Investment in & Purchase of Commissionable Services

What a commission entitlement is

In commodity trading, a commission entitlement is a contractual right to receive a fee — typically a fixed amount per metric tonne, per barrel or per unit, or a percentage of transaction value — when a defined transaction performs. The right usually arises from one or more of the following:

• A fee or commission agreement between the intermediary and the buyer or seller, specifying the fee, the transaction it relates to and when it becomes payable.
• A paymaster agreement or irrevocable payment instruction under which the paying party (or its bank, or an appointed paymaster) undertakes to remit commissions to named beneficiaries out of transaction proceeds.
• The underlying commercial contract — the sale and purchase agreement (SPA) or term contract — whose performance triggers the commission.

The entitlement is only valuable if all three exist, are genuine, are enforceable, and are connected: the fee agreement must relate to a real contract between real counterparties, and the payment mechanism must actually route money from that contract to the beneficiary.

Why commission positions are hard to value

A great deal of what circulates as "commission" in the commodities market is not a genuine entitlement. Common problems include fee agreements tied to transactions that never close, chains of intermediaries each claiming a slice of a deal that does not exist, payment undertakings from parties who never agreed to them, and generic non-circumvention templates presented as if they guaranteed payment. Without verification, a buyer of a commission position is buying a piece of paper. Verification is therefore not an add-on to this service; it is the service.

What we mean by "fully verified"

Before we acquire or invest in any commission entitlement, we verify each link in the chain from the physical trade to the payment. Our verification standard covers:

The underlying transaction

• The existence of an executed sale and purchase agreement or term contract between identified, operating counterparties.
• Evidence of performance capacity: the seller's genuine access to product (production, allocation or title), the buyer's genuine ability to pay (banking relationships, payment instrument), and logistics that make sense for the lane.
• For transactions already performing, evidence of completed shipments: bills of lading, inspection certificates, invoices and confirmation of payment.

The parties

• Corporate KYC on the buyer, the seller, the intermediary and any paymaster: registration, ownership, directors, beneficial owners.
• Sanctions, politically-exposed-person and adverse-media screening on every party.
• Direct confirmation, through channels we establish independently, that the buyer or seller recognises the intermediary's role and the commission arrangement.

The commission documentation

• An executed fee agreement that identifies the transaction, the beneficiary, the amount or formula, the trigger for payment and the payment mechanism.
• Confirmation that the commission is permitted under the underlying contract and under the paying party's own policies and applicable anti-bribery laws.
• Review by counsel of the enforceability and assignability of the entitlement under the governing law.

The payment mechanism

• Confirmation from the paying party, and where possible its bank or paymaster, that commission payments will be made as documented and — following any purchase — to the account we specify.
• Assessment of the paying party's creditworthiness and history of honouring commission obligations.

If any link cannot be verified to our standard, we do not proceed. We tell the intermediary which link failed so that, where possible, it can be remedied.

Commission structures we commonly see

Commission arrangements vary by commodity and by the role the intermediary plays. The structures we encounter most often are:

• Per-unit commissions on term contracts. A fixed amount per metric tonne or per barrel on every delivery under a supply or offtake agreement. These create a stream of payments that track the contract's performance and are the most straightforward to value.
• Per-cargo success fees. A fixed fee payable when a defined cargo is delivered and paid. Common for spot trades and trial cargoes.
• Percentage-of-value commissions. A percentage of invoice value, which therefore moves with commodity prices. Valuation must take price volatility into account.
• Split commissions. A single commission shared among several intermediaries on the buyer and seller sides, usually under a fee-sharing schedule. Each beneficiary's share must be verified separately, and competing claims identified early.
• Retained origination interests. A share of a principal's margin retained by an origination partner in exchange for ongoing account management. These sit closer to profit participation than to a pure commission and require careful legal structuring.

How commission purchases work

Outright purchase

In an outright purchase, we acquire all or part of a verified commission entitlement for a lump-sum price paid upfront. The seller — the intermediary who earned the commission — receives cash today instead of waiting for performance. We take the risk and reward of future performance. The price reflects the expected commission, the expected timing of payment, the risk that the underlying trade under-performs or terminates, the credit of the paying party, and the cost of verification and administration.

Partial purchase and co-investment

Many intermediaries prefer to sell part of an entitlement — for example, the commissions on the first several shipments of a term contract, or a percentage of each payment — and keep the rest. We also co-invest alongside qualified partners, such as family offices or funds, where the size or tenor of an entitlement suits shared exposure.

Advance against commissions

Where an outright assignment is impractical, we may provide an advance against future commissions, repaid from commission payments as they arrive, with the entitlement held as security. This leaves the intermediary as the legal beneficiary while giving it liquidity today.

