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					SWIFT for Investment Managers
– End-to-end solutions for asset management and
  funds business processes
Table of contents


Section 1
  03 – 09 Introduction


Section 2
  11 – 19 SWIFT’s value proposition for investment managers


Section 3
  21 – 64 Business areas of an investment manager and SWIFT’s solutions


Section 4
  65 – 70 Initiatives and solutions


Section 5
  71 – 76 Value added services: applications


Section 6
  77 – 79 Standards and industry guidance


Section 7
  81 – 85 Messaging


Section 8
  87 – 100 Connectivity


Section 9
  101 – 105 Service


Section 10
  107 – 109 About SWIFT


Appendix
  111 – 172 A. Details of standardised messaging
  172 – 174 B. What is in it for you? Calculating your business case for SWIFT
  175 – 176 C. Roadmap by Asset class and business function
  177       D. Glossary


Index
  179 – 185
    Asset Class
                            Equities, FI               Forex          Money Markets        Listed derivatives    OTC derivatives       Commodities              Repos            Syndicated Loans          Cash
  Translation cycle

                              Trading             Trade Capture                                 Trading
                                                      New!
  Pre-trade / trade
                           (FIX and FIN) 27                    66                            (FIX and FIN) 27
                                                                                                                  Trade confirms
                                                  Trade confirms      Trade confirms
                         Trade confirms                                                     Trade confirms       Trade notification                                              Credit agreement
                                                 Trade notification, Trade notification,                                              Trade confirms        Trade confirms
                        Trade notification                                                 Trade notification      (FIN+FpML),                                                        (FpML)
                                                    Affirmation         Affirmation
                                           29                    31                   31                    29                   37           36 and 70                    29                     33
  Post-trade / pre-                                                                                                 Affirmation
    settlement
                                                                 Pre-settlement matching
                                                                                                                          29 and 67

                                           Allocation processing as well as confirmation matching, SSI - New!
                                                                                                                          66 and 67
                                                   Settlement
                                                                                               Settlement
     Clearing &             Settlement              & Recon              Settlement                                                     Settlement            Settlement
                                                                                                & Recon
     Settlement              & Recon              CLS 3rd Party           & Recon                                                        & Recon               & Recon
                                                                                              (FIN+FpML)
                                  39 and 42          service    40                    39            39 and 42                                        39                    39

                                                                                                                    Payments
                                                                                                                                                                                                                    50

                                                 Cash Settlement      Cash Settlement
Cash management          Cash Reporting                                                                          Cash Reporting       Cash Reporting       Cash Reporting                              Cash Reporting
                                                 Cash Reporting       Cash Reporting
                                           52                    52                   52                                         52                  52                    52                                       52
                                                                                                                                                                                                         Exception
                                                                                                                                                                                                        Management 55

                         Data distribution                                                 Data distribution
                                           44                                                               44                                                                    Agent notices
  Asset servicing                                                                                                                                                                    (FpML)
                        Corporate Actions                                                  Corporate Actions                                              (Corporate Actions)
  & administration                         45                                                               45                                                             45                     33

                           Proxy voting
                                           47

                                                                                                     Total Portfolio Valuation (TPV) - New!
     Portfolio
   Administration                                                                                                                                                                                             49 and 68

                                                                                                            Collateral Management
                                                                                                                                                                                                                    57

                                                                                                        Collateral Management - New!
    Collateral
   management                                                                                                                                                                                                       68

                                                                                                         Portfolio reconciliation - New!
                                                                                                                                                                                                                    68
                        Securities Financing                                                                                                              Securities Financing
                                New!                                                                                                                              New!
Securities Financing
                                          69                                                                                                                                69
                           Transaction                                                        Transaction          Transaction         Transaction
Regulatory Reporting
                            Reporting 59                                                       Reporting 59         Reporting 59        Reporting 59



  Planned solutions                             The numbers refer to the page number in this binder
  Available solutions
                                                                                                1

                                                                      SWIFT for Investment Managers




Dear investment manager,


You are at the forefront of every securities transaction. Multiple communication flows, many
counterparties, a wide range of asset classes and continuously increasing volumes are
putting a strain on your business environment and increasing operational risk. By using
SWIFT you benefit from secure and resilient electronic messaging, gaining access to a single,
low cost way of communicating with all your counterparties. You also participate in the
creation of industry standards and market practices. Leveraging SWIFT enables you to
automate your processing environment by supporting straight-through processing for
internal and external communication.


Automation with SWIFT enables you to achieve three key benefits:
    Gain competitive advantage
    Improve risk control
    Improve your bottom line
In the following pages, you will find a description of how these benefits can be realised:
the SWIFT value proposition for your institution. We know that every investment manager
is different, so we will work with you to determine how SWIFT can best help you achieve
these benefits.
This book is designed to let you know why one of SWIFT’s investment manager clients
has said: “SWIFT has really changed the business.”
Please contact us to discuss how your institution can best benefit from SWIFT.


Yours faithfully,
The SWIFT Markets team

If you also manage hedge funds,
a specific value proposition is available
to complement this document.
Section 1 – Introduction




“The scalability we get through SWIFT automation is huge.
 We would not have been able to support our growth and stay
 in this business without it.”
 Investment Manager on SWIFT
                                                                                                 3

                                                                       SWIFT for Investment Managers




1         Executive summary
The SWIFT guide for Investment Managers (IMs) is designed to provide existing and
potential users with an overview of our product and service offering. This guide focuses
on IMs, highlighting their specific business needs and requirements, and offers
suggestions of ways in which IMs can use SWIFT to gain operational efficiencies, improve
STP and reduce risks and costs.


