concern over so-called "prime'' bank instruments which can often be fraudulent.

Schemes involving the issuance, trading, or use of so-called "prime'' bank guarantees or "standby letters of credit'' and similar financial instruments have cost investors around the world more than $1 billion, according the International Chamber of Commerce (ICC).

"The BMA has not had inquiries specifically (but) we felt, as part of our regular providing of information, it would be useful to local investors to alert them,'' said Mr. Peter Sousa, manager, Investment services division of the BMA.

International regulators and agencies, including the Bank of England, the UK Investment Management Regulatory Organisation Ltd., the US Federal Reserve, and the US Securities and Exchange Commission, have previously issued strong warnings against prime bank fraud.

Promoters of these schemes or investments claim they have been issued by the world's top 50 or 100 prime banks and offer unrealistic annual rates of return, sometimes as high as 150 percent.

Promoters will often decline to name the so-called prime bank when asked or will request an advance fee before they give a name. If a promoter does identify a bank it is usually a major international lending institution to lend credibility to the scheme and the use of the bank's name is unauthorised, according to the BMA release.

The BMA listed other common characteristics of these fraudulent schemes which include; Undue emphasis on secrecy and non-disclosure agreements.

Fixed-term maturities of one, five or ten years plus a day.

A confusing business proposal.

References to ICC derivatives (many of the schemes refer to ICC forms 3039 and 3093, which do not exist, but are claimed to be issued under ICC rules).

Confusing jargon and vague answers in response to questions.

Claims the guarantee is irrevocable and must be honoured at maturity.

Excessive references to well-known institutions or people.

Insistence on "key tested'' telexes.

Photocopied documents (promoters have created documents using letterhead from well-known banks).

"Given the risk of fraud, members of the general public should exercise extreme caution before supplying information or engaging in any transaction involving any note, guarantee, letter of credit, debenture or similar type instrument which includes in its description the expression `prime bank','' the BMA added.

Inquiries can be directed to the manager of the BMA's investment services division.