📘 Knowledge Base

When Is a Confirmation of Principal Required?

Short Answer

A Confirmation of Principal is required anytime a transaction involves an introduction, intermediary, mandate, or broker, and the bank must formally establish who the true Principal Party is.

It is a clarity and protection document, not a formality.

✅ Situations When It Is Required

🔹 1. When an Intermediary or Broker Makes an Introduction

If a transaction is introduced by:

• A broker

• A mandate

• An intermediary

• A consultant or representative

The Confirmation of Principal is used to:

• Identify the true Principal

• Confirm the introducer is not the Principal

• Prevent multiple or conflicting claims

🔹 2. Before the Bank Communicates Beyond the Introduction

Once an introduction is made, the bank cannot continue unless it knows:

• Who it is legally dealing with

• Who has authority to proceed

• Who controls the transaction

The Confirmation of Principal authorizes the bank to move from:

Introducer → Principal-to-Bank communication

🔹 3. When Privacy Must Be Enforced

Because U.S. Capital Private Bank operates as a Private Bank and Trust, it cannot disclose:

• Principal information

• Transaction details

• Bank communications

to brokers or third parties without written confirmation from the Principal.

The document enforces that privacy boundary.

🔹 4. Before Fees or Commissions Are Recognized

If any intermediary claims a fee or commission:

• The Principal must acknowledge it in writing

• The bank must confirm payment terms

• Fees must be tied to successful closing only

The Confirmation of Principal:

• Prevents fee disputes

• Prevents unauthorized claims

• Protects the Principal from surprise obligations

🔹 5. Before Issuing Sensitive Documents or Instruments

The Confirmation of Principal is commonly required before:

• RWA (Ready, Willing & Able) issuance

• Bank-to-bank correspondence

• SWIFT pre-advice or transmission

• Instrument issuance (LC, SBLC, BG, MTN)

This ensures the bank is acting only on instructions from the rightful party.

🔹 6. When There Is Any Risk of Multiple Principals

If there is a possibility that:

• More than one party claims to be the Principal

• Instructions may conflict

• Authority is unclear

The Confirmation of Principal locks the structure and prevents escalation or rejection by compliance or risk departments.

❗ When It Is NOT Required

A Confirmation of Principal is generally not required when:

• The client was sourced directly (no intermediary)

• The bank already has a clear Principal relationship

• No third party is involved in the introduction

🧠 In One Sentence

The Confirmation of Principal is required whenever a transaction is introduced by a third party and the bank must formally establish who the true decision-maker and beneficiary is—before proceeding.

🔗 How It Fits With Other Documents

The Confirmation of Principal works together with:

• The Smart Plan Agreement

• Bank-to-bank procedures

• RWA and SWIFT workflows

Each document serves a different protection purpose.

📞 Need Clarification?

If you’re unsure whether your transaction requires a Confirmation of Principal, our team will confirm it quickly.

Email: customerservice@uscapitalprivatebank.com
Website: https://uscapitalprivatebank.com
Phone: +971 52 992 6005

Banking platform reminder: The CRM Portal is used for communication, support, and service coordination. For secure onboarding, document verification, account setup, transaction preparation, and more efficient client service, please also register on the U.S. Capital Private Bank banking platform at www.uscapitalprivatebank.com as soon as your CRM Portal registration is complete.