1.1       Investment Manager (IM)
The term ‘IM’ within this guide also applies to asset managers, fund managers, portfolio
managers and hedge funds managers.


1.2       SWIFT
SWIFT is an industry-owned co-operative supplying secure, standardised messaging
services and connectivity to more than 8,700 financial institutions in 209 markets.
Collectively, these institutions, active in payments, securities (equities, fixed income and
derivatives), treasury (foreign exchange, money markets and derivatives) and trade
services markets, exchange millions of messages valued in trillions of dollars every
business day.
SWIFT consistently delivers quantifiable value and proven technical excellence to its users
through its comprehensive messaging standards, the security, reliability and availability of
its messaging platform and its role in advancing STP.


1.3       SWIFT in the investment management market
Over the course of our history, more and more securities institutions have joined SWIFT.
Today, investment managers, broker/dealers, custodians, securities depositories, clearing
organisations, exchanges, central counterparties, matching utilities, electronic trade
confirmation providers, proxy voting service providers, distributors, transfer agents and
fund administrators, rely on SWIFT to reduce the complexity, risk and cost of their
domestic and international transactions. SWIFT facilitates standardised communications
and processing at all levels of the lifecycle:
      for equities, fixed income, OTC and listed derivatives, FX and money markets,
      commodities, repos, syndicated loans and investment funds transactions.
      from trade order through to settlement and asset servicing, including payment,
      portfolio administration and cash management.


SWIFT also facilitates standardised communication for securities financing and collateral
management.
For the purposes of this guide, an investment manager (IM) is defined as an institution
responsible for making decisions to buy, hold or sell financial instruments. IMs include
insurance companies, hedge fund managers and government institutions which also have
this responsibility
 4

SWIFT for Investment Managers




SWIFT’s support for asset management and investment funds processing lifecycles

Payments, Cash Management,
Asset Servicing...


             Collateral        Payments
            Management




          Portfolio                Cash
        Administration           Management




                   Asset Servicing


                                                     Regulatory
                                                      reporting




                                                        Reconciliation


             Account
            Management




        Funds
        processing


Asset Classes covered: equities, fixed income, forex, money markets, cash, listed
derivatives, commodities, OTC derivatives, repos, syndicated loans
Funds covered: investment, money market, hedge funds, alternative funds and pension funds.


SWIFT messages, based on ISO standards, provide enhanced straight-through
processing and risk management in a consistent, coherent and uniform way. New
messages are being designed in XML for use on SWIFTNet, our advanced IP-based
messaging platform. SWIFT’s priority is to drive standards convergence of alternative
messaging protocols, the ISO 20022 business models, and harmonise market practices
to enhance STP at an industry level.
                                                                                             5

                                                                   SWIFT for Investment Managers




1.4       Investment managers’ needs and how SWIFT can help
Introduction
      Gain competitive advantage
      Improve your bottom line
      Mitigate risk
Investment managers are dealing with an expanding range of asset types, a growing
number of counterparties and escalating transaction volumes. They are also carrying an
increased risk and compliance burden. There is a need to deploy innovative investment
strategies to compete – but also to control operational risks and costs, and ensure
scalability, perhaps through operational outsourcing.
SWIFT can help investment managers meet these challenges by providing a single, low
cost way of communicating across all counterparties - including broker/dealers,
custodians and fund distributors - in an automated way, and supporting a large range of
asset classes across the funds, equity, fixed income and alternative spaces. Leveraging
SWIFT’s services enables an investment manager to eliminate costly and error-prone
manual processes and multiple communications protocols, and to increase international
reach.
As new regulation such as MiFID and Basel II impacts operating and investment
practices, SWIFT’s solutions for collateral and risk exposure management and standards
for transaction reporting can help investment managers cope with regulatory and
compliance demands in a cost-effective way.
 6

SWIFT for Investment Managers




“By automating the operations processes, operations staff can
focus on more challenging tasks. Job satisfaction increases and
staff turnover drops.”
Investment Manager on SWIFT



Operational efficiency

Business drivers                High straight through processing (STP) rates are expected, and scalable
                                processing platforms are becoming crucial to support growth.
                                The obligation to reduce costs must also be met.

Market needs                    There is a need to reduce fax and other proprietary communications and to
                                achieve high STP rates. This drives a need for scalable processing platforms
                                to support growth.

How SWIFT can help              SWIFT offers standards for the entire lifecycle of a transaction to eliminate
                                costs associated with supporting multiple formats and connections to clients,
                                service providers and peers across products.



Risk management and compliance

Business drivers                Risk management and compliance have become a critical part of your core
                                business as regulation drives new operating and investment practices.

Market needs                    To cope with a shift of business emphasis towards derivatives products,
                                handle the additional burden of new regulations and reporting requirements,
                                and make management of exposure across asset classes a priority.

How SWIFT can help              By providing a consistent industry solution for collateral and risk exposure
                                management and standards for transaction reporting and regulatory
                                compliance.



New instruments and more counterparts

Business drivers                You are investing more widely in derivatives and exotic financial products. You
                                are also interacting with an ever-more diverse community of counterparts,
                                many of which you have not directly chosen to have business relationships
                                with, but which have been acquired as counterparts as a result of investment
                                mandates you have won.

Market needs                    Your back office needs to become more flexible to handle new, more
                                complex, asset classes. Time to market becomes a critical element in order to
                                ensure you are supporting the competitive needs of your front office.

How SWIFT can help              SWIFT supports a broad range of asset classes across equity, fixed income
                                and alternative investments and provides connectivity to a wide array of
                                counterparties for standardised messaging.
                                                                                                         7

                                                                              SWIFT for Investment Managers




Operational outsourcing

Business drivers          Focus on your specific areas of expertise and reduce your operational costs
                          by outsourcing areas of the business that fall outside your core competencies
                          to specialised providers.