Investment in commissionable services

Beyond purchasing existing entitlements, we invest in origination itself. Credible intermediaries — experienced traders, agents with genuine relationships in producing or consuming markets — often need funding for travel, diligence, inspection, legal work and the months of effort it takes to bring a trade to closing. We may fund that work in exchange for a share of the commissions on the verified transactions that result, structured so that both parties' incentives align with deals that genuinely close and perform.

Assignment and payment mechanics

Commission entitlements are typically transferred by assignment: the intermediary assigns its right to receive the commission to us (or to a vehicle we and our co-investors control). The assignment is documented in an assignment agreement and, crucially, notified to and acknowledged by the paying party, so that payments are redirected. Where the governing law or the underlying documents restrict assignment, alternative structures — declaration of trust over proceeds, participation agreements or security arrangements — may be used, subject to counsel's advice.

Commission payments are directed into a designated account. Where an entitlement is shared between us and the intermediary, a paymaster or controlled-account arrangement allocates each payment according to the agreed split. All flows are documented and reconciled against the underlying shipments.

Who this service is for

Intermediaries with verified commissions

Agents, brokers and introducers who have earned genuine commissions on performing or contracted trades and want liquidity now rather than over the life of the contract — for example, to fund new origination work, to diversify, or simply to crystallise value.

Origination partners seeking funding

Experienced intermediaries with credible relationships who need capital to pursue a transaction properly — diligence, inspection, legal support, travel — and prefer to share future commissions rather than borrow.

Trading companies and principals

Traders and producers who have commission obligations to intermediaries and want those obligations administered cleanly, with verified beneficiaries and transparent payment flows, reducing the risk of disputes and competing claims.

Qualified co-investors

Family offices, funds and sophisticated investors who want exposure to cash flows from real physical trade, originated and verified to an institutional standard. Co-investment is available only to investors who meet applicable qualification requirements in their jurisdiction.

Our process

1. Initial submission. The intermediary provides a summary of the transaction, the fee agreement, the payment mechanism and the parties. We sign a confidentiality agreement covering the information shared.
2. Preliminary assessment. We assess whether the entitlement falls within our criteria — commodity, jurisdiction, size, tenor and documentation — and whether verification looks achievable.
3. Verification. We carry out the verification described above: transaction, parties, documentation and payment mechanism. This includes independent contact with counterparties and, where appropriate, their banks. Verification is at our cost; we do not charge intermediaries upfront fees.
4. Valuation. We model expected commissions, timing and risk, and propose terms: outright price, partial purchase, advance or investment structure.
5. Documentation. Counsel prepares the assignment or participation agreement, notices and acknowledgements, and any account or paymaster documentation.
6. Notification and acknowledgement. The paying party acknowledges the assignment or payment redirection. Without that acknowledgement, we do not complete.
7. Funding. We pay the purchase price or advance against completed documentation.
8. Administration. We track shipments, reconcile commission payments against performance, and report to co-investors and, where relevant, to the intermediary on the retained portion.

How we value an entitlement

Valuation starts with the expected commission cash flows: the fee rate multiplied by expected volumes, on an expected schedule. We then adjust for:

• Performance risk. The probability that each shipment occurs as scheduled, informed by the counterparties' track record, the commodity and the lane.
• Termination risk. The risk that a term contract ends early, through default, force majeure or renegotiation.
• Volume risk. Tolerances and flexibility in the underlying contract that may reduce volumes below plan.
• Payment risk. The creditworthiness of the paying party and the robustness of the payment mechanism.
• Legal risk. Enforceability and assignability of the entitlement under the governing law.
• Time value. The discount appropriate to the expected timing of payments.

The result is a price that reflects the genuine value of a verified entitlement — higher than intermediaries might expect for unverifiable positions, because verification removes uncertainty, and lower than face value, because future payments carry risk and time.

Red flags that end a review

Some features of a submission end our review immediately, regardless of the size of the commission claimed:

• Requests for an upfront payment, "processing fee" or "verification fee" before documents are shared.
• Fee agreements that do not identify the underlying transaction, the paying party or the payment trigger.
• Paying parties who cannot be contacted independently, or who deny knowledge of the arrangement.
• Proof-of-product or proof-of-funds documents that cannot be confirmed with the issuing bank or terminal.
• Chains of intermediaries in which no party can demonstrate direct access to the buyer or seller.
• Commission rates far outside the norm for the commodity, which usually indicate the transaction is not genuine.

An illustrative commission purchase

The following example is hypothetical and simplified.

An independent agent introduced a Caribbean fuel distributor to a Gulf Coast supplier and helped negotiate a twelve-month term contract for monthly diesel cargoes. Under an executed fee agreement acknowledged by the supplier, the agent earns a fixed commission per metric tonne delivered, paid by the supplier within an agreed period after each cargo is paid for. Three cargoes have already performed and the commissions have been paid on time.

