Welcome to Know the Sciac Card - The Best Financial Crisis Solution

Sciac Card a New Financial Instrument Concept

The Sciac card is a new financial instrument concept, an innovation recently patented in USA under the title "Method and System for Integrating Savings and Credit with Different Interest Rates".

Sciac is an integrated savings and credits account system for long, medium and short term. It is very simple,versatile and flexible as for carrying out transactions as for making installment payment.

The Sciac card is also a payment instrument, which is useful for buying and selling all kinds of values at any amount, whether they are high, medium or lower, such as money, securities, credit titles, goods or services.

The Sciac card is a "plain vanilla" financial instrument like the Financial Regulatory Reform is dreaming for the financial system.

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Sciac Improves Employment Paid with Credit

Sciac provides many social and economic benefits, one very important in crisis time is to improve employment of people and physical resources, by selling work, goods and services paid with long or medium term Sciac credit.

The Sciac savings made by people can be used to buy with Sciac credit anything, also it can be discounted by money with any investor, as well as it can be saved or used to pay debts.

In the same way, if in the business the entrepreneurs have any resources without using or selling, they can be offered for sale to be paid with long or medium-term Sciac credit, and the Sciac savings obtained in the sale can be used to buy with Sciac credit, discounted by money, saved or used to pay debts.

Independent Patrimonial Account for Pension

The proposal of the Pension System Bicentenary Reform consists in the implementation of an Independent Patrimonial Account that would be an account more of the pension system in which would show the patrimonial value that the affiliate would have, indepen- dently on the patrimony that would have in the pension funds.

The Independent Patrimony Account would be the patrimony of the affiliate, which would be the sum of the savings in the pension Sciac Accounts plus the value of the assets acquired in pension guaran- ty, minus the debts that would has in the Sciac Account used to get the assets in pension guaranty.

The pension Sciac Accounts would be opened voluntarily to pay in the pension contributions, the transfers of resources from other funds that the affiliate would have in the Pension Fund Administra- tor PFA, and eventually the resources that would obtain selling assets in pension guaranty.

Every savings that is made in these pension Sciac Accounts would pay market long term fixed or adjustable effective interest rate; effective saving that would be maintained in a nominal value equi- valent to the nominal interest rate of the payment plan.

The installment that would correspond to pay for this savings according to the payment plan of the pension Sciac Accounts would be reinvested in the same Sciac Account until the affiliate is pensioned. From this moment, the affiliate would begin to receive the ordinary installment and could obtain credit in a year, if it has available credit limit, by a fraction inversely proportional to its life expectative.

The “total pension savings” in the pension Sciac Account plus the amount in the PFA funds would be considered in the credit limits available to acquire patrimonial goods in housing, capital assets and other investments for rent education, and to pay education and health services for the affiliate and its dependent family with the Sciac Card.

The total pension savings would not be authorized to be conside- red as part of the credit limit available in the Sciac Card for transactions of free availability that don’t increase the affiliate’s patrimony.

The purchase of a patrimonial good or service would be made with the Sciac Card in a Sciac Account of long term parallel to a Pension Sciac Account which will have the same installment plan.

Having both Sciac account the same payment plan, one with pen- sion savings and the other probably with debts, the affiliate would pay an interest and commission for the debt balance only by the net balance of the two accounts, if it was a debt.

The goods that are acquired as pension patrimony – real estate, fixed o movable assets or securities – should be left as pension guaranty as mortgage or pledge collateral, to ensure that the installments will be paid and the good will not be sold before that the affiliate is pensioned, unless the selling is done to fund the purchase of a greater value good that would be kept as a guaranty, or is done to be integrated in the pension Sciac account, or as a guaranty it would have to be liquidated to pay a not regularized debt greater than the limit credit.

For the purchase of a house, the affiliate would be able to receive a subsidy if qualifies to it, which would be made effective at the moment of the purchase. For the education payments, the affiliate would be able to apply to a state guaranty and/or a subsidy if qualifies for it. The state guaranty for education would keep their value until the beneficiary is 24 years old, since then it would get depreciated in a 2% per month (rate to be defined in a range).

The patrimonial value of the education would be determined by the rent that can be obtained with that education, value that would get depreciated if the person is not working. For the payment for healthcare services they would be able to use the “total pension savings” as credit limit to pay the differences that doesn’t cover the healthcare system and has as origin a high spending properly proved.

