Market Maker

Market maker role

While the underlying legal structure for investing in trade finance assets can be structured-for-sale, however, the moot question still remains: ‘Can institutional investors actually sell-down the trade finance assets before its maturity in the secondary market? Who will be the buyers of these trade finance assets in the secondary market?’

This is conceptually very similar to the role ‘Market Makers’ play in debt capital market space for syndicated loans, US Treasuries, bonds, commercial paper and other similar debt instruments.

Pinnacle Trade Finance has relationships with several banks and MLAs/ DFIs, who are key players in the trade finance space and can help institutional investors in this space, in a limited manner, as follows:
1. Play a role of ‘introduction’ to potential secondary market buyers of trade finance assets
2. Once this ‘introduction’ is completed and pricing agreed, we can assist the operations team for the actually execution.

We will also create benchmark pricing for month-end and quarter-end for mark-to-market evaluations (like there exists for commercial paper, syndicated loans, bonds, CDS, etc.).

We believe that it is a positive step forward and sets the initial stage of creating a secondary market for trade finance assets for institutional investors. Over a period of time, there will be actual ‘Market-Makers’, who will start undertaking this business requirement on an on-going basis.