Market needs              Accurate, timely and consistent reporting becomes crucial in order to
                          maximise the benefits of the outsourcing.

How SWIFT can help        We can ensure consistency of communication connectivity and messaging
                          standards to all counterparts. This enables maximum efficiency, reduced risk
                          and optimum timeliness of information.



Data management and reporting requirements

Business drivers          You are required to prove best execution in response to regulation imposing
                          new levels of transparency on the market, so you need a solid strategy for
                          managing the variety of data you handle, including client and counterparty
                          data and market data.

Market needs              To prevent further proliferation of isolated databases and ensure a seamless
                          integration of different data sources as a prerequisite for efficient risk
                          management and operational efficiency. To improve consistency of data.

How SWIFT can help        Standardised messaging ensures the consistency in data management which
                          can readily be provided directly to regulators.
 8

SWIFT for Investment Managers




1.5         The Value of SWIFT to Investment Managers

                                                                 SWIFT’s portfolio allows
                                                                 industry players to
                                                                 automate their business
                                                                 processes and
                                                                 communications, thereby
                                                                 achieving STP. The true
                                                                 benefits of automation and
                                                                 STP to IMs are lower
                                                                 costs and lower risks.
                                                                 Through SWIFT, IMs are
                                                                 able to conduct their
                                                                 business in a value for
                                                                 money, secure,
                                                                 standardised and
                                                                 automated fashion.


      Provide solutions: Whether your business is payments, treasury, trade or securities;
      whether you work for a small local brokerage or a global multi-service bank; SWIFT
      enables you to automate and standardise your transactions end-to-end. Our solutions
      can help lower your costs, mitigate your risk and increase your service levels.
      Refer to section 3
      New initiatives: SWIFT is continuously working with the industry to understand the
      need of its customers and enhance or develop new solutions accordingly.
      Refer to section 4
      Provide applications: Whether provided by SWIFT or a third party, your SWIFT
      connection offers access to a wealth of applications.
      1. Accord – Enabling real-time matching and exception handling for foreign
         exchange, money market and derivative confirmations.
      2. Affirmation application.
      3. Industry applications – Banking Market Infrastructures: In payments, more than 60
         clearing systems, carrying from 500 to over 300,000 payments a day, rely on SWIFT
         for the secure messaging connectivity and common message standards essential to
         their smooth operation. Securities Market Infrastructures: Today, SWIFT is the
         messaging hub for many clearing and settlement systems in payments, securities,
         foreign exchange and derivatives.
         Refer to section 5
      Facilitate standards and market practice: in co-operation with the securities,
      payments and treasury industries, facilitate the development of standards and
      practices used in the aforementioned messaging.
      Refer to section 6
                                                                                           9

                                                                 SWIFT for Investment Managers




Provide messaging: allowing IMs and their counterparties to automate the delivery
and receipt of information required to conduct their business, ranging from equity
trade execution and settlement through to foreign exchange and money movements.
Refer to section 7
Provide connectivity: allowing IMs and their counterparties (e.g. Broker / Dealers,
Custodians, Electronic Trade Confirmation Providers, Banks, (International) Central
Securities Depositories, Transfer Agents, Fund Administrators and others) to
communicate with each other over a single network.
Refer to section 8
Provide services:
Partner programme
As a SWIFT customer, how can you be sure that you are buying a solution from a
third-party supplier that is compliant with SWIFT? How do you choose a company to
help you with your SWIFT-related integration, implementation and training and be
certain that they have the expertise to perform the job? SWIFT’s certification
programmes and partnerships help you to answer these questions.
Business Assessment programme
The Business Assessment Programme provides dedicated teams of experienced
consultants to analyse your business flows or your infrastructure, or both. Their
recommendations help you reduce your total cost of ownership, lower your
operational and reputational risk and identify opportunities for business growth.
Industry initiatives
SWIFT supports the community by contributing to various industry-wide initiatives
that are key to investment managers. These include:
— Giovannini Barriers. In its 2003 report, the Giovannini Group, as advisor to the
  European Commission, published a report identifying 15 barriers to efficient EU
  cross-border clearing and settlement. The Giovannini Group, under the
  chairmanship of Dr. Alberto Giovannini, CEO of Unifortune SGR SpA, stated that
  SWIFT, through the Securities Market Practice Group (SMPG), should define a
  solution to eliminate Barrier 1, which cites national differences in information
  technology and interfaces used by clearing and settlement providers
— MiFID. The Markets in Financial Instruments Directive (MiFID or Directive 2004/39/EC)
   was implemented on 1 November 2007. MiFID gives investment firms an effective
   ‘single passport’, allowing them to operate throughout the EU on the basis of
   authorisation in their home Member State. MiFID’s objective is to remove cross-
   border trading barriers and increase competition, leading to the creation of a single
   market in investment services throughout the EU. MiFID will have an impact on the
   trading of all asset classes including cash equities, fixed income and derivatives.
   The financial institutions that are directly impacted are investment managers (when
   providing portfolio management services – collective investment schemes are out of
   scope), stock exchanges and broker/dealers. SWIFT analysed the impact of MiFID on
   the relevant ISO 15022 and ISO 20022 financial message standards that it supports.
   The resulting changes are now available for use.
Refer to section 9
Section 2 – SWIFT’s value proposition
            for investment managers
                                                                                                     11

                                                                           SWIFT for Investment Managers




2          SWIFT’s value proposition for
           investment managers
Gain competitive advantage
By relieving operational burden, SWIFT allows investment managers to focus on their core
business of performance. Because SWIFT’s solutions for investment managers span
multiple asset classes and provide reach to counterparts globally, SWIFT also enables
investment managers to pursue innovative investment strategies, while effectively
managing risk, in order to maximise gains.

