SWIFT_L2.ppt with detailed version of swift

| Financial Services
Contents
S.W.I.F.T
1. Various SWIFT Messages
2. SWIFT Infrastructure
3. SWIFT Utilities for Payment processing
4. MT Formats (MT101/103/202/940/942 etc)
© 2012 Capgemini - Internal use only. All rights reserved.
1

Lets Revise the L1 learning
 1. Message Formats
 Introduction to Messaging
 Messaging – Types
 Messaging Infrastructure Vs Messages
 2. SWIFT
 Introduction to SWIFT
 Message Structure & Categories
 Message Blocks
 Fin Messages
 3. ISO20022
 ISO20022 XML Standard
 An Example :Pain.001.001.03
 PAIN and PACS Messages
 Fin Messages
Revision
2

Contents
S.W.I.F.T
1.a. SWIFT message formats
1.b. SWIFT Message Categories
1.c. Message Structure
1.d. Types of payments
4. MT Formats (MT101/103/202/940/942 etc)
3

 SWIFT is a worldwide community of financial institutions whose purpose is to provide
communication solutions enabling interoperability between its members, their market
infrastructures and their end user communities.
 SWIFT was formed when seven major international banks met in 1974 to discuss the
limitations of Telex as a means of secure delivery of payment and confirmation
information.
 The discussion started in 1974 lead to the formation of a society which went live in
1977 with 230 banks in 5 countries.
 Currently it has 9000+ institutions spanning across 230 countries
Why SWIFT –
 Telex was the alternative for SWIFT. It suffered from number of limitations:
 Speed
 Free Format and
 Lack of Security
SWIFT
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 SWIFT messages are identified in a consistent manner.
 They all start with literal “MT” which denotes message type. This is then followed by a
three digit number.
 The first digit represents a category.
 A category denotes messages grouped together because they all relate to particular
financial instruments or services.
SWIFT Messages
5

 The message type is composed of three digits, generally defined as Message Structure
 Category :
 Usually describes, at a general level, the underlying business function of the
message. For example: Category 1 = Customer Payments and Cheques.
 Group :
 Describes the function of the message within the specified category. For example:
Group 0 = Instructions (Category 1 and 2); Group 1 = Pre-advices (Category 1 and
2); Group 9 = Queries (all Categories).
 Type
 Describes the specific function. Example: 101 = Request for Transfer.
SWIFT Message Format
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MT103
 Category : 1 : Customer Transfers and Cheques
 Group : 0 : Instructions
 Type : 3 : Single Customer Credit Transfer
SWIFT Message Format - example
7

SWIFT Message Categories
Category Description
Category 1 Customer Transfers and Cheques
Category 2 Financial Institution Transfers
Category 3 Treasury Markets, Foreign Exchange, Money Markets & Derivatives
Category 4 Collections, Cash Letters
Category 5 Securities Markets
Category 6 Precious Metals, Syndications
Category 7 Documentary Credits, Guarantees
Category 8 Travelers Cheques
Category 9 Cash Management, Customer Status
8

 The SWIFT message has following general structure comprised of following blocks
{1: BASIC HEADER BLOCK}
{2: APPLICATION HEADER BLOCK}
{3: USER HEADER BLOCK}
{4: TEXT BLOCK}
{5: TRAILER BLOCK}
SWIFT Message Structure
9

SWIFT Message Blocks – Example Message
{1:F01INGBATWWAXXX2222123456}
{2:I103INGBNL2AXXXXU3003}
{3:{113:URGT}{108:INTLPMTS}}
{4:<CRLF>
:20:494932/DEV<CRLF>
:23B:CRED<CRLF>
:32A:080901EUR100,12<CRLF>
:33B:EUR100,12<CRLF>
:50K:FRANZ FRANZZEN<CRLF>
VIENNA<CRLF>
:59:/0123456789
J. JANSSEN<CRLF>
AMSTERDAM<CRLF>
:70:/INV/18042 980872<CRLF>
:71A:SHA<CRLF>
-}
{5:{CHK:123456789ABC}{TNG}}
] Basic header block
] Application header block
] User header block
Text block
] Trailer block
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{1: Basic Header Block}
The Basic header block has the following format:
{1: F 01 BANKBEBB A XXX 2222 123456}
(a) (b) (c) (d) (e) (f)
Fixed Length, continuous with no field separators
a) Block ID - always '1:'
b) Application ID - F = FIN, A = GPA or L = GPA (logins, etc)
c) Service ID - 01 = FIN/GPA, 21 = ACK/NAK
d) LT address - 12 Characters, must not have 'X' in position 9
In the basic header, the Logical Terminal Code within the LT address is specific to the LT
that has established the session in which the message is being transmitted (i.e. the
sending LT for input messages or the receiving LT for output messages).
e) Session number - added by the CBT, padded with zeroes
f) Sequence number - added by the CBT, padded with zeroes
Message Structure
11

