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Standards release business highlights for 2017 2020

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SWIFT Open Day Philippines 2017

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Standards release business highlights for 2017 2020

  1. 1. STANDARDS RELEASE BUSINESS HIGHLIGHTS FOR 2017-2020 Kiyono Hasaka, Lead Standards Specialist, SWIFT Standards, Asia Pacific 24 May 2017
  2. 2. SWIFT global payments innovation Payments Treasury & Commodities Securities Trade Finance Funds 2
  3. 3. SWIFT global payments innovation 3
  4. 4. SWIFT gpi: Ability to receive field 111 (Service Type Identifier) and field 121 (Unique End-to- End Transaction Reference (UETR)) in header block 3 4 SWIFT gpi CUG SR2016 gpi banks can send and receive gpi MT 103 SR2017 All SWIFT users able to receive gpi MT 103 MT 103 (001, UETR) MT 103 MT 103 MT 103 SWIFT gpi CUG MT 103 (001, UETR) MT 103 MT 103 (001, UETR) MT 103 (001, UETR) o May be present in MTs sent from a SWIFT gpi CUG member to any bank that is not in the SWIFT gpi CUG o Banks that are not members of the SWIFT gpi CUG must be able to receive these headers but may not include these headers in messages that they send o There is no obligation on non_CUG members to execute any processing based on these headers o Message Types Impacted: MT 103, MT 103 STP, MT 103 REMIT
  5. 5. UETR (Unique end-to-end transaction reference) • Field 121 in FIN Header Block 3 • Contains Universally Unique Identifier (UUID) compliant with IETF standard RFC4122* using version 4 of the generation algorithm • Format: 36!x composed of 32 hexadecimal characters, displayed in 5 groups separated by hyphens xxxxxxxx-xxxx- 4xxx-yxxx-xxxxxxxxxxxx x = any lowercase hexadecimal character y = one of 8,9,a or b • No central co-ordination • Designed to be globally unique, without risk of repetition over time • Only gpi members allowed (Network validation! - error code G27) to put it in Sample: {121:eb6305c9-1f7f-49de-aed0-16487c27b42d} * More information at https://www.ietf.org/rfc/rfc4122.txt 5
  6. 6. Service Type Identifier • Field 111 in FIN Header Block 3 • Field 111 and field 121 must both be present or both be absent (error code U12) • Format: 3!n • Code is not validated. ‘001’ is the first value used by gpi. Additional codes may be used in the future for other gpi service types. Sample: {111:001} 6
  7. 7. Sample gpi MT 103 for SR 2017 SENDER: Instructing gpi Bank BIC MT 103 RECEIVER: Instructed gpi Bank (or a non gpi Bank, SWIFT user) BIC :111:001 :121:eb6305c9-1f7f-49de-aed0-16487c27b42d :20:ABC123 :23B:CRED :32A:160115USD1010, :33B:USD1000, :50F:/Account Laurel Co. 1/Laurel 2/Address 3/Country and Town :59F:/account Hardy 1/Hardy Co. 2/Address 3/Country and Town :70: remittance info from MT 101 :71A:OUR :71G:USD10, MT 103* New field in MT 103 header, identifying the message as gpi UETR (unique end-to-end transaction reference): new field in MT103 header. The reference is generated by the gpi bank of the Debtor and transmitted throughout the payment chain, unaltered. *for illustration purposes only, not in technical format Pre-payment of OUR fees 7
  8. 8. Payments 8
  9. 9. Categories 1, 2 & 9 – SR 2020 Remove free format option from field 50 and field 59 50H MT 101 50K MT 102, MT 102 STP, MT 103, MT 103 REMIT, MT 103 STP 59 (no letter option) MT 101, MT 102, MT 102 STP, MT 103, MT 103 REMIT, MT 103 STP 50 (no letter option) MT 210 50K MT 202 COV, MT 205 COV 59 (no letter option) MT 202 COV, MT 205 COV 50K MT 910 Start preparing NOW! IMPORTANT! 9
  10. 10. Example: MT 103 Free format options will be removed from the messages in SR 2020 Free format options will be removed from the messages in SR 2020 10