Improve risk control
SWIFT enables investment managers to achieve higher rates of STP directly reducing
operational risk. SWIFT also supports investment managers in improving operational
processes around higher-risk instruments, and in achieving compliance with regulations
i.e. meeting more stringent requirements through improvement of STP.

Improve your bottom line
SWIFT supports investment managers in improving STP. This empowers investment
managers to maximise their profitability by reducing their operational costs.



Gain competitive advantage
Improve operational efficiency
“We started using SWIFT about a year ago. Efficiency-wise it
has been unbelievable. Now we are able to reach about 90%
straight through processing (STP) for outgoing messages.”
Investment manager using SWIFT



Increase automation and STP          SWIFT provides a single communication platform enabling
                                     seamless integration across your front, middle and back-office
                                     systems

+ Reduce risk and cost               Automation via SWIFT leads to a reduction in manual
                                     processing, errors and failed trades. This reduces risk and cost

+ Improve op erational control       Automation enables you to focus on exception processing.
                                     Problems that do arise are identified and can be acted upon
                                     immediately. The result is an improvement in operational control.

                                     A benefit of automation is facilitated management of internal
                                     and external regulatory compliance

= Increased operational efficiency
12

SWIFT for Investment Managers




Gain competitive advantage
Reduce cost and time to market



“Before we had SWIFT, we had proprietary terminals all over
the place. Staff needed to be trained on all the different
systems and data was rekeyed all day long. Now, we simply
have one system.”
Investment manager using SWIFT




Improve scalability                 By automating your business processing environment, through
                                    the use of message standards and a single method of
                                    communication, you will reduce the impact of volatility in
                                    transaction volumes. Automation provides you with a scalable
                                    processing environment.

+ Increase reusab ility             SWIFT messages enable standardisation across all asset
                                    classes, even alternatives.

                                    With SWIFT you can communicate with all your counterparties
                                    (8,500 institutions in 209 markets) SWIFT’s solutions can be
                                    reused as you expand your business focus into new and
                                    different areas.

+ Reduce cost and time              New business expansion is easily undertaken in an automated
                                    environment. This is due to reduced costs and time needed to
                                    bring new business products to market.

= Reduced cost and time to market
                                                                                                 13

                                                                        SWIFT for Investment Managers




Gain competitive advantage
Improve customer service



“If we were to report everything over fax, we would probably
need twice as many people to do this. We have increased our
traffic tenfold without really increasing the headcount.”
Investment manager using SWIFT




Increase service monitoring      An increase in the automation of your processing environment
                                 allows you to focus on exception processing. This provides you
                                 with the opportunity to increase the monitoring of the
                                 transactions you carry out on behalf of your clients. You will be
                                 able to improve your reporting on positions and activity to your
                                 clients.

+ Reduce errors and              An automated environment reduces the risk of manual
                                 processing errors and you will discover errors that do occur
                                 much sooner.

                                 You will be in a better position to provide problem resolution to
                                 customers. Ultimately, the quantity and associated cost of
                                 errors and failed trades will be reduced.

+ Reduce cost and time           With a higher level of service monitoring and a reduction in
                                 errors and failed trades, you will be better able to focus on your
                                 customers’ investment needs.

= Improved customer service
14

SWIFT for Investment Managers




Improve risk control
Reduce processing risks



“Without SWIFT, we would certainly need to double the
number of operations staff and maybe even more.
Fluctuations in the business cycles would cause problems
because we would have to pull in temporary staff. This would
increase the risk and further reduce efficiency.”
Investment manager using SWIFT




Reduce misinterpretation            The use of standards to exchange information ensures that you
                                    talk to your counterparties in one language. This reduces the
                                    potential for misinterpreting information through translation
                                    issues and rekeying errors.

+ Assured communication             By using SWIFT as a communication channel, you are assured
                                    of the identity of the sender of the information as all messages
                                    are authenticated. You are also assured that information you
                                    have sent to your counterparties has been safely received
                                    because delivery is guaranteed.

+ Reduce errors and failed trades   Automating the exchange of information with your
                                    counterparties eliminates the possibility of rekeying errors and
                                    misinterpreting trade details.

                                    This reduces the risk of errors and failed trades

= Reduced processing risks
                                                                                                     15

                                                                            SWIFT for Investment Managers




Improve risk control
Reduce operational uncertainties



“Security and reliability are the cornerstones of SWIFT. They
will always remain SWIFT’s key values”.
SWIFT Board Member




Increase resilience                   With a resilient communication platform, you can conduct your
                                      business in the certainty that you will always be able to
                                      communicate with your counterparties, as and when required.

+ Increase control and compliance     Automation, reach, trust of sender and guaranteed delivery
                                      mean that you are in control of your operational and processing
                                      environments.

+ Assured settlement                  Automating the communication flow with your counterparties
                                      eliminates errors and the risk of misinterpreting transaction
                                      details. You and your clients can be assured of the settlement of
                                      transactions.

= Reduced operational uncertainties
16

SWIFT for Investment Managers




Improve risk control
Reduce capital requirements



“Operational risk is the risk resulting from inadequate or
failed internal processes, people and systems or from external
events.”
Basel II




Increase security and resilience   Conduct your business with certainty that you can
                                   communicate with your counterparties, as and when required.
                                   The SWIFT network is highly secure and trusted, and is used by
                                   major financial institutions in 209 markets around the world.

+ Reduce operational risk          A controlled processing environment with the right level of
                                   security will contribute to reducing your operational risk.