{2: Application Header Block}
The application header has a different format depending on whether it is being sent to
or from SWIFT.
The Input (to S.W.I.F.T.) structure is as follows:
{2: I 100 BANKDEFFXXXX U 3 003}
(a) (b) (c) (d) (e) (f) (g)
Fixed Length, continuous with no field separators from user to SWIFT.
a) Block ID - always '2'
b) I = Input
c) Message Type
d) Receivers address with X in position 9 and padded with X's if no branch
e) Message Priority – S = System, N = Normal, U = Urgent
f) Delivery Monitoring –
1 = Non Delivery Warning (MT010)
2 = Delivery Notification (MT011)
3 = Both Valid = U1 or U3, N2 or just N
g) Obsolescence Period - when a non delivery notification is generated Valid for U = 003
(15 minutes) Valid for N = 020 (100 minutes)
Message Structure
12

The Output (from SWIFT) structure is as follows:
{2: O 100 1200 970103BANKBEBBAXXX2222123456 970103 1201 N}
(a) (b) (c) (d) (e) (f) (g) (h)
Fixed Length, continuous with no field separators From S.W.I.F.T. to user
a)Block ID - always '2:'
b) O = Output
c) Message Type
d) Input time with respect to the Sender
e) MIR with Senders address
f) Output date with respect to Receiver
g) Message priority
Message Structure
13

{3: User Header Block} - This has the following structure:
{3: {113:xxxx} {108:abcdefgh12345678} }
(a) (b) ( c)
This is an optional block and is similar in structure to system messages.
a) Block ID - always '3:‘
b) Optional banking priority code
c) Message User Reference MUR used by applications for reconciliation with ACK
Message Structure
14

{4: Text Block or body}
Block 4 constitutes the body of the message which is as depicted :
{4:<CrLf>
:20:PAYREFTB54302<CrLf>
:32A:970103BEF1000000,<CrLf>
:50:CUSTOMER NAME<CrLf> AND ADDRESS<CrLf>
:59:/123-456-789<CrLf> BENEFICIARY NAME<CrLf> AND ADDRESS<CrLf> -}
Message Structure
15

{5: Trailer Block}
A message always ends in a trailer with the following format:
{5: {MAC:12345678} {CHK:123456789ABC}
It contains a number of fields that are denoted by keywords such as:
 MAC: Message Authentication Code calculated based on the entire contents of the
message.
 CHK: Checksum calculated for all message types
 PDE: Possible Duplicate Emission added in case the user has sent the message
previously
 PDM: Possible Duplicate Message added by SWIFT if in the case a message has been
transmitted previously.
 DLM: Added by SWIFT if an urgent message has not been delivered within 15 minutes
or a normal message within 100 minutes.
 TNG: A trailer added to all FIN Test and Training messages, that identifies those
messages as training messages.
 MRF: System adds Message reference Trailer to FINCopy MT 096 messages, to
specify the message reference of the original user message
 SYS: System message trailer is added to system messages.
Message Structure
16

 FIN - FIN is SWIFT's core store-and-forward message processing service. It enables
financial institutions to exchange financial data worldwide, securely, rapidly and reliably.
SWIFT messages are identified in a consistent manner.
 FileACT - File ACT provides reliable and cost-effective messaging platform for carrying
large volumes of payments instructions.
 InterAct - Interactive exchange of information for messages that are time-critical and
need an instant response.
 Browse - Integration with SWIFT Net Inter Act / File Act for security sensitive data or
services.
Types of SWIFT Payments
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 FIN is SWIFT's core store-and-forward messaging service.
 It is a secure, reliable and resilient, access-controlled, structured store-and-forward
messaging service.
 Value added processing includes message validation to ensure messages are formatted
according to SWIFT message standards, delivery monitoring and prioritization, message
storage and retrieval.
 It is based on a distributed processing architecture with full, built-in redundancy to
ensure maximum availability.
 FIN enables over 8,300 financial institutions in more than 200 countries to exchange
financial data securely, cost effectively and reliably.
FIN Payments
18

FileAct provides a cost-effective way to transfer large volumes of data in different formats to
your correspondents. Whether you need to transfer mass payments information,
documents, images, or other data, FileAct provides you with a single channel to your
correspondents around the globe. Two mechanisms are available to FileAct users:
— push files to correspondents (file transfer) or
— get files from correspondent (file download)
Over 8,500 banking organizations, securities institutions and corporate customers in more
than 208 countries trust us every day to exchange millions of financial data.
Benefits
 Highly resilient and reliable
 Secure
 Global reach
 Easy implementation
 Open
 Cost effective
key features
 Highly resilient and reliable FileAct is a highly reliable solution to send business-critical
files. With an availability ratio of above 99.99%, the SWIFT Net platform enjoys the
highest reliability rates in the industry
FileAct
19
19