The affiliate also would be able to use the “total pension savings” as part of the credit limit to acquire with credit assets for an own or familiar company, or in partnership with a third party if this would be or is its main source of work and income.

Finally also the affiliate would be able to buy assets that generate income independently of the affiliate’s work, only if the affiliate fulfilled the need of housing; which could be in other real estate or other goods such securities, which can be given as pension guaranty.

If for any reason the affiliate could not pay the installments for long term Sciac Accounts debts, due to the affiliate’s payment capacity has decrease because is unemployed or other reason, and also its credit limit is used up, leaving the total pension savings as its only option of fund. The affiliate could use it to pay the ordinary install- ment, for a limited time, when passed the pension guaranty would be liquidated by selling the house or another good. If there is estate guaranty in the account for a spending in education it would be the last that would be done.

The affiliate would be able to transfer funds from the Pension Sciac Account to other PFA Funds in any moment and vice versa. None- theless, to avoid a massive transfer from the PFA Funds to Sciac Accounts, that could affect the Funds, should be established transitory restrictions until the system is stabilized.

Prorierty Management System

Prorierty is a new concept of flexible property that facilitates the transaction of goods required in guaranty for credits that is propo- sed to be analyzed for their legislation in the MKB agenda in Chile.

Some procedures that delay the transaction of properties are the title studies, the preparation of deeds, the uprising and inscription of the mortgages or pledges when the goods are given in guaranty.

The liquidation of guaranties to the mortgagers that don’t fulfill their credit contracts also suffers delays due to their processes, which affect to the debtors as well as the banks.

This proposal for the MKB is a way to solve these problems.

Prorierty is an invented word to name the concept that is proposed.

The prorietor is the owner of the prorierty of a good, which allows exercising similar right as the property; nonetheless the prorietor is not the proprietor of the good, being this a company “prorierty administrator”.

To make a contract of a prorierty is necessary that the good is owned by the prorierty administrator and that is constituted as a prorierty, registering this condition in the corresponding property registration administrator.

The prorierty over a good can be bought in cash or with credit to the prorierty administrator. The financial instrument adequate to buy with credit the prorierty would be the Sciac Card, instrument that has been proposed for the MKB, which operational flexibility allows easily managing the prorierties contracts; nevertheless it would also be able to do with other instruments, although they would not take full advantage of the prorierty.

There are three parts in a prorierty contract, the prorietor, the prorierty administrator, and a bank that finance the operation to the prorietor, if it is needed, and that takes the guaranty over the pro- rierty to ensure the payment of the installments or, if the prorierty is paid in cash, to grant a credit limit to the prorietor so it can buy other values with credit.

The prorierty is lost if, being in guaranty, there is a non-fulfillment of the credit contract, as well as by seizure or another reason, if this is not given in guaranty.

When the prorietor loses the rights over the prorierty it has to give back the ownership to the creditor, who could keep the rights or reclaim its value to the prorierty admnistrator.

The bank would liquidate the guaranty over the prorierty pay itself in first instance with a credit that the bank will give to the prorierty administrator by the value of the good defined in the credit limit. If the value is not enough, the bank will have to wait the reselling of the prorierty that the prorierty admnistrator will do, to pay the rest of the value debt to the bank if the reselling value is higher and the remaining to prorietor.

If the value of the reselling is lower than the value that the prorierty admnistrator paid to the bank, the bank would have to make the loss if it can not recovery more money from the prorietor, so it will require the prorierty administrator consent in case the prorietor and the bank want to increase the value of the good considered in the credit limit.

If the value of the reselling is higher, the difference should be destined in first place in paying the debts that the prorietor is keeping unpaid and without guaranty with the bank. If paid the difference, there are still remaining, this should be paid to the prorietor.

The price of the reselling will have to be accepted by the prorietor; in case of not accepting it the prorierty administrator will look a better buyer until it founds one that is willing to pay a satisfactory price. Any way, the costs of interests by the credit gave to the prorierty administrator as well as the one that could keep unpaid by the debtor for the time it takes the selling, will be charged to the prorietor.

The prorierty administrator will operate for these effects as a real estate agent, which will have the right to charge for commissions.