+ Lower reserve requirements       The Basel II framework will impact a significant number of
                                   financial institutions. For those affected, reducing your
                                   operational risk by using the most secure messaging
                                   infrastructure will enable you to lower your capital reserve
                                   requirements when using advanced measurement approaches.

= Reduced capital requirements
                                                                                                  17

                                                                         SWIFT for Investment Managers




Improve your bottom line
Reduce processing costs



 “The SWIFT model allows for better cost control and
financial predictability over competitive networks.”
Investment manager using SWIFT




Increase standardisation         The use of message standards ensures that you talk to your
                                 counterparties in one language. Standardisation is the first
                                 logical step to take if you want to automate communication
                                 flows.

+ Simplify communication         Using standardised electronic communication and a single
                                 communication channel, your flows will be greatly simplified,
                                 leading to efficiency gains and ultimately a reduction in overall
                                 processing costs.

+ Increase automation            Increased automation allows you to focus on exception
                                 processing, and ultimately, spend more time servicing your
                                 customers.

= Reduced processing costs
18

SWIFT for Investment Managers




Improve your bottom line
Reduce the cost of change



“Our transaction volumes can vary significantly from one day
to the next. However, the effort involved in generating our
SWIFT based settlement instructions sent to custodians is
very limited, given the high levels of automation we have
achieved in this area. ”
Investment manager using SWIFT




Increase standardisation         You can communicate with your counterparties in one
                                 language, using standards that cover the entire business
                                 process chain, including orders, instructions, reporting,
                                 corporate events, payments, foreign exchange and treasury.

                                 Standardisation gives you the means to safeguard your
                                 operational efficiency in an ever-changing environment.

+ Increase reusab ility          With one communication platform and one set of message
                                 standards you can talk to all of your counterparties (including
                                 brokers, custodians, exchanges and central securities
                                 depositories). These message standards are suitable for
                                 multiple asset classes including equities, fixed income,
                                 investment funds, money market instruments, foreign exchange,
                                 derivatives and financial payments. This significantly lowers the
                                 cost of making changes to your operational and processing
                                 environments.

+ Increase scalability           With increased business from new or existing clients, your
                                 volumes will increase. An automated processing environment
                                 reduces the impact of an increase in volumes, providing you
                                 with scalability. New business can be easily absorbed into your
                                 existing environment with minimal increase in cost.

= Reduced cost of change
                                                                                                  19

                                                                         SWIFT for Investment Managers




Improve your bottom line
Reduce business expansion cost



“SWIFT is definitely a scalable solution. We could double our
volumes without noticing.”
Investment manager using SWIFT




Increase reach                      SWIFT is used by more than 8,500 financial institutions
                                    (including investment managers, broker/dealers, custodians,
                                    banks, securities depositories, exchanges, fund administrators
                                    and market data providers), in 209 markets. This extensive
                                    reach enables you to communicate with your counterparties in a
                                    secure, low cost and automated way, 24 hours a day, 7 days a
                                    week.

+ Increase reusab ility             You can reduce cost and complexity through automated
                                    communication with multiple counterparties across multiple
                                    asset classes by using one communication platform and one
                                    set of message standards. Reusing your operations and
                                    processing environment significantly lowers the cost of
                                    expanding your business.

+ Increase scalability              Automation provides you with a scalable processing
                                    environment, meaning you can easily absorb new business into
                                    your existing environment. You can focus your attention on what
                                    really matters: growing your business and providing excellent
                                    customer service.

= Reduced business expansion cost
Section 3 – Business areas of an investment
            manager and SWIFT’s solutions




“The cost of SWIFT is insignificant compared to the cost of
 other more manual messaging means.”
 Investment Manager on SWIFT
                                                                                              21

                                                                     SWIFT for Investment Managers




3        Business areas of an investment
         manager and SWIFT’s solutions
3.1      Overview
IMs are typically involved from the very beginning of the traditional equities and fixed
income transaction lifecycle (e.g. trading), through to settlement and custody related
processes. Many of an IM’s securities related business processes lead them to be
involved in payment, foreign exchange, money market and derivative related functions.
Additionally, IMs can also be involved in all aspects of investment funds distribution.
Within this section the applicable SWIFT solutions for each business area are indicated in
the SWIFT Solutions per business activity diagrams. The intention is to simply highlight
what SWIFT solutions are available. This section also highlights (where applicable) the
typical spaces (e.g. pre-trade / trade), players involved and flows between players for
each of the business areas.




                                                         Insurance
22

SWIFT for Investment Managers




3.2         SWIFT solutions per business activities
Within the investment management industry, there are nine main business activities
covering pre-trade / trade to asset servicing, reporting and cash management. This
chapter will provide a high level description of the SWIFT solutions per business activity:




      Pre-Trade /           Post-Trade /           Clearing and           Securities     Asset
         Trade             Pre-settlement           settlement            reporting     servicing




                           Payments and                                   Financing:
        Portfolio                                    Collateral            securities   Regulatory
      administration           cash                 Management
                           management                                    lending and     reporting
                                                                          borrowing




                                              Pre-Trade /Trade


                        IOI / Quotes                Trade          Trade execution,
                                                                    Pre-allocation

                          FIN, FIX                FIN, FIX              FIN, FIX

                       Equities, Fixed         Equities, Fixed       Equities, Fixed
                       Income, Listed          Income, Listed        Income, Listed
                         derivatives             derivatives           derivatives




                                          Post-Trade Pre-settement


                       Trade Allocation       Trade affirmation,      Transaction
                                                 confirmation,         reporting
                                               notification and
                                                  matching

                           FIN, FIX            FIN, FIX, FpML        FIN, FIX, FpML

                                Equities, Fixed Income, Listed derivatives FX,
                                              MM and FX options
                                              Syndicated Loans
                                                 Commodities
                                               OTC Derivatives
                                                                                     23