 InterAct is SWIFT's interactive messaging service
 Designed to complement FileAct and FIN, InterAct can support tailored solutions for
market infrastructures, closed user groups and financial institutions.
With InterAct, institutions and communities can exchange messages in an automated
and interactive way — an application sends a request message to another application
and receives an immediate response message.
InterAct is well suited to mission- and time-critical applications such as Continuous
Linked Settlement (CLS), SWIFT’s Accord matching application or real-time gross
settlement systems (RTGS).
InterAct messaging features include:
 Interactive exchange of messages in synchronous or asynchronous mode
 Standard XML message envelopes
 Trusted time and time-stamping
 Support of multiple services
 Support of closed user groups
 XML syntax validation
 Store and forward mode
InterAct
20
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Browse is an ideal way for you to provide services to your clients whether they be other
financial institutions or corporates - by reusing your existing SWIFTNet infrastructure.
Browse offers you the capability to browse remote web servers using Alliance Web Station,
a low-cost, manual interface product. Browse combines the ease of Internet Protocols and
the reliability and security of SWIFTNet. The communication is secured using the strong
authentication and security features of SWIFTNet.
Benefits
 Enhance existing online portals
 Create competitive advantage
 Increase your client reach
 Reduce costs
 Benefit from state-of-the-art
 security and reliability
Browse key features
 Browsing security- Browse exchanges are secured by the combined use of the
Secure Layer protocol and SWIFT’s Secure IP Network.
 Integration with InterAct and FileAct - Sensitive business transactions can be
exchanged through InterAct or FileAct messages or file transfers. Such messages and
files benefit from all the features of these services, including high security, reliability and
central message validation.
Browse
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21

Contents
S.W.I.F.T
2.a. SWIFT message flow Input
2.b. SWIFT message flow Input
4. MT Formats (MT101/103/202/940/942 etc)
22

SWIFT Infrastructure - Message Flow
B/O
Apps
SWIFT Alliance
Access (SAA)
SWIFTNet Link
(SNL)
SWIFT Network
S
T
A
G
I
N
G
S
E
R
V
E
R
SWIFT Network Partners
Infonet BT, AT & T , COLT , EQUANT
CBT Interface viz., SAA, TurboSWIFT, Mint, Merva, Fastwire Mandatory
Security Layer
SWIFT Alliance
Gateway (SAG)
ACK / NACK
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 RMA ensures that you as a SWIFT User will be able to reflect the business
relationships you have in place, by providing full control over the traffic that will be
received from your correspondents.
RMA is not limited to FIN, but can be used with all SWIFTNet services requiring such
controls
Benefits
 Avoiding unwanted traffic: with RMA, unwanted traffic is stopped at the sender. This
means that you, as receiver, are shielded from unwanted traffic and its potential
negative consequences, such as investigations, auditing, regulatory reporting and
reputational risk.
 Simpler than BKE: the RMA protocol is much simpler than today's BKE mechanism.
With RMA, there is no need to renew authorizations every 6-12 months, as is the case
in the current BKE world leading to reduced staffing to manage RMA.
 Providing relationship management capabilities on SWIFTNet: RMA is a generic
SWIFTNet feature designed to give you the necessary controls over your SWIFT
counterparts. RMA will be used on SWIFTNet FIN as well as on other SWIFTNet
services that require similar level of control over correspondent traffic.
 More granular control over counterpart relationships: with RMA, you can not only
control from who you want to receive traffic, but also what you want to receive. For FIN,
this will mean that you can (optionally) control correspondents up to the level of
individual authenticated message types
RMA - Relationship management application
24

SWIFT Infrastructure - Message Flow and Acknowledgment
SWIFT
ACK/ NAK
On Input
Positive Acknowledgement (ACK) sent by system to sender accepting the message for
onward transmission.
Negative Acknowledgement (NAK) sent by system to sender notifying the rejection of the
message with error code
.
On Output
Positive Acknowledgement (ACK) sent by CBT to SWIFT confirming safe receipt and
acceptance of message
Negative Acknowledgement (NAK) sent by CBT to SWIFT rejecting the message (e.g.
corrupted message – wrong checksum).
ACK/NAK
25

SWIFT & RTGS systems : Y-Shaped Structure
Central
Institution
User A User B
1
2
3 4
5
1. User A sends message to User B
2. Original message is held in Central
Processor
3. Message is copied by central processor
to Y-Net Server, and sent in an subset to
Central institution
4. Central institution Authorize the message
and send an authorization to Central
processor
5. Central processor forwards the message
to User B. If not authorized, processor
/central institution returns message to
User A
Some RTGS systems particularly those that use the S.W.I.F.T. network, apply a message structure, known as
a Y-Shaped structure.
26

Central
Institution
User A User B
1
2
3
1. User A sends message to User B. Original
message is sent thru Central Processor to B.
2. A Copy of message sent to Central Institution.
3. Central institution will settle the funds between
the participating banks.
SWIFT & NET systems : T-Shaped Structure
Some NET systems particularly those that use the S.W.I.F.T. network, apply an message structure, known as
a T-Shaped structure
27

