinizing the source of wealth, source of funds, corporate ownership structures, and political exposures of all principals and investors.
   • The Delay: This can take anywhere from weeks to months. Requests for further documentation are the norm, not the exception. A clean, verifiable background is crucial for navigating this phase. Any ambiguity will halt progress immediately.
2. The Legal Labyrinth: Drafting the Private Placement Memorandum (PPM)

   The PPM is the operational and legal bible of the transaction. It is not a template document.

   • The Process: Teams of lawyers must draft, review, and negotiate the terms, ensuring every risk is disclosed, every right is protected, and the structure complies with the relevant jurisdictional laws (e.g., SEC Regulation D, FINMA guidelines).
   • The Delay: This is a painstaking, iterative process. Each clause is debated. Any change requested by one party must be reviewed and accepted by all others. This back-and-forth is a primary time consumer.
3. The Collateral Verification & “Blocking” Process

   The investor’s assets must be verified and “blocked” in their own account. This is a critical step that is often misunderstood.

   • The Process: The bank must receive a formal SWIFT MT760 message (or equivalent) to confirm the assets are present, free and clear, and legally restricted from being traded or withdrawn for the duration of the program.
   • The Delay: This requires coordination between the investor’s bank, the investor, and the arranging bank. Any discrepancy in the documentation or the blocking instructions can cause significant setbacks. This is not an instant electronic transfer; it is a formal banking procedure.
4. The Internal Banking Committees & Sign-Offs

   A single individual cannot approve a transaction of this magnitude. It must pass through multiple internal committees.

   • The Process: Credit committees, risk committees, and legal committees must all provide their sign-off. Each committee will have questions and require satisfactory answers before proceeding.
   • The Delay: Scheduling these committees can take weeks alone. Each layer of approval is a potential bottleneck, deliberately designed to prevent reckless decision-making.
5. The Market & Instrument Sourcing

   The bank must source or create the specific financial instruments (e.g., Medium-Term Notes) and find a counterparty for the trade.

   • The Process: This is not a public market with constant liquidity. The bank must find the right instrument at the right price from a credible issuer and a willing buyer.
   • The Delay: This is a negotiation. It depends entirely on market conditions and the availability of suitable instruments. There is no guaranteed timeline.

A Comparative View: Legitimate Delays vs. Scam Tactics

It is crucial to distinguish between a legitimate, transparent delay and a stalling tactic used by fraudsters.

Legitimate Delay (The Real Process) vs. Fraudulent Stall (The Scam)

• The delay is for a specific, verifiable reason (e.g., “awaiting KYC doc X”).
• The delay is vague and perpetual (“waiting for bank comfort”).
• Communication is professional and consistent, though not necessarily frequent.
• Communication becomes sporadic, evasive, or aggressive.
• No additional upfront fees are requested to “expedite” the process.
• A new “unexpected fee” is required to “unblock” the transaction.
• The parties (bank, lawyers) are verifiable entities.
• The entities involved are opaque or unverifiable.

The Final Analysis: Patience as a Due Diligence Tool

In the world of PPPs, an investor’s ability to endure a slow, methodical process is itself a test of credibility. The fraudster’s model cannot survive long delays; their entire scheme relies on collecting upfront fees and moving on before the victim realizes the truth.

Therefore, a lengthy timeline should be viewed not with frustration, but with a measure of confidence. It indicates that the rigorous machinery of institutional finance is at work.

If you are engaging in this arena, your strategy must include a significant allocation of time—often 6 to 18 months. The greatest risk is not the delay itself, but the temptation to abandon a legitimate, slow-moving process in favor of a “faster” alternative that leads only to loss.

In this unique corner of finance, the slow path is almost always the only real path.

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Disclaimer

The information provided in this article is for general informational and educational purposes only. It does not constitute financial, legal, or investment advice, nor does it represent a solicitation, offer, or recommendation to buy or sell any financial instruments.

AltFunds Global AFG AG (“AFG”) is not a bank, broker-dealer, or asset manager. All services are provided on a consulting and educational basis only. Any references to investment strategies, structured finance, or alternative capital programs are provided for illustrative purposes and may not be suitable for all readers.

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