  11. 11. Example: Mapping 59 (no letter option) to 59F Today SR 2020 :59:/8754219990 MAG-NUM INC. BAHNHOFSTRASSE 30 ZURICH, SWITZERLAND :59F:/8754219990 1/MAG-NUM INC. 2/BAHNHOFSTRASSE 30 3/CH/ZURICH 11
  12. 12. Categories 1 and 2 – SR 2017 • Usage rule for field 72 to ensure integrity in payments chain (e.g., MT 102, MT 103, MT 202, MT 202 COV) • Add originator (payer) field 50a in MT 110 Advice of Cheque(s) • Align the format of field 50a and 59a in MT 110 with the fields 50a and 59a in MT 103 (This implies in SR 2020 the free format option of field 50 and 59 will also be removed in MT 110) 12
  13. 13. Treasury & Commodities 13
  14. 14. • Impacted Messages: • MT 300 Foreign Exchange Confirmation • MT 304 Advice/Instruction of a Third Party Deal • MT 305 Foreign Exchange Option Confirmation • New fields for non-deliverable forwards and non-deliverable options • You will receive a NAK ! Existing NDF formats/codes will be rejected. Attempts to confirm an NDF using the old codes will be rejected • Your counterparties will send messages in the new format – mandatory migration to interpret inbound messages and send out correct outbound messages 2017 Standards Release of Category 3 – Treasury Markets Mandatory impact on users for non-deliverable trades on 19 Nov 2017 14
  15. 15. What is Foreign Exchange and Non-Deliverable Forward? Some forward FX transactions are cash settled (P/L), e.g., NDF – the FX in which one of the two ccys involved is a non- deliverable currency, cannot be delivered offshore (e.g., PHP, IDR, INR, KRW, MYR, TWD, VND). On agreed future value date, the parties calculate the +/- in value of notional amount by comparing the agreed rate at Trade date with a spot rate taken from the agreed rate source. Then net diff. is then settled in an agreed major currency. Settled 2 biz days from the Trade date Settled in the future e.g., on agreed future date, Party A pays EUR1M to Party B and Party B pays USD1.1M to Party B 15
  16. 16. 16 2017 Standards Release of Category 3
  17. 17. 17 2017 Standards Release of Category 3
  18. 18. 18 2017 Standards Release of Category 3
  19. 19. 19 2017 Standards Release of Category 3
  20. 20. 20 2017 Standards Release of Category 3 – Treasury Markets
  21. 21. • Add ISIN field to derivatives messages (MiFiDII) (MT 300, 304, 305, 306, 340, 341, 360 & 361) • Add Canadian jurisdiction codes for regulatory reporting (MT 300, 304, 305, 306, 340, 341, 360 & 361) • Add new optional field for clearing /settlement session ID (used by CLS) (MT 300 & 304) • Update text to clarify that for a non-deliverable option, the valuation date is the same as the expiry dates (MT 305) • MT 303 and MT 307 are removed 2017 Standards Release of Category 3 – Treasury Markets 21
  22. 22. 2017 Standards Release of Category 3 – Treasury Markets Where to find more information https://www.swift.com/standards/standards-releases/mt-release-2017#topic-tabs- menu http://www.isda.org/cgi-bin/_isdadocsdownload/download.asp?DownloadID=154 http://www.isda.org/cgi-bin/_isdadocsdownload/download.asp?DownloadID=1417 http://www.emta.org/ndftt.aspx 22
  23. 23. Category 6: Commodities • Add ISIN field to derivatives messages (MiFiDII) (MT 600 & 601) • Add Canadian jurisdiction codes for regulatory reporting (MT 600 & 601) • Add a ‘delete’ option in SSI messages (MT 670, 671) • Add a new field to identify a preferred SSI (MT 670, 671) 23