The agent wants to fund new origination work and offers to sell the commissions on the next six cargoes. We verify the term contract with both principals, confirm the three completed shipments against bills of lading, inspection certificates and payment records, screen all parties, and have counsel confirm the fee agreement can be assigned. The supplier acknowledges the assignment and agrees to pay the relevant commissions to our designated account. We pay the agent a discounted lump sum reflecting expected volumes, timing and the risk of under-performance. The agent keeps the commissions on the remaining cargoes and continues to manage the relationship.

Compliance and integrity

Commissions are a legitimate and long-established part of commodity trade, but they must be paid for genuine services, disclosed to the paying party and compliant with anti-bribery and anti-corruption laws. We will not purchase or invest in any commission that:

• Is paid, directly or indirectly, to a public official or to a party acting on behalf of a public official.
• Is not disclosed to and approved by the party paying it.
• Relates to a transaction that breaches sanctions or export controls.
• Cannot be connected to a genuine, verified physical transaction.
• Depends on undisclosed side arrangements.

Every transaction is subject to our KYC and anti-money-laundering procedures. Where co-investors participate, they receive our verification file and are expected to perform their own diligence.

Regulatory note

Depending on the structure and the jurisdictions involved, the purchase of or investment in commission entitlements may be subject to securities, lending, consumer-credit or other regulation. We structure each transaction with counsel to comply with applicable law. Nothing on this page is an offer of securities or an invitation to invest; co-investment opportunities, where available, are offered only to qualified investors through appropriate documentation.

Typical criteria

We focus on commission entitlements that share the following characteristics:

• Arising from physical trades in fuels and oils, bitumen and asphalt, steel and scrap metal, rubber and tyres, or associated freight.
• Underlying counterparties that are identifiable, operating businesses with verifiable track records.
• Executed fee agreements with clear payment triggers and mechanisms.
• Paying parties willing to acknowledge assignment or payment redirection.
• Jurisdictions where the entitlement can be enforced and payments made without undue restriction.

These are guidelines rather than rigid rules; we consider any genuine, verifiable entitlement on its merits.

Why verified commissions matter to the market

A market in which commissions can be verified, valued and transferred is healthier for everyone. Intermediaries who do genuine work can realise its value. Principals benefit from cleaner, documented commission structures and fewer disputes. Unverifiable claims lose currency, because credible buyers of commission positions will not pay for paper. By applying a consistent verification standard, we aim to reward the intermediaries who add real value to commodity trade — and to make it harder for those who do not.

Frequently asked questions

What does "fully verified" mean in practice?

It means we have independently confirmed the existence of the underlying executed contract between real, operating counterparties; the identities and screening of all parties; the executed fee agreement and its enforceability; and the payment mechanism, including acknowledgement from the paying party. If any link cannot be confirmed, we do not proceed.

Do you charge upfront fees for verification?

No. Verification is at our cost. Our return comes from the economics of the purchase or investment, which we agree transparently before completion.

Can I sell only part of my commission?

Yes. Partial purchases — for example, a percentage of each payment or the commissions on a defined number of shipments — are common. You keep the remainder.

What happens if the underlying trade stops performing?

That risk is priced into an outright purchase and is borne by us for the portion we have acquired. For advances, repayment terms are agreed in advance and are set out clearly in the documentation.

Do the buyer and seller need to know about the assignment?

Yes. The paying party must acknowledge the assignment or payment redirection. Transparency with principals is a condition of every transaction we complete.

Do you purchase commissions on transactions that have not yet closed?

Generally we focus on executed contracts that are performing or about to perform. For pre-closing origination work, we may instead invest in the commissionable service itself, sharing in commissions if and when the transaction closes and performs.

Which commodities and regions do you cover?

Fuels and oils, bitumen and asphalt, steel and scrap metal, rubber and tyres and associated freight, with a focus on transactions touching the Caribbean, the US Gulf and Atlantic coasts, Mexico, Central America and northern South America.

Can I co-invest alongside Caribbean Equities?

Co-investment may be available to qualified investors, subject to applicable regulation and appropriate documentation. Please contact us to discuss eligibility.

How long does a purchase take?

Verification is the main variable. Where documentation is complete and counterparties respond promptly, a purchase can be completed in a few weeks.

What information should I prepare?

A summary of the transaction, the executed fee agreement, evidence of the underlying contract and its performance to date, details of the payment mechanism, and contact details for the parties we will need to verify with.

Will you contact my principals directly?

Yes, as part of verification and only with your knowledge. We cannot verify an entitlement without confirming it with the parties who will pay it, and the paying party's acknowledgement is required for completion in any case.

How is this different from factoring?

Factoring finances a seller's trade receivables from its buyers. A commission purchase acquires an intermediary's right to fees from a principal. The mechanics — assignment, notification, acknowledgement and controlled payment — are similar, but the risk analysis is different: we are underwriting the performance of the underlying trade and the principal's commitment to pay the commission, not simply a buyer's invoice. That is why verification of the whole chain, rather than a single receivable, sits at the centre of our process.