Clearing House Automated Payment System
CHAPS payment instructions are routed via the SWIFT network (Using Y Copy) to the RTGS system and
settled individually across the paying and receiving CHAPS banks’ settlement accounts.
28

Contents
S.W.I.F.T
3.a. Trade service utilities
3.b. TSU components
3.c. TSU components
4. MT Formats (MT101/103/202/940/942 etc)
29

SWIFT Utility - TSU Trade Service Utility
Seller Buyer
Seller’s
bank
Forwarder Warehouse Airlines
Shipping
Transport Inspection
Quarantine
Government
Payment
Goods
Buyer’s
bank
EDI FAX EMAIL COURIER
EDI FAX EMAIL COURIER
Highly paper
driven
Lack of
standards
Physical document
delivery
Supply Chain Current Scenario
30

SWIFT Utility - Trade Service Utility
 TSU is a collaborative, centralized matching and workflow engine for use by the SWIFT banking
community.
 It is designed to help banks provide competitive supply chain services to their corporate customers.
 TSU’s primary function are to compare data sets as submitted by the banks and then report the results
back to the banks.
 TSU is a SWIFT service using SWIFTNet messaging and XML standards to access a central data
matching and workflow.
31

Physical presentation of
compliant documents
Electronic presentation of
compliant data
BPO as Industry-wide Interbank Risk Mitigation
Instrument
SWIFT Utility - Trade Service Utility
32

SWIFT Utility - Trade Service Utility Components
Trade Services Utility application implements the Trade Services Utility matching service.
Few terminologies good to know.
 InterAct/FileAct: InterAct/FileAct real time (from user to Trade Services Utility) and InterAct/FileAct
store-and-forward (from Trade Services Utility to user) are used to exchange Trade Services Utility
messages
 Trade Services Utility interface : an optional Java application that provides a graphical user interface
to the Trade Services Utility service, for banks that select not to integrate the Trade Services Utility
with their back offices.
 Browse : a SWIFTNet messaging service only needed for users that require the Trade Services Utility
interface.
 Alliance Web Station : a browser-based interface platform used for SWIFTNet PKI and Alliance
Gateway
management and for the Trade Services Utility interface.
 Alliance Gateway : a SWIFTNet interface providing a single window for access to SWIFT.
33

Contents
S.W.I.F.T
4. MT Formats (MT101/103/202/940/942 etc)
4.a. Message Flow
4.b. Message descriptions & examples of MT* messages
34

Scope of MT101: Request For Transfer
 This message is sent by a Financial Institution on behalf of a Non-Financial Institution
account owner, i.e. the Ordering Customer or Instructing Party, and is subsequently
received by the Financial Institution where the account is serviced.
 It is used to move funds:
 From the ordering customer's account serviced at the receiving financial institution
(or at the account servicing institution),
 From an account owned by the ordering customer which the instructing party has
explicit authority to debit, e.g. a subsidiary account.
 MT101 can be used to order the movement of funds:
 Between ordering customer accounts.
 In favour of a third party, either domestically or internationally.
SWIFT FIN: MT101
35

 Customer of ING wants to transfer an EURO amount from his AAB-account
to Supplier (Banking with Rabobank)
 AAB holds an EURO account with Rabobank
 Customer sends in his request to ING
 ING sends an MT101 requesting to debit the EURO account of the Customer
at AAB
 AAB sends an MT103 requesting to debit its EURO account at Rabobank and
credit the account of the supplier at Rabobank
MT101 (example)
Customer ING SWIFT AAB SWIFT Rabobank Supplier
36

Sender INGBNL2A
Message Type 101
Receiver ABNANL2A
Message text
M Sender’s Reference :20:ING12345
O Customer Specified Reference :21R:CUST101-56
M Message Index/Total :28D:1/1
M Ordering Customer :50G:/0123456789
Customer
M Requested Execution Date :30:080915
M Transaction Reference :21:TR1-PL
M Currency/Transaction amount :32B:EUR118982,05
O Account With Institution :57A:RABONL2U
M Beneficiary :59:/0318929889
Supplier
O Remittance Information : 70:/ROC/RA-PL-9876-87
/INST/Customer
MT101 (example)
37

Scope of MT103: Customer Credit Transfer:
 This message type is sent by or on behalf of the Financial Institution of the Ordering
Customer, directly or through correspondent, to the Financial Institution of the
Beneficiary Customer.
 It is used to convey a funds transfer instruction in which the Ordering Customer or the
Beneficiary Customer, or both, are Non-Financial Institutions from the perspective of
the Sender.
 For the purpose of Straight Through Processing (STP) the MT103+ is available; same
structure as the normal MT103 but use of specific tags is limited or even not allowed.
SWIFT FIN: MT103
38

