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FINANCIAL MARKET COURSES

Open Account Trading

With the growth in both the volume and value of global trade, there has been a significant shift away from the use of traditional trade instruments such as letters of credit. The majority of international trade now takes place on open account terms, where an exporter ships goods to the importer without receiving cash or any other legally binding undertaking at or before the time of delivery.

 

This course looks at open account trading, how it works, the risks it poses for exporters, and how they might go about reducing their exposure to some of those risks. The course also describes the role of SWIFT’s Trade Services Utility (TSU) in open account trading.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Describe how trading on open account takes place terms

    Outline the role of SWIFT's Trade Services Utility (TSU) in open account trading

    Identify the risks of open account trading and how sellers can reduce their exposure to these risks

  • COURSE OUTLINE

    Topic 1: Overview of Open Account Trading

    Background

    What is Open Account Trading?

    Why use Open Account Terms?

    Stages of Open Account Trading

    Forms of Payment under Open Account Terms

    o Bank Transfers vis SWIFT

    o Collection Amounts

    o Check Payments

    Topic 2: SWIFT’s Trade Services Utility (TSU)

    What is the Purpose of SWIFTs TSU?

    How does the TSU Work?

    TSU Enhancements

    o Bank Payment Obligation (BPO)

    Topic 3: Risks of Open Account Trading

    Counterparty Credit Risk

    Payment Delays

    Fraud

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    50 Minutes

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