                                                            SWIFT for Investment Managers




                     Clearing and settlement


  Settlement instructions             Settlement confirmation

             FIN                               FIN

  Equities, Fixed income,             Equities, Fixed income,
    Listed derivatives                  Listed derivatives




                       Securities reporting


 Statements of            Statements of        Statements of
    holdings                 pending            movements
                           settlements

       FIN                     FIN                   FIN

 Equities, Fixed         Equities, Fixed       Equities, Fixed
 income, Listed          income, Listed        income, Listed
   derivatives             derivatives           derivatives




                         Asset servicing


 Data Distribution      Corporate Actions        Proxy Voting

       FIN                      FIN                  XML

  Equities, Fixed         Equities, Fixed       Equities, Fixed
  Income, Listed          Income, Listed        Income, Listed
    derivatives             derivatives           derivatives




                       Cash management


Payments initiation       Cash reporting       Exceptions and
                                                investigation

    FIN, XML                FIN, FpML                XML

      Cash                     Cash                  Cash
24

SWIFT for Investment Managers




                                              Collateral management


                            Margin Calls              Response             Administration

                                              Bi-lateral and Third party

                                  FIN                    FIN                     FIN

                         OTC Derivatives,        OTC Derivatives,      OTC Derivatives,
                         Repos, Securities       Repos, Securities     Repos, Securities
                           Lending and             Lending and           Lending and
                         Exchange margin         Exchange margin       Exchange margin
                           agreements              agreements            agreements




                                               Regulatory reporting

                                Transaction report               Transaction report
                                    and status                 cancellation and status
                                        XML                                XML
                            Equities, Fixed income,             Equities, Fixed income,
                                Listed and OTC                      Listed and OTC
                           derivatives, commodities            derivatives, commodities
                                                                                             25

                                                                    SWIFT for Investment Managers




3.3       Asset Management
The current SWIFT offering per transaction cycle and asset class:




                                       Institutional
                                        Investors/
                                          Funds
              Regulators                                            Investment
                                                                     Manager




                                            1
                                                       2
                                  8



      Banks                   7        Investment                                 Broker/
                                                           3
                                        Manager                                   Dealer


                                  6                    4

                                             5




             Data                                                      Custodian
          Distributors


                                        Securities
                                          Market
                                      Infrastructure
26

SWIFT for Investment Managers




SWIFT offers different solutions depending on the asset class and the business function
following the end to end transaction lifecycle. Investment managers can phase the
implementation of these solutions by focusing on one specific area, depending on their
business requirements and priorities.


Transaction cycle Flow details                 Pairs        Protocol    Asset Class               Page
Pre-trade / trade    Trade                     1,2,3        FIN, FIX    Equities Fixed Income,    Page 27
                     Trade execution                                    Listed derivatives

Post-trade / pre-    Trade affirmation         1, 2, 3, 4   FIN, FIX    Equities Fixed Income,    Page 29
settlement           Trade confirmation        1, 2, 3, 4               Listed derivatives
                     Trade notification
                     Trade matching            1, 2, 3, 4   FIN, FIX    options                   Page 31
                                               1, 2, 3, 4   FIN, FIX    Syndicated Loans          Page 33
                                               1, 2, 3, 4   FIN, FIX    Commodities               Page 36
                                               1, 2, 3, 4   FIN, FpML   OTC Derivatives           Page 37
Clearing             Settlement processing     5, 6         FIN         Equities, Fixed Income,   Page 39
& Settlement                                                            Listed derivatives
                     SWIFT CLS Third Party     Not          FIN         Equities, Fixed Income,   Page 40
                     Service                   applicable               Listed derivatives

Securities           Statements of holdings,   5, 6         FIN         Equities Fixed Income,    Page 42
reporting            pending settlement                                 Listed derivatives
                     instructions
                     and movements

Asset servicing      Data Distribution         6            FIN         Equities Fixed Income,    Page 44
& administration                                                        Listed derivatives
                     Corporate actions         4            FIN         Equities Fixed Income,    Page 45
                                                                        Listed derivatives
                     Proxy Voting              4            XML         Equities Fixed Income,    Page 47
                                                                        Listed derivatives

Portfolio            Collateral and exposure   4            FIN         Equities Fixed Income,    Page 49
Administration       statement                                          Listed derivatives

Payments             Payment Initiation        4,7          FIN, XML    Cash                      Page 50
and Cash             Cash reporting            4,7          XML         Cash                      Page 52
management           Exception management      4,7          XML         Cash                      Page 55
Collateral           Collateral management     4,7          FIN                                   Page 57
management

Regulatory                                     8            XML         Equities Fixed Income,     Page 59
rep orting                                                              Listed and OTC derivatives



SWIFT is also working on initiatives and solutions. Please refer to section 4:
initiatives and solutions
                                                                                                 27

                                                                        SWIFT for Investment Managers




3.3.1     Pre-Trade/Trade: Equities, Fixed Income, Listed derivatives
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Broker / Dealer) to instruct a buy or sale of a security, to provide the status of the
trade, and to advise the execution of a trade between the two parties


FIN messaging


                                   Order to buy or sell - MT 502

                                      Trade status - MT 509

 Investment                     Client advice of execution - MT 513                    Broker /
  Manager                                                                               Dealer


FIX (4.4 and beyond)


                                       Indication of Interest

                                          Quote request

                                       Quote from sell-side

                                  New order (single or multi-leg)

 Investment                              Execution report                              Broker /
  Manager                                                                               Dealer