 Example when there is a Direct Account Relationship between first and last Financial
Institution:
 Customer (banking with ING) wants to transfer 5,032.19 EURO to their Supplier (Banking
with Rabobank)
 ING holds an EURO account with Rabobank (Direct Account Relationship )
 ING sends an MT103 requesting to debit its EURO account at Rabobank and credit the
account of the supplier at Rabobank
MT103 (example 1)
Customer ING SWIFT Rabobank Supplier
39

Sender: INGBNL2AXXX
Receiver: RABONL2UXXX
Message Type: 103
Message text
M Sender’s reference :20:Reference
M Bank Operation Code :23B:CRED
M Value date, Ccy, Amount :32A:080926EUR5032,19
M Ordering Customer :50K:Customer
M Beneficiary Customer :59:/0123456789
Supplier
O Remittance Information :70:/INV/10039930
M Details of Charges :71A:SHA
MT103 (example 1)
40

Citibank Bombay Citibank New York
Receiver….CB NY
Sender…. CB Bom
100 02
20:Ref No
32A:Date/Curr/Amt
50: Remitter
59:Beneficiary
70:Paymt Details
71A:Charges
Customer
(Remitter)
Beneficiary
MT 103
Bank Payment
41

Scope of MT103+: Straight Through Processing
 For the purpose of Straight Through Processing (STP), MT103+ is available.
 In MT 103+ the user header of the message (block 3) is mandatory.
 Block 3 must contain the code STP in the validation flag field 119 ({3:{119:STP}}).
SWIFT FIN: MT103+
42

 MT101 compared to the MT103: differences in use
SWIFT FIN: FIN Payments
MT101 MT103
Initiating message from Customer to the
Bank servicing its account: Request
Message between Banks: Funds
Transfer on behalf of the Customer
Previous to sending no settlement has
been done
Sending bank already made a booking
in its ledger
43

Scope of MT200
 This message type is sent by an account owner to one of its account servicing
institutions.
 The Sender has another account in same currency with other financial institutions,
which will be the beneficiary account.
 MT200 is used to request the movement of funds from main sender account to the
beneficiary account.
MT 200 Financial Institution Transfer for its Own Acct
MT205
Beneficiary
Account
(INR)
Sender
Account
(INR)
HSBC, US
CitiBank, US
Sender’s same
currency account
with different
financial
institution
44
MT 200
HDFC,India

MT200 Characteristics
 The beneficiary of this transfer is always the Sender.
 The beneficiary and the sender account are in different countries but in same currency.
MT 200 Financial Institution Transfer for its Own Acct
45

Scope of MT201
 This multiple message type is sent by an account owner to one of its account
servicing institutions.
 The Sender has more than one account in same currency with other financial
institutions which are the beneficiary accounts.
 MT201 is used to request the movement of funds from main sender account to the
several beneficiary accounts which belongs to the sender.
MT 201 - Multiple FI Transfer for its Own Acct
46

MT 201 - Multiple FI Transfer for its Own Account
Beneficiary
Account
(INR)
ING Bank, Amsterdam
Beneficiary
Account
(INR)
SNS Bank NV, Amsterdam
Deutsche Bank, Amsterdam
Beneficiary
Account
(INR)
Sender
Account
(INR)
ABN Amro, Amsterdam
MT 205
47
MT 205
MT 205
MT 201
UBS, Zürich

 The beneficiary of each transfer is always the Sender.
 The beneficiary and the sender account are in different countries but in same
currency.
 With MT 201 the sender can request transfer of funds to more than one account in
one go.
MT 201 - Multiple FI Transfer for its Own Account
48

MT202 COV – Introduction
 MT 202 COV must only be used to order the movement of funds related to an
underlying customer credit transfer that was sent with the cover method.
 In MT 202 COV the user header of the message (block 3) is mandatory.
 Block 3 must contain the code COV in the validation flag field 119 ({3:{119:COVP}}).
MT 202 COV General Financial Institution Transfer
49

Scope of MT202 COV
 This message is sent by or on behalf of the ordering institution directly, or through
correspondent(s), to the financial institution of the beneficiary institution.
 The message contains a mandatory sequence to include information on an underlying
customer credit transfer and has a maximum message length of 10,000 characters.
 The MT 202 COV must not be used for any other interbank transfer. For these
transfers the MT 202 must be used.
MT 202 COV General Financial Institution Transfer
50

The MT 202 COV consists of two sequences:
 Sequence A General Information is a single occurrence sequence and contains
information on the financial institution transfer between the ordering institution and
beneficiary institution.
 Sequence B Underlying Customer Credit Transfer Details is a single occurrence
sequence and is used to provide details on an individual underlying customer credit
transfer.
MT 202 COV Format Specifications
51

Mandatory Sequence A General Information
52

Mandatory Sequence B underlying customer credit transfer details
53

MT 202 COV General FI Transfer Cover Method
MT103
MT202 COV
MT910
Ordering Customer
Ordering Customer’s Bank
Cover Bank
Bank of Beneficiary
Beneficiary
54

