A time draft that is drawn by a provider of goods and services on a buyer/ importer (the drawee), who accepts (by adding signature) to pay a certain amount of money by or on a preset future date. In this sense, it is similar to a banker’s acceptance (BA) except that it is drawn on and accepted by a counterparty (buyer/ importer) not a third-party bank.

This instrument is negotiable and marketable; that is it may be sold in secondary markets to an investor at a discount.