SWIFT Engine
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BS SWIFT Engine


BS SWIFT Messaging provides a comprehensive messaging interface that helps organizations automate the processing of complex SWIFT transactions, thereby bridging the gap between internal back-office systems and SWIFT Interoperability. This way, financial institutions are able to optimize business activities such as payments, securities, settlement, and trade services.

SWIFT Overview

SWIFT (Society for Worldwide Interbank Financial Telecommunication) offers a global financial network for financial institutions to exchange secure, well-formatted information with each other. Today, SWIFT provides secure, standardized messaging and interface software to more than 7,500 financial institutions in 200 countries. The SWIFT community includes banks, broker/dealers, custodians and investment managers.

SWIFT developed its original messaging service, FIN, over an X.25 network and based on proprietary message standards. Several years ago, SWIFT introduced SWIFTNet, the new IP-based network to provide business-focused messaging, real time operations and leverage from internet technologies. SWIFT Net supports for standards on FIN was extended to include ISO 15022 standards and lately the XML based message standards ISO 20022 and FpML (for more information, please refer respectively to www.iso15022.org, www.iso20022.org and www.isda.org). Messages Types of standard ISO 15022 are referred to as MTs and of ISO 20022 are referred to as MXs.

More information on standards for business transactions can be found on www.swift.com/index.cfm?item_id=60395.

Today the network traffic of MT still represents the majority of SWIFT traffic.

BS SWIFT Characteristics

  • Message Types & Standards:  supports the most common message types of ISO 15022 and will also support ISO 20022.

  • Message Archival:  All inbound and outbound messages can be archived before or after transformation and for any period of time.

  • Automatic Message Generation: The system automatically generates

  • Exception Handling: Financial institutions can automatically or manually resolve exceptions and errors and also can view and edit messages that may cause exceptions during processing.

  • File Formats: DOS and RJE File formats are supported

BS SWIFT Supported Message Types

BS SWIFT supports all ISO 15022 messages used in a securities settlement and custody system as follows:

Securities settlement and reconciliation

In terms of business processes, settlement and reconciliation directly follow the trade initiation and confirmation stages of the transaction chain. Once a trade has been confirmed, it must be settled.

The following table present supported settlement and reconciliation SWIFT messages.  

MT Code

MT Name

Description

Direction

Frequency

MT 515

Client Confirmation of Purchase or Sale

Confirm the details of a purchase or sale executed by the executing party on behalf of the instructing party.

IN

MT 540

Receive Free (and Cancellation)

Instructs a receipt of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction

IN

MT 541

Receive Against Payment (and Cancellation)

Instructs a receipt of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction

IN

MT 542

Deliver Free (and Cancellation)

Instructs a delivery of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction

IN

MT 543

Deliver Against Payment (and Cancellation)

Instructs a delivery of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction

IN

MT 540

Receive Free (and Cancellation)

Instructs a receipt of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction

OUT

MT 541

Receive Against Payment (and Cancellation)

Instructs a receipt of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction

OUT

MT 542

Deliver Free (and Cancellation)

Instructs a delivery of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction

OUT

MT 543

Deliver Against Payment (and Cancellation)

Instructs a delivery of financial instruments against payment. It may also be used to request a cancellation or pre-advise an  instruction

OUT

MT 544

Receive Free Confirmation

Confirms a receipt of financial instruments free of payment. It may also be used to cancel or reverse a confirmation

OUT

daily at the end of, or during the day

MT 545

Receive Against Payment Confirmation

Confirms a receipt of financial instruments against payment. It may also be used to cancel or reverse a confirmation

OUT

daily at the end of, or during the day

MT 546

Deliver Free Confirmation

Confirms a delivery of financial instruments free of payment. It may also be used to cancel or reverse a confirmation

OUT

daily at the end of, or during the day

MT 547

Deliver Against Payment Confirmation

Confirms a delivery of financial instruments against payment. It may also be used to cancel or reverse a confirmation

OUT

daily at the end of, or during the day

MT 548

Settlement Status and Processing Advice

Advises the status of a settlement instruction or replies to a cancellation request

IN

during the day

MT 548

Settlement Status and Processing Advice

Advises the status of a settlement instruction or replies to a cancellation request

OUT

during the day

MT 578

Settlement Allegement

Advises the account owner that a counterparty has alleged an instruction against account owner's account at the account servicer

OUT

daily during the importation of trades on local market

MT 549

Request for Settlement/Status Advice

Requests a statement or a status message

IN

MT 535

Statement of Holdings

Reports at a specified time, the quantity and identification of securities and other holdings which the account servicer holds for the account owner

OUT

daily at the end of the day or on demand

monthly  or

yearly

MT 536

Statement of Transactions

Provides details of increases and decreases of holdings which occurred during a specified period

OUT

daily at the end of the day or on demand

monthly  or

yearly

MT 537

Statement of Pending Transaction

Provides details of pending increases and decreases of holdings at a specified time

OUT

daily at the end of the day

Corporate Actions

After the settlement and custody of securities, the major product of a custodian is the management of corporate actions and their effect on customers' safekeeping accounts. In recent years, the processing of corporate actions has become increasingly visible, because of the risks involved and the degree of manual processing required.

SWIFT's corporate action messages are designed to reduce the risks involved, by providing for the:

  • unambiguous reporting of the nature of the event
  • options available to the shareholder, response deadlines
  • specific impact on a safekeeping account

Supported MT messages for the corporate action notifications, instructions and confirmations are presented in the following table.

MT Code

MT Name

Description

Direction

Frequency

MT 564

Corporate Action Announcement

Provides an account owner with details of a corporate action event and the choices available to the account owner. It also provides the account owner with details on the impact a corporate action event will have on a safekeeping or cash account, eg, entitlement calculation

OUT

daily at the end of or during the day

MT 565

Corporate Action Instruction

Instructs the custodian on the investment decision made by an account owner relative to a corporate action event

IN

MT 566

Corporate Action Confirmation

Confirms to the account owner that securities and/or cash have been credited/debited to an account as a result of a corporate action event

OUT

during the day

BS SWIFT Benefits

  • Facilitates Straight-Through Processing (STP) and reduces human intervention along the transaction lifecycle. Thus, improves operational efficiency and risk management and thereby lowering transaction costs, improving the quality of data and putting in place fully auditable business processes.

  • Enables incorporation of industry best practices and standards following recommendations from organizations such as the Securities Market Practice Group, ISO 15022 and ISO 20022.

  • Maximizes return on investment by leveraging an infrastructure that is reusable and flexible enough to cover initial and evolving needs.

  • Increases execution speed of SWIFT based transactions.