Asset classes: Equities and Fixed Income, Listed derivatives


Industry challenges
FIX is the de facto standard for trading in most countries. However, in emerging markets
and some European countries, FIX has not yet been adopted. This is leading to a growing
demand for translation engines to map the MT 502 to a FIX Order.
Investment firms which execute transactions in any financial instruments admitted to
trading on an EU/EEA regulated market must report details of their trade to a recognised
reporting venue, (Chi-X, Boat, EuroNext Paris, Deutsche Borse, OMX, LSE). This needs
to be done as close to real time as possible
28

SWIFT for Investment Managers




Solution
FIN messages
or
"FIX over SWIFT" service: Order Management System (OMS) / FIX Engine with Direct
Connection


                                       FIX over SWIFT

              Customer                                     UL NET
                                                           Operating Centre

                  FIX           VPN       SWIFT                   FIX Hub
                 Engine         box      MV SIPN                  ULLINK




                                              SSL


                FIX over SWIFT architecture



FIX allows users to exchange the full application (business) message set contained in the
versions of the FIX protocol supported on the service. FIX protocol includes multiple
application messages, but the main messages used are those detailed below (some of
which are only available in later versions of FIX).
Although primarily used for equities transactions, with the advent of FIX 4.4, fixed income
trading and trading in other asset classes (e.g. FX, derivatives) is also now supported.
The flows shown in this section represent the main use of each message, and are just
some of the messages available. Full details explaining the use of each message can be
found in the FIX Service Description.

Benefits
Connectivity to the ULLINK FIX Hub is as a VPN type service using Secure Socket Layer
(SSL) protocol for encryption and authentication. This provides a single and secure
communication channel from Trading to Settlement, at a high speed, and offers a channel
for FIX messaging, enabling easy integration with a large community of counterparties,
plus access to leading edge value-add trading services. ULLINK has an existing
community of over 100 trading counterparty institutions that can be accessed via the FIX
over SWIFT service.
The SWIFT network allows you to reach emerging markets and any firm new to FIX can
easily benefit from FIX by using the SWIFT single-window. There are about 165 senders of
MT 502 messages with volumes of 2 million a year relating to Equities and Fixed Income.
                                                                                                      29

                                                                             SWIFT for Investment Managers




3.3.2     Post/Trade, Pre-settlement: Trade confirmation: Equities, Fixed Income,
          Listed derivatives
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Broker / Dealer) or service provider (e.g. electronic trade confirmation provider) to
provide early information about a deal, to instruct the allocation of a block trade, to
confirm the details of a trade, and to affirm the details of a confirmed trade.


FIN

                               Trade allocation instruction - MT 514

                            Confirmation of purchase of sale - MT 515

 Investment                   Trade confirmation affirmation - MT 517                       Broker /
  Manager                                                                                    Dealer



FIX (4.4 and beyond)

                    Instruction to allocate previously sent order across accounts

                           Acknowledge receipt of allocation instruction

                                          Allocation report

 Investment                  Confirm booking of trade at account level                      Broker /
  Manager                                                                                    Dealer
                                  Affirm confirmation of allocation




Asset classes: Equities and Fixed Income, Listed derivatives
Industry challenges
In many markets a paper confirmation is required for legal and regulatory reasons. This
generates much unnecessary manual work and in many cases risk as these faxes are not
processed.
Fixed Income has extremely high levels of issue diversity and - for all but a handful of rate-
based instruments - a lack of liquidity and price continuity. The industry is going through
major changes: a new market structure with the rise of electronic venues leading to
fragmentation of liquidity; the shift from passive to active management; a proliferation of
information and services; and a trend towards use of credit instruments and more
complicated instrument types.
Trading volumes continue to grow across all asset classes as electronic trading spreads
across the world, and as increasing numbers of hedge funds appear. However, the
middle office that processes these trades remains stuck with the use of legacy and
30

SWIFT for Investment Managers




manual resources. Consultancy TABB Group in September 2007 reported that: "Some of
the largest asset managers are now spending over $170 million per year on trade
processing costs alone, based on as many as 40,000+ allocations a day.” A middle office
has the choice of using a central utility or of moving to an industry standard such as FIX,
or continuing with non-STP processes such as proprietary protocols or fax.
Solution
The MT 515 is the first step in the settlement process, and is a widely supported
message with more than 2,200 receivers, growing in adoption from 1,500 users in 2005.
The entire SWIFT community is capable of receiving an MT 515.
An MT 515 informs Investment Managers of broker settlement details, ensures the
Settlement Instruction is correct and is a legally binding confirmation in many markets. It
is also the point of inter-operability between FIX and SWIFT ISO messaging - a FIX
Execution message can map into an MT 515. In the future there is the potential to
combine the SWIFT network, the ULLINK FIX Hub and SWIFT's Accord central matching
solution.
When the block trade is executed to the satisfaction of the Instructing Party, the
Instructing Party instructs the Executing Party about how the block is to be allocated
among the different funds or clients (MT 514 for Equities and Fixed Income).
The FIX over SWIFT service enables the SWIFT infrastructure to be used for FIX allocation
messages. This service will become an STP conduit into future extensions of Accord that
could support processing of these messages.