Direct message
SWIFT Message, MT 103
55

MT 202 COV – Cover message
SWIFT Message, MT 202 COV
56

MT 202 vs MT 202 COV
57
MT202 MT202 COV
It is used to order the movement of funds to the beneficiary
institution.
This message may also be sent to a financial institution servicing
multiple accounts for the Sender to transfer funds between these
accounts. In addition it can be sent to a financial institution to
debit an account of the Sender serviced by the Receiver and to
credit an account, owned by the Sender at an institution specified
in field 57a.
It must only be used to order the movement of funds related to an
underlying customer credit transfer that was sent with the cover
method.
This message must not be used to order the movement of funds
related to an underlying customer credit transfer that was sent
with the cover method. For these payments the MT 202 COV or
MT 205 COV must be used
The MT 202 COV must not be used for any other interbank
transfer. For these transfers the MT 202 must be
used.
All parties to the transaction must be financial institutions All parties to the financial institution transfer (Sequence A) must
be financial institutions.
The transfer of funds between the ordering institution and the
beneficiary institution is always related to another transaction.
Field 21 must refer to this transaction.
The transfer of funds between the ordering institution and the
beneficiary institution is always related to an underlying customer
credit transfer. Field 21 must refer to the underlying transaction.
If the Sender wishes to instruct the Receiver to debit its account
serviced by the Receiver and to credit one of its several accounts
at an institution specified in field 57a, field 58A must contain the
number of the account to be credited and the name of the Sender.
The MT 202 COV must not be used to convey customer credit
transfer instructions; it is used to order the movement of funds
related to an underlying customer credit transfer that was sent
with the cover method.
The MT 202 COV must not be forwarded to the beneficiary
financial institution for reporting purposes.

Serial” Payment vs“Cover” Payment
58

Scope of MT203
 It is used to order the movement of funds to each beneficiary institution.
 The multiple message MT203 is sent in following ways –
 By ordering institution directly to beneficiary institutions.
 Correspondent financial institution sends on behalf of ordering institution
directly to beneficiary institutions.
 By ordering institution directly to financial institution of beneficiary institutions.
 Correspondent financial institution sends on behalf of ordering institution to
financial institution of beneficiary institutions.
 All parties to the transactions must be financial institutions.
 This message may also contain order(s) for the movement of the Sender’s own funds in
favour of itself.
MT 203 - Multiple General Financial Institution Transfer
59

 Scope of MT204
 This message is sent by an exchange or clearing house, or another financial institution
to a SWIFT member or sub member.
 MT204 instructs the Receiving member of the message to debit the account(s) of a
third party specified in the message.
 The debited amount has to be credited in favour of the Sender of the message.
 This message requires the implementation of special procedures, its use is governed
by relationship agreements between counterparties.
 The interested customers need to formally request SWIFT to be activated within the
FIN sub application in order to be able to send or receive this message.
MT 204 - Financial Markets Direct Debit Message
60

MT205 COV – Introduction
 MT205 COV is only used to further transmit a funds transfer instruction related to an
underlying customer credit transfer that was sent with the cover method.
 In MT 205 COV the user header of the message (block 3) is mandatory.
 Block 3 must contain the code COV in the validation flag field 119 ({3:{119:COV}}).
MT 205 COV Financial Institution Transfer Execution
61

Scope of MT205 COV
 MT 205 COV is sent by the Receiver of an MT 202 COV, MT 205 COV or other
equivalent message (for example ISO 20022 Financial Institution Credit Transfer)
 It can be sent directly or through correspondent(s), to the financial institution of the
62

The MT 205 COV consists of two sequences:
 Sequence A General Information is a single occurrence sequence and contains
information on the financial institution transfer between the ordering institution and
 Sequence B Underlying Customer Credit Transfer Details is a single occurrence
sequence and is used to provide details on an individual underlying customer credit
transfer that was sent with the cover method.
63

 Mandatory Sequence A General Information
Status Tag Field Name
M 20 Transaction Reference Number
M 21 Related Reference
O 13C Time Indication
M 32A Value Date, Currency Code, Amount
M 52A Ordering Institution
O 53A Sender's Correspondent
O 56a Intermediary
O 57a Account With Institution
M 58a Beneficiary Institution
O 72 Sender to Receiver Information
M = Mandatory, O = Optional
64

Mandatory Sequence B underlying customer credit transfer details
M 50a Ordering Customer
M 52a Ordering Institution
O 56a Intermediary Institution
O 57a Account With Institution
M 59a Beneficiary Customer
O 70 Remittance Information
O 72a Sender to Receiver Information
O 33B Currency/Instructed Amount
M = Mandatory, O = Optional
65

MT103
MT202 COV
MT910
Ordering Customer
Sender
Sender’s Correspondent
MT205 COV
Receiver’s Correspondent
Receiver
Beneficiary Customer
66

Scope of MT210
 This message type is sent by an account owner to one of its account servicing
institutions.
 It is an advance notice to the account servicing institution that it will receive funds to
be credited to the Sender’s account.
MT 210 - Notice to Receive
Account Owner
Account owner’s
servicing institution
MT 210
67