  24. 24. Removal of Unused Messages - MT 207 (Request For Financial Institution Transfer) - MT 256 (Advice of Non-Payment of Cheques) - MT 303 (Forex/Currency Option Allocation Instruction) - MT 307 (Advice/Instruction of a Third Party FX Deal) - MT 574 ((W8BENO) IRS 1441 NRA) - MT 577 (Statement of Numbers) - MT 579 (Certificate Numbers) - MT 609 (Statement of Commodity Contracts) - MT 643 (Notice of Drawdown/Renewal) - MT 644 (Advice of Rate and Amount Fixing) - MT 646 (Payment of Principal and/or of Interest) - MT 649 (General Syndicated Facility Message) 24
  25. 25. Securities 25
  26. 26. Category 5 – Securities • Settlement and Reconciliation o Add format option to allow for lengthy party names (MT 586) o Add a reminder code (MT 586) o Add settlement transaction condition code for “buy in” (MTs 540 to 543 & 548, 578, 537, 586) o Add 9 new settlement transaction type codes (MT 578 and MT 586) o Align definitions of triparty references (TCTR, TRCI) across S&R and collateral messages o Add a rejection reason code (INVM) (MT 548) o Add new Settlement Transaction Conditions (Split Settlement) (MTs 540, 542, 544, 546) o 2 definition changes to S&R and CA messages (INTR & Repo CALL/ROLP) 26
  27. 27. Category 5 – Securities • Corporate Actions o Amend definition of Extension of Maturity event o Amend definition of Partial Redemption events o Add new indicator code and amount to process Cash Amount instructions o Amend definition of Proration Rate o Reinstate Taxable code to TXAP indicator o Delete Fully Frank rate o Rename BOIS reason code to solve inconsistencies 27
  28. 28. Trade Finance SR 2018 & SR 2019 28
  29. 29. Categories 4 and 7– Trade Finance • No changes for SR 2017 • Significant changes will be implemented in SR 2018 and SR 2019 SR 2018 changes to MTs 700 – 759 • 2 new change requests considered for implementation in SR 2018 – Align MT 707 fully with MT 700 – Add free text field to MT 756 to be aligned with MT 752 SR 2019 changes to MTs 760 – 787 These changes include 9 new messages Advance information about the changes and the new messages will be published in the 1st quarter of 2017 29
  30. 30. Implementation Time Line 2015 2016 2017 2018 L/C 2019 Guarantees standbys Feb Mar Sep Feb May Jul Nov DecFeb May Jul Nov Country vote result BPC Rejected 4 CRsBPC Approved 30 CRs Advance Documentation Dec LIVET&TVTB UHB Documentation SRG Documentation SRG Documentation LIVET&TVTB UHB Documentation Jun Annual Deadline for CR Feb 30
  31. 31. 31
  32. 32. Category 7 Update Changed messages MT 700 Issue of a Documentary Credit MT 701 Issue of a Documentary Credit MT 705 Pre-Advice of a Documentary Credit MT 707 Amendment to a Documentary Credit MT 710 Advice of a Third Bank's or a Non-Bank's Documentary Credit MT 711 Advice of a Third Bank's or a Non-Bank's Documentary Credit MT 720 Transfer of a Documentary Credit MT 721 Transfer of a Documentary Credit MT 730 Acknowledgement MT 732 Advice of Discharge MT 734 Advice of Refusal MT 740 Authorisation to Reimburse MT 742 Reimbursement Claim MT 747 Amendment to an Authorisation to Reimburse MT 750 Advice of Discrepancy MT 752 Authorisation to Pay, Accept or Negotiate MT 754 Advice of Payment/Acceptance/Negotiation MT 756 Advice of Reimbursement or Payment MT 760 Issue of a Demand Guarantee/Standby Letter of Credit MT 767 Amendment to a Demand Guarantee/Standby Letter of Credit Amendment MT 768 Acknowledgement of a Guarantee/Standby Message MT 769 Advice of Reduction or Release Documentary Credits Guarantees Standbys 32
  33. 33. Category 7 Update New messages MT 708 Amendment to a Documentary Credit MT 744 Notice of Non-Conforming Reimbursement Claim MT 761 Issue of a Demand Guarantee/Standby Letter of Credit MT 765 Guarantee/Standby Letter of Credit Demand MT 775 Amendment to a Demand Guarantee/Standby Letter of Credit MT 785 Guarantee/Standby Letter of Credit Non Extension Notification MT 786 Guarantee/Standby Letter of Credit Demand Refusal MT 787 Guarantee/Standby Letter of Credit Amendment Response MT 759 Ancillary Trade Structured Message Documentary Credits Guarantees Standbys All Cat 7 33
