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.
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MT Code
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MT Name
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Description
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Direction
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Frequency
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MT 515
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Client Confirmation of Purchase or Sale
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Confirm the details of a purchase or sale executed by the executing party on behalf of the instructing party.
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IN
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|
|
|
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MT 540
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Receive Free (and Cancellation)
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Instructs a receipt of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction
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IN
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|
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MT 541
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Receive Against Payment (and Cancellation)
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Instructs a receipt of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction
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IN
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|
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MT 542
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Deliver Free (and Cancellation)
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Instructs a delivery of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction
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IN
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|
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MT 543
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Deliver Against Payment (and Cancellation)
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Instructs a delivery of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction
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IN
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|
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MT 540
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Receive Free (and Cancellation)
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Instructs a receipt of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction
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OUT
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|
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MT 541
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Receive Against Payment (and Cancellation)
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Instructs a receipt of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction
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OUT
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|
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MT 542
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Deliver Free (and Cancellation)
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Instructs a delivery of financial instruments free of payment. It may also be used to request a cancellation or pre-advise an instruction
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OUT
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|
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MT 543
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Deliver Against Payment (and Cancellation)
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Instructs a delivery of financial instruments against payment. It may also be used to request a cancellation or pre-advise an instruction
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OUT
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MT 544
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Receive Free Confirmation
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Confirms a receipt of financial instruments free of payment. It may also be used to cancel or reverse a confirmation
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OUT
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daily at the end of, or during the day
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MT 545
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Receive Against Payment Confirmation
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Confirms a receipt of financial instruments against payment. It may also be used to cancel or reverse a confirmation
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OUT
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daily at the end of, or during the day
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MT 546
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Deliver Free Confirmation
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Confirms a delivery of financial instruments free of payment. It may also be used to cancel or reverse a confirmation
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OUT
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daily at the end of, or during the day
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MT 547
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Deliver Against Payment Confirmation
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Confirms a delivery of financial instruments against payment. It may also be used to cancel or reverse a confirmation
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OUT
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daily at the end of, or during the day
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|
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MT 548
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Settlement Status and Processing Advice
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Advises the status of a settlement instruction or replies to a cancellation request
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IN
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during the day
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MT 548
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Settlement Status and Processing Advice
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Advises the status of a settlement instruction or replies to a cancellation request
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OUT
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during the day
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MT 578
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Settlement Allegement
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Advises the account owner that a counterparty has alleged an instruction against account owner's account at the account servicer
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OUT
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daily during the importation of trades on local market
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MT 549
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Request for Settlement/Status Advice
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Requests a statement or a status message
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IN
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MT 535
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Statement of Holdings
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Reports at a specified time, the quantity and identification of securities and other holdings which the account servicer holds for the account owner
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OUT
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daily at the end of the day or on demand
monthly or
yearly
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MT 536
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Statement of Transactions
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Provides details of increases and decreases of holdings which occurred during a specified period
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OUT
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daily at the end of the day or on demand
monthly or
yearly
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MT 537
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Statement of Pending Transaction
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Provides details of pending increases and decreases of holdings at a specified time
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OUT
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daily at the end of the day
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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.
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MT Code
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MT Name
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Description
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Direction
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Frequency
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MT 564
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Corporate Action Announcement
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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
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OUT
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daily at the end of or during the day
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MT 565
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Corporate Action Instruction
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Instructs the custodian on the investment decision made by an account owner relative to a corporate action event
|
IN
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|
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MT 566
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Corporate Action Confirmation
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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
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during the day
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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.