Scope of MT 900 : Confirmation of Debit
 This message type is sent by an account servicing institution to an account owner.
 This message sent by an account servicing institution to a party authorized by the
account owner to receive the information.
 Sent by a concentrating financial institution to an account owner or a party authorized
by the account owner to receive the information entry.
SWIFT FIN: MT 900
68

SWIFT FIN: MT 900 Format Specifications
Content
/Options
M 20 Transaction Reference Number 16X
M 21 Related Reference 16X
M 25 Account Identification 35X
M 32A Value Date , Currency Code, Amount 6!N31a15d
O 52A Ordering Institution A or D
O 72 Sender to Receiver Information 6*35X
69

Example of MT900
70

Example of MT900
71

Scope of MT910 : Confirmation of Credit
 This message sent by an account servicing institution to an account owner.
 It is sent by an account servicing institution to a party authorized by the account
owner to receive the information
 MT910 sent by a concentrating financial institution to an account owner or a party
authorized by the account owner to receive the information.
SWIFT FIN: MT910 Advice
72

SWIFT FIN: MT910 Advice
M 20 Transaction Reference Number
M 21 Related Reference
M 25 Account Identification
M 32A Value Date, Currency Code , Amount
O 50a Ordering Customer
O 52a Ordering Institution
O 56a Intermediary
O 72 Sender to receiver Information
73

Scope of MT940: Customer Statement Message
 This message type is used to transmit detailed information about all entries debited
or credited to a customer account, serviced by a financial institution.
 It is sent by an account servicing institution (reporting institution) to a Financial
Institution (concentrating institution) which has been authorized by the account
owner to receive it.
 Statements block (MT940), next to transaction information, contains opening
balance, closing balance and statement number. Only MT940 data should be used
for ERP automated book entry.
SWIFT FIN: MT940 Statement
74

Sender ABNANL2A
Message Type 940
Receiver INGBNL2A
Message Text
M Transaction Reference Number 20:123456
O Related Reference :21:
M Account Identification :25:0123456789
M Statement Number/Sequence Number :28C:123/1
M Opening Balance :60F:C080902EUR395212311,71
O Transactions
:61:080903C50000000,NTRFNONREF
ORDER BK OF BANK X
O 2nd Transaction :61:080905C5700000,NFEX036960
:86:DIVIDEND LOCAL CORP
M Closing Book Balance :62F:C080903EUR445212311,71
O Closing Available Balance :64:C080903EUR445212311,71
O Forward Available Balance :65:C080905EUR450912311,71
MT940 (example)
75

SWIFT FIN: MT940 Statement
76

Scope of MT942: Interim Transaction Report
 This message type is used to transmit detailed and/or summary information about
entries debited or credited to the account since the last statement or balance
report, or since the last interim transaction report (sent in the period since the last
statement or balance report).
 MT942 blocks are for intraday information purposes only and main task of these is
fast informing of customer about movements on accounts.
SWIFT FIN: MT942
77

Sender ABNANL2A
Message Type 942
Receiver INGBNL2A
Message Text
M Transaction Reference Number :20:345678
O Related Reference (MT 920) :21:5678
M Entry Number/Page Number :28C:124/1
M Debit Floor Limit :34F:EURD120000,
C Credit Floor Limit :34F:EURC55000,
M Date/Time Indication :13D:0206261200+300
O Transactions :61:080902D120000,NCOLABCD
:61:080902C55000,NFEX99485
O Number and Sum of Debits :90D:1EUR120000,
O Number and Sum of Credits :90C:1EUR55000,
MT942 (example)
78

Scope of MT950: Statement Message
 This message type is sent by an account servicing institution to an account owner.
 It is used to transmit detailed information about all entries (whether or not caused
by SWIFT messages) booked to the account of a Financial Institution.
 This statement is used by the receiving Financial Institution for reconciliation.
 As the MT950 Statement message does not allow to transport the additional
information that typically needs to be reported on the entries of customer
statements, the MT940 is recommended to be used in all situations as statement
message towards corporate customers.
SWIFT FIN: MT950
79

Sender ABNANL2A
Message Type 950
Receiver INGBNL2A
Message Text
M Transaction Reference Number :20:123456
M Statement Number :28C:102
M Opening Balance :60F:C080902EUR3723495,
O Transactions :61:080903D1,2FCHG494935
O 2nd Transaction :61:080903D30,2NCHK78911
FAVOUR K. DESMID
M Closing Balance :62F:C080903EUR3723463,6
O Closing Available Balance :64:C080903EUR3759863,2
MT950 (example)
80