Benefits
Using standardised electronic messages ensures correct processing and reduces the risk
of settlement failure. Using fax creates the risk that an investment manager can claim they
never received the confirmation, and refuse a trade. SWIFT provides interoperability
between different syntaxes like proprietary, ISO standards and FIX. Emerging markets can
introduce a SWIFT infrastructure in phases starting with FIX and progressing through the
transaction lifecycle to clearing and settlement.
SWIFT’s strategic partnership with ULLINK gives customers the benefit of leading edge
FIX-based trading services for Best Execution and Algorithms, and access to a
community of more than 100 investing entities.
                                                                                                      31

                                                                             SWIFT for Investment Managers




3.3.3     Post/Trade, Pre-settlement: Trade confirmation: FX, MM and FX options
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Broker / Dealer) to confirm a treasury trade between the two parties


Forex

                           Foreign Exchange Confirmation - MT 300*

                     Forex / Currency Option Allocation Instruction - MT 303

                                                                                            Broker /
                                                                                             Dealer
 Investment            Advice / Instruction of a Third Party Deal - MT 304
  Manager
                               Foreign Exchange Order - MT 380

                        Foreign Exchange Order confirmation - MT 381
                                                                                            Custodian




Money markets: Loan Deposit, Call / Notice


                         Confirm / notify details of a contract - MT 320

                       Call / Notice Loan / Deposit Confirmation - MT 330
                                                                                            Broker /
                      Advice of Loan / Deposit Interest Payment - MT 350
                                                                                             Dealer
 Investment
  Manager
                   Instruction to Settle a Third Party Loan / Deposit - MT 321

                                                                                            Custodian



Forex Options

                        Foreign Currency Option Confirmation - MT 305

                     Forex / Currency Option Allocation Instruction - MT 303

 Investment             Foreign Currency Option Confirmation - MT 306                       Broker /
  Manager                                                                                    Dealer



For the coverage of SWIFT’s matching and affirmations applications, please refer
to the section: Applications
32

SWIFT for Investment Managers




Industry challenges
Turnover in traditional foreign exchange instruments increased by an unprecedented 71%
to $3.2 trillion in 2006/7 (This compares with $1.2 trillion in 2004 and $575 billion in 2001).
All Treasury asset classes such as FX, FX options, Deposits, "call money", FRAs (resets
for FRA), Interest Rate Swaps (single and cross currency) and Exotic FX Options need to
be matched. Time pressure plus volumes of confirmations require automated solutions.
Despite CLS, over 50% of Treasury trades are still exposed to some degree of settlement
risk. The impact of mistakes can be considerable.
The industry has become a highly competitive market with shrinking margins. There is a
lack of cross-product standardisation and the high diversity of communication means with
the buy- side negatively impacts scalability and profitability. The lack of a uniform solution
for the give-up, confirmation and allocation processes makes manual interventions still a
reality. Many financial institutions confirm their treasury trades by voice or fax, or even
worse, not at all. This introduces significant operational risk and leads to increased costs
because of manual interventions and operational inefficiencies.
Solution
The Treasury messages are specifically aimed at IMs, allowing them to instruct and
confirm FX deals with Broker / Dealers and Custodians.
Additionally, the MT 300 and the MT 304 messages can be used to confirm and advise
FX trades requiring settlement through CLS (Continuous Linked Settlement (CLS™) Bank)
(see settlement section).
SWIFT has a range of MT messages supporting trade confirmations for FX (MT 300, 305,
306), and fixed term Loan/Deposit contracts (MT 320, 330). Accord (SWIFT’s matching
application) can match all of the above message types. Accord processed about
212Million MT 300 messages in 2008.
SWIFT also has an Affirmations application allowing the affirmation/confirmation of FX
trades with your broker even if they do not support MT 3xx messaging.

Benefits
The combination of standardised messaging and the Accord matching system increase
automation (STP) to reduce operational costs and risk. Meet audit and regulatory
requirements in regards to process control.
     Total outsourcing of matching process to SWIFT
     Matching result guaranteed identical between two users.
     Ultra-reliable, in terms of matching results and uptime of service.
     R&L policy: matching results are guaranteed, with financial backing
     Low Total Cost of Ownership through high operator efficiency, and eliminated internal
     operational tasks.
     Specialised system: Integrates broker-to- broker with IM-to-broker
     Broadest range of Treasury instruments of any matching engine
     Third Party CLS Service: automates routing to CLS Settlement Members
     Rich, efficient and easy to use interface, making it easy to find exceptions
                                                                                         33

                                                                SWIFT for Investment Managers




3.3.4    Post Trade/Pre-settlement: Syndicated Loans

Release 1.0 (FpML 4.4)

                                  Drawdown Notice

                               Interest Payment Notice

 Investment                  Principal Repayment Notice
   Manager
      or                    On-Going Fee Payment Notice                   Loan Agent
    Market
Infrastructure               One-Off Fee payment Notice
(DTCC/EOC)



Release 2.0 (FpML 4.5)


                                   Rollover Notice

                           Letter of Credit Issuance Notice

                           Letter of Credit Balance Notice

 Investment               Letter of Credit Amendment Notice               Loan Agent
   Manager
      or                  Letter of Credit Termination Notice
    Market
Infrastructure                  Pricing Change Notice
(DTCC/EOC)
34

SWIFT for Investment Managers




Industry challenges
Today, the loan maintenance process is essentially manual and information is faxed
among market participants, and often followed up with phone call confirmations. This
results in millions of faxes going out into the market each month end/quarter end. Add to
this the exponential growth in loan trading volume in the secondary market and agent
banks find themselves swamped in recordkeeping requirements. All these factors lead to
manual errors, backlogs of unsettled trades and cash breaks to primary and secondary
investors.
Current market pain points
— Electronic agent messaging
— Standard reference data
— Central loan reconciliation
— Automated confirmation, closing and settlement
— Sharing of key information
Solution
SWIFT’s solution for Loans facilitates secure electronic communication for the exchange
of FpML messages. The FpML messages have been created specifically for the loans
market, with a primary focus on agent notices. The intention is to leverage SWIFT’s
services and enable the market to benefit from SWIFT’s experience in FpML. SWIFT’s
Loans solution is complementary to offerings from both Depository Trust & