"Confirmation of preadvice" in investment transactions in the Ledger to Ledger procedure is a part of the process where the investment recipient notifies the bank of the upcoming funds before the actual funds are credited to their account.
Let's break down this process step by step:
- Preadvice: This is the initial stage where the investor (in this case, you) informs the bank about the intention to make an investment or transfer funds to the recipient's account. This notification usually contains information about the amount, timing, and other transaction details.
- Confirmation of Preadvice: This stage involves the bank, to which the funds are to be transferred (the recipient), confirming the receipt of the preadvice. It's a kind of acknowledgment that the bank has received information about the upcoming transfer and is ready to accept the funds when they arrive.
- Investment/Transfer of Funds: After the recipient has confirmed the preadvice, the investor can proceed with the investment or transfer of funds to the recipient's account. This is the actual movement of funds.
- Confirmation of Receipt of Funds: Once the funds are credited to the recipient's account, the recipient's bank must confirm the receipt of funds. This provides the investor with confidence that their funds have indeed been delivered and credited to the recipient's account.
Thus, "confirmation of preadvice" is a stage in the procedure that helps both the investor and the recipient to be aware of the upcoming investment and confirms the bank's readiness to accept the funds. It's a way to ensure a more transparent and reliable investment or fund transfer process.
Key Points:
- Confirmation of preadvice is a stage of notifying the recipient bank about an upcoming transfer or investment.
- This stage ensures transparency and the bank's readiness to receive funds.
- It precedes the actual transfer of funds and the confirmation of fund receipt.
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