  34. 34. General – L/C and Guarantees/Standbys • Creation of a message MT 759 (Ancillary Trade Structured Message) similar to MT 799 using a limited number of coded and structured fields • Addition of a field to refer to a document sent by another channel (e.g. FileAct) • Adoption of extended “Z” character set for long fields (e.g. 45A, 46A, 47A, 71, 72, 73, 77) X Z 34
  35. 35. Documentary Credits Overview of work items and topics - 1 • Re-design of MT 707 – Full alignment with MT 700 – Structured fields for any modification – Use of codes ADD, DELETE, REPLACE ALL for the long narrative fields – Specific tag for amendment charges • Addition of 2 fields to indicate the Special Instructions for Payment (to be conveyed to the Beneficiary or for the Advising Bank only) • Addition of the Bank that is requested to add confirmation or may add its confirmation • NEW MSG: Continuation message for wording changes (MT 708) - 45B Description of Goods and/or Services - 46B Documents Required - 47B Additional Conditions • NEW MSG: Advice of non-conforming claim (MT 744) Message sent by the reimbursing bank to the bank claiming reimbursement as notification that the claim, on the face of it, as not to be in accordance with the instruction in the Reimbursement Authorisation for the reason(s) as stated in this message. 35
  36. 36. Documentary Credits Overview of work items and topics - 2 • Addition of additional narrative field 79Z to MT 730 and MT 752 • Renamed field 42P (Deferred Payment Details to Negotiation/Deferred Payment Details) • Deletion of some codes from 40A (Form of Documentary Credit) - Deleted ‘revocable’ codes - In SR2019, the ‘standby’ codes will be removed • Change field 43P (Partial Shipment) and 43T (Transshipment) to code ̶ ALLOWED ̶ CONDITIONAL ̶ NOT ALLOWED • Renamed and structured field 48 (Period for Presentation to Period for Presentation in days) ̶ 3n[/35x] - (Days)(Narrative) • Changed field 49 (Confirmation Instructions) definition • Changed usage rules for fields 45, 46 and 47 to support more extension, from 3 to 8 extension messages, for MT 701, MT 711 and MT 721 • Added an optional field in MT 742 for compliance requirements 36
  37. 37. Guarantees and Standby Letters of Credit Overview of work items and topics • Enforcement of use of MT 760 (and MT 767) for Demand Guarantees / Standby Letters of Credit • Significant re-design of MT 760 + new continuation message (MT 761) • Significant re-design of MT 767 + new continuation message (MT 775) • NEW MT: Guarantee/SBLC Demand (incorporating Extend or Pay) (MT 765) • NEW MT: Guarantee/SBLC Non-Extension Notification (MT 785) • NEW MT: Guarantee/SBLC Demand Refusal (MT 786) • NEW MT: Guarantee/SBLC Amendment Response (MT 787) • Addition of new field 23X (File Identification) to all messages 37
  38. 38. Guarantees and Standby Letters of Credit General overview revised message structure of MT 760 Sequence A General Information Sequence B Undertaking Details MT 760 MT 761 Wording of Undertaking or Counter-Undertaking ---------------------------- Requested wording for Local Undertaking MT 761 MT 761 1 2 3 The revised MT 760 message consists primarily of structured fields and fields with coded options (e.g. amount, parties, expiry details, etc.) The message has been designed with three blocks: Sequence A: General information Sequence B: indicates the details of the undertaking or counter-undertaking Sequence C: (optional) indicates the details of the requested local undertaking 1 The extension message MT 761 message consists primarily of a big free text block in order to specify the wording of the undertaking/counter-undertaking as well as the requested wording for the local undertaking – if applicable 2 Up to a maximum of 8 MT 761 messages could accompany the MT 760 message3 Sequence C Local Undertaking Details 38