 This message type is normally used by financial institutions to send information for
which another message type is not applicable.
 It can be used as a status message to report reasons for a transaction instruction not
being executed or as a message to reject a transaction.
MT 199 Free Format Message
81

n95 - Queries
 Requests information relating to a previous message or amendment to a previous
message
This message type is:
 sent by a financial institution to another financial institution.
 sent by a corporate customer to a financial institution.
 sent by a financial institution to a corporate customer.
 It is used to request information or clarification relating to a previous SWIFT or non-
SWIFT message or to one or more transactions contained therein.
 A query may also be sent to request that an amendment be made to a previous
message, except in those cases where a specific message, or facility within a message,
has been provided for this purpose in the related category, for example, MT 707,
AMEND in field 22 of the MT 300.
 The category digit of the MT n95 Queries must be:
 If related to a SWIFT message, the category digit of the related message.
 If not related to a SWIFT message, the category digit which best describes the business purpose of
the message.
n95 Queries
82

n96 - Answers
 Responds to an MT n95 Queries or MT n92 Request for Cancellation or other
messages where no specific message type has been provided for the response
This message type is:
 sent by one financial institution to another financial institution.
 sent by a corporate customer to a financial institution.
 sent by a financial institution to a corporate customer.
 It is used to respond to an MT n95 Queries or MT n92 Request for Cancellation and
other messages where no specific message type has been provided for the response.
This message should use the same category digit as the related queries message or
request for cancellation.
n96 Answers
83

Question Bank
84
1. Category 9 in SWIFT messages refers to –
1. Customer Transfers and Cheques
2. Treasury Markets, Foreign Exchange, Money Markets & Derivatives
3. Precious Metals, Syndications
4. Cash Management, Customer Status

Question Bank
85
2. File ACT provides reliable and cost-effective messaging platform for carrying Low
volumes of payments instructions.
1. True
2. False

Question Bank
86
3. RMA stands for
1. Relationship management application
2. Resource management application
3. Resource management area
4. Related management application

Question Bank
87
4. The Trade Services Utility has five roles, which are defined in the Trade Services
Utility Service .
Which is/are not TSU roles out of below :
1. Buyer's bank
2. Seller's bank
3. Submitting bank
4. Issuing bank
5. Obligor bank
6. Receiving bank

Question Bank
88
5. MT101 is -
1. Request for Transfer
2. Multiple Customer Credit Transfer
3. Single Customer Credit Transfer
4. Direct Debit and Request for Debit Transfer Message

Question Bank
89
6. In MT200 beneficiary and the sender account are in different countries but in same
currency.
1. True
2. False

Question Bank
90
7. MT 900 is message type which sent by an account servicing institution
to –
1.Beneficiary Bank
2. Account owner
3. Clearing house
4. Beneficiary customer

Question Bank
91
8. Category 5 in SWIFT relates to -
1. Securities Markets MT
2. Treasury Markets – Precious Metals
3. Documentary Credits & Guarantees MT
4. Travelers Cheques MT

Question Bank
92
9. Which message is used for sending Free Format Message in SWIFT
1. MT102
2. MT 199
3. MT602
4. MT940

Question Bank
93
10. Requests information relating to a previous message or amendment to a previous
message can be done with help of below message format
1. MT102
2. MT 199
3. MT602
4. n95

Question Bank
94
11. Responds to an MT n95 Queries or MT n92 Request for Cancellation or other
messages where no specific message type has been provided for the response
can be done with help of -
1. MT102
2. n91
3. n96
4. n95

Question Bank
95
12. MT950 is statement Message
1. False
2. True

Question Bank
96
13. Interim Transaction Report can be retrieved by message -
1. MT250
2. MT942
3. MT944
4. MT302

Question Bank
97
14. This message sent by an account servicing institution to an account owner once
the money is credited in to account.
1. MT250
2. MT942
3. MT910
4. MT302

Question Bank
98
15. ---------is a highly reliable solution to send business-critical files in SWIFT platform
1. File Act
2. Inter Act
3. Browse
4. Merva

Question Bank
99
16. We get the Confirmation of Debit from bank account. The SWIFT message is used
for this is -
1. MT250
2. MT900
3. MT910
4. MT302

Question Bank
100
17. Beneficiary customer can raise a request for financial institution fund transfer by
message format MT203
1. True
2. False

Question Bank
101
18. Beneficiary customer can raise a request for financial institution fund transfer by
message format MT203
1. True
2. False

Question Bank
102
19. In the serial payment method, funds transfer instructions divides the message
into two parts & send them serially
1. True
2. False

Question Bank
103
20. Customer Credit Transfer message type is sent by or on behalf of the Financial
Institution of the Ordering Customer, directly or through correspondent, to the Financial
Institution of the Beneficiary Customer. Message type no of this message is -
1. MT103
2. MT105
3. MT107
4. MT942

Answers
104
Answers are marked in comment section of this slide
Instruction for eLearning' –
Randomly generate any 15 questions out of 20.
Passing score would be 80%.
Show the correct answers after user has taken the exams/quiz.
In case he/she does not pass, ask him/her to take the course again.

 www.SWIFT.com
References
105

More information
Please contact: Payments Practice Team
106

SWIFT_L2.ppt with detailed version of swift

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