What it is
A paymaster performs, it does not decide.
Where a transaction requires funds to reach several recipients in fixed amounts, on fixed dates, the parties can agree that arrangement in writing and appoint someone to carry it out. That appointment is a paymaster arrangement, and carrying it out is all Cornerstone Treasury does.
The written instruction identifies every recipient, every amount, and every date before any funds are accepted. Cornerstone receives the funds into a segregated account and disburses them according to that instruction. It does not originate the instruction, negotiate it, or vary it.
The whole of the function is administrative. That is deliberate, and it is the point of the arrangement rather than a limitation on it.
Boundaries
What it is not.
These distinctions matter more here than in most descriptions of a service, because several of them separate a ministerial function from regulated activity that Cornerstone does not undertake.
- Not an escrow agent. An escrow agent holds funds subject to conditions and decides whether those conditions have been satisfied. That judgment is the essence of escrow. A paymaster makes no such judgment and is given none to make.
- Not a bank, trust company, or depository institution. Deposits are not accepted, accounts are not offered, and no banking relationship is created with any participant.
- Not an investment adviser or manager. Funds are not invested, pooled for yield, lent, or placed at risk. They are held pending disbursement and nothing else.
- Not a party to the underlying transaction. Cornerstone does not verify the transaction, opine on it, or take a position in it, and takes no interest in its outcome beyond its own fee.
- Not a source of legal or tax advice. How consideration is allocated among recipients, and the tax treatment of any allocation, are matters for the participants and their own advisers.
- Not a lender or a source of credit. No funds are advanced, and no disbursement is made before the corresponding funds have cleared.
How it is constrained
The rules the arrangement runs under.
These constraints are written into the paymaster agreement rather than left to practice. They are what makes the function ministerial in fact and not merely in description.
- Amounts, recipients, and dates are fixed before funds are accepted. The written instruction is complete at the outset. An incomplete instruction is not administered.
- No discretion is exercised over amount, timing, or recipient. Cornerstone has no authority to vary the instruction, and no authority to resolve a dispute about it.
- No disbursement is made on oral instruction. Amendments require the same written agreement among the same parties as the original instruction.
- Funds are held segregated. They are not commingled with operating funds and are not applied to any obligation of Cornerstone Treasury or of any other business operating under the Executive Services name.
- Participants are screened before funds are accepted. Identity and beneficial ownership information is collected for every participant, and an arrangement that cannot be screened is not administered.
- The fee compensates the work, not the transaction. It is fixed in the paymaster agreement before funds are accepted, reflects the scope and complexity of the administrative work an arrangement of the stated magnitude requires, and is disclosed to every participant. It is not contingent on the underlying transaction closing, not contingent on any outcome, and is not transaction-based compensation for effecting a transaction.
- A disputed instruction stops the arrangement. Where participants disagree, funds are held and the dispute is returned to the participants and their advisers. Cornerstone does not adjudicate.
On regulatory status. Whether a particular arrangement engages the licensing regimes applicable to money services depends on the facts of that arrangement, not on how a service describes itself. Cornerstone Treasury therefore states the constraints it operates under rather than asserting a conclusion about its own status.
Participants and their counsel are invited to examine those constraints and to satisfy themselves before any funds are committed. The paymaster agreement is available for review in advance in every case.
Documentation
Everything rests on one instrument.
The paymaster agreement identifies the participants, sets out the disbursement schedule in full, states the fee, fixes the account arrangements, and records what happens if funds do not arrive, if an instruction is disputed, or if the underlying transaction fails.
It is executed by every participant, not only by the party remitting funds. A participant who has not signed is not a participant, and no disbursement is made to one.