  39. 39. Guarantees and Standby Letters of Credit Direct Guarantee Applicant BeneficiaryIssuing Bank Advising Bank MT 798<784> Application MT 798<760> with A and B (MT 798 <761> *) (Files) MT 760 with A and B (MT 761 *) MT 798<762> Notification MT 798<760> with A and B (MT 798 <761> *) (Files)22R:ISSU 39
  40. 40. Guarantees and Standby Letters of Credit Indirect Guarantee Applicant BeneficiaryIssuing Bank Advising Bank MT 798<784> Application MT 798<760> with A B (MT 798 <761> *) (Files) MT 760 with A B C (MT 761 *) MT 798<762> Notification MT 798<760> with A B (MT 798 <761> *) (Files) Local Issuing Bank MT 760 with A B (MT 761 *) 22R:ISSC 22R:ISSU 40
  41. 41. Guarantees and Standby Letters of Credit Direct Guarantee with two advising Applicant BeneficiaryIssuing Bank 2nd Advising Bank MT 798<784> Application MT 798<760> with A B (MT 798 <761> *) (Files) MT 760 with A B (MT 761 *) MT 798<762> Notification MT 798<760> with A B (MT 798 <761> *) (Files) 1st Advising Bank MT 760 with A B (MT 761 *) 22R:ISSU 22R:ADVI or ACNF 41
  42. 42. Funds (ISO 20022) 42
  43. 43. SWIFTNet Funds solution • Maintenance freeze on the ISO 20022 investment funds order (setr) messages in the SWIFTNet Funds solution has been lifted • Mandatory maintenance – all solution users must be able to send/receive the new message versions from 18 November 2017. • Old versions of the order messages will be withdrawn from the live service when the new versions go live • Release is known as Funds 5.0 43
  44. 44. • All funds users informed (e-mail campaign began December 2015) • High level information available since July 2016 • Draft message formats (schema), documentation and Funds 5.0 service description available since 2 December 2016 • Web-ex sessions ‘Standards Release Seminar for Order, Status & Confirmation Messages’ took place between October 2016 and February 2017 • Seminar is a useful overview of the order maintenance, a recording of this seminar will be made available SWIFTNet Funds solution – communication Contact Janice.Chapman@swift.com for further information about Funds 5.0 44
  45. 45. SWIFTNet Funds solution – documentation Link to Solution UHB: https://www2.swift.com/uhbonline/books/hub/httoc.htm Final version will be posted 24 February 2017 Solutions Funds Standards MX - technical – Message Definition Reports and Schemas Standards MX – General Information Funds 5.0 (2017) Message Definition Reports and Schemas (Advance Information) (2 December 2016) Service Description (2 December 2016) MX Order v03 to V04 Equivalency Funds 4.9 (2016) Message Definition Reports and Schemas (15 April 2016) Service Description (15 April 2016) 45
  46. 46. SWIFTNet Funds solution – impacted order messages Order, status and confirmation messages setr.001-018, 047-058 o inclusion of alternative/hedge funds functionality o simplification of charge and commission sequences. Will eliminate the ambiguity, risks for misinterpretation, facilitate transparency o Addition of LEI Main changes 46