The prorierty administrator will be able to give other banking services related to the administration of the guaranties and making valuations; also it will be able to give services of real estate or other goods agent.

The prorierty administrator won’t be able to mortgage or pledge the goods which have been constituted as prorierties.

The prorierty administrator will be able to acquire goods to constitu- te as prorierties in any time, nonetheless the goods should not be mortgaged or pledged when they are being sold as prorierty.

The prorierty administrator will be able to sell the goods if they are not constituted as a prorierty or if they are the owners and the goods are not in guaranty.

The properties, which have been constituted as prorierties, will be not able seized. The prorierties would be seized if they are not given in guaranties.

The prorierty has advantages over the property, rent and leasing for people that need durable good, as well as for banks that give financial services for the purchasing, and also it would be a very good and stable business for prorierties administrators.

The greatest advantages for people would be that the prorierty will facilitate transaction of the properties by taking less time and cost.

The greatest advantages for the banks would be to have a new and efficient guaranty system, which would contribute to increase credit transactions due to an easier way to make them and also to get lower costs of operations.

Sciac Untangles Liabilities & Assets Management

The financial system is based in several paradigms, the most are rational but some are discussable. One of them is the management of savings system and credit system separately. Many people, companies and institutions, privates and states, have savings for one side and debts for another.

Many people have savings in pension systems and simultaneously are paying mortgage loans; the majority of companies have debts with their suppliers and banks, and accounts receivable by their sales; and a lot of institutions also have financial liabilities and assets.

If these financial liabilities and assets could be integrated in one or few accounts, the financial situations of these entities would be more stable and then the financial system would be more stable. We would not have payment chain problems as we had dramatically in the current financial crisis.

Why does financial system not have integrated savings and credit account financial instruments?

There are not economical reasons; on the contrary, it would be very necessary to the economy improvement. The problem is only technical and mathematical finance. But also is a banking paradigm problem, the most banking people are blind in front of this possibility.

The Sciac card is a financial instrument that allows integrating savings and credit accounts. Therefore, it is an instrument that would contribute to solve faster the financial liabilities and asset management problems generated in this financial crisis and before.

[Published in the Bank Innovation and American Banker Blog]

Remarkable Properties of Sciac Card Formula

The Sciac card formula has remarkable mathematical finance properties which make it a very simple, versatile and flexible financial product.

Due to its formula the Sciac card has unsurpassable operational and functional advantages, also in cost, market and clients, as well as allows an easy and transparent control for users and regulatory entities.

The Sciac card is particularly useful in the long and medium term savings and credit market, where bonds, mortgage loans and installment credit instruments are used; but also is competitive, with advantages, in the short term savings and credit market, where credit cards and savings accounts are used.

Sciac Card Useful in Old & New Financial Market

The Sciac card is not only useful with great advantages in every traditional credit market, such as real states and projects in the long term, movable properties in the medium term, services and consumer products in the short term, but also opens new long term credit markets for medium amounts, such as movable properties, education and professional services.

At the same time Sciac opens new markets for savings in the long, medium and short term, by selling any kind of value that will be very useful for large, medium and small companies, institutions and investors, as well as for individuals.

Would you like to pay the university with a long term credit using the mortgage loan guarantee or to receive a periodical flexible income from your savings? The Sciac card is the best solution.

Objectives for Pension Fund Bicentenary Reform

The Bicentenary Reform to the Pension Fund System that is proposed with the purpose to evolve from the actual system of individual capitalization towards to an individual patrimonial system, of which main goal is to achieve that people during their active life accumulate in a more effective way and more suitable to their necessities the necessary patrimony so they can have enough income to carry at least a dignifying subsistence for their passive life from their incomes and the consuming of their patrimony.

The proposed solution to satisfy this main goal is the implementation of one Independent Patrimonial Account IPA, which also allows achieving the following additional objectives are:

Motivate independent workers to pay in the pension fund.
Decrease debts of the affiliates.
Increase investment for housing, education, heath, companies’ capital and other profitable assets for the affiliates in Chile.
Decrease AFP funds in investments of variable assets and foreign investments of low relation between opportunity/risk.
Integrate the subsidies for housing and education to the pension fund.
Reduce load to the state to satisfy minimum pensions.