Purpose of a Transactional Account:
A SPV, depending on its activity profile, may need a bank account.
- If the SPV is used as part of a fund and trust structure, payment for the underlying assets may come from the General Partner (on behalf of the Fund) or the Trustee (on behalf of the Trust). Therefore, in this case, a bank account for the SPV may not be necessary.
- Whereas, if the SPV is a standalone structure and used in a deal-by-deal investment model, it will need a bank account to send the relevant monies due for the investment.
SPVs & Banking:
There are generally two banking models for SPVs:
- One-time Banking: The maintenance of a bank account may require the payment of (ongoing) fees. Therefore, in the case of an one-off transaction (such as an equity investment in a startup), the bank account may be shortly closed afterwards, as the entity will be dormant (for a period of time until exit).
- Ongoing Banking: A SPV that is more active (such as a securitisation vehicle) will however, maintain its bank account.
In the present times, the global KYC, AML & CTF standards are relatively stringent. Therefore, the account establishing process at a corporate bank (for a transactional bank account) has become more complex and time-consuming.
Whilst Fund Managers and Sponsors are free to handle the entire process on their own (or tap into their existing banking relationships), 𝐕𝐀𝐔𝐁𝐀𝐍's Operations function is able to facilitate the entire process (having handled this process for many clients in the past).