  47. 47. Order messages impacted by the maintenance 1 of 3 SWIFTNet Funds solution – impacted messages Order Instructions: [1] Redemption Bulk Order setr.001.001.03 [2] Redemption Order setr.004.001.03 [3] Subscription Bulk Order setr.007.001.03 [4] Subscription Order setr.010.001.03 [5] Switch Order setr.013.001.03 Order Cancellation Requests: [6] Redemption Bulk Order Cancellation Request setr.002.001.03 [7] Redemption Order Cancellation Request setr.005.001.03 [8] Subscription Bulk Order Cancellation Request setr.008.001.03 [9] Subscription Order Cancellation Request setr.011.001.03 [10] Switch Order Cancellation Request setr.014.001.03 47
  48. 48. Order messages impacted by the maintenance 2 of 3 SWIFTNet Funds solution – impacted messages Order Confirmations: [11] Redemption Bulk Order Confirmation setr.003.001.03 [12] Redemption Order Confirmation setr.009.001.03 [13] Subscription Bulk Order Confirmation setr.006.001.03 [14] Subscription Order Confirmation setr.012.001.03 [15] Switch Order Confirmation setr.015.001.03 Order Status: [16] Order Instruction Status Report setr.016.001.03 [17] Order Cancellation Status Report setr.017.001.03 [18] Request For Order Cancellation Status Report setr.018.001.03 48
  49. 49. SWIFTNet Funds solution – impacted messages Order Confirmation Cancellations : [19] Subscription Order Confirmation Cancellation Instruction setr.047.001.01 [20] Subscription Bulk Confirmation Cancellation Instruction setr.049.001.01 [21] Redemption Order Confirmation Cancellation Instruction setr.051.001.01 [22] Redemption Bulk Order Confirmation Cancellation Instruction setr.053.001.01 [23] Switch Order Confirmation Cancellation Instruction setr.055.001.01 Confirmation Status: [29] Order Confirmation Status Report setr.057.001.01 [30] Request For Order Confirmation Status Report setr.058.001.03 Order Confirmation Amendments, setr.048, 050, 052, 054 and 056 are withdrawn from ISO and SWIFTNet Funds Order messages impacted by the maintenance 3 of 3 49
  50. 50. Manage Standards Release More Efficiently
  51. 51. 1. Plan your implementation with your software vendor/IT dept 2. Use FIN Test and Training (T&T) – the new standards will be available in Future mode as of 23 July 3. Run a Pilot with your major counterparties end-to-end and complete transaction flow Plan your migration to SR 2017 to go-live on 19 November Syntactic Correctness Semantic Correctness End-to-end Interoperability Vendor Testbed available as of 6 May 2017 51
  52. 52. Standards MT Release 2017 maintenance timeline See SR 2017 timeline for advance documentation on future standards releases (https://www.swift.com/standards/standards-releases/mt-release-2017 link) 52
  53. 53. Standards MX Release 2017 maintenance timeline See SR 2017 timeline for advance documentation on future standards releases (https://www.swift.com/standards/standards-releases/mx-release-2017 link) 53
  54. 54. Standards Changes Impact your business at different levels Assess impact of changes on your environment Update back office applications Reflect the next release in the messaging interface Update documentation and procedures • Impacted messages • Related Change Requests • Business Impact of the changes • Priorities and Focus areas From business flows and processes to back office and interface applications 54
  55. 55. Proactively prepare for each MT Standards Release Ensure a smooth transition to the next Standards Release Understand Specify Check Go Live Manage your Standards Release efficiently Standards Release Impact Assessment & MyStandards MT Standards Release Portal 55
  56. 56. Questions Thank you Kiyono Hasaka Lead Standards Specialist Banking & Payment Standards SWIFT 8 Marina View Asia Square Tower 1, #28-04 Singapore +65 6347 8000 +65 6347 8064 +65 6347 8099 +65 8686 6172 kiyono.hasaka@swift.com www.swift.com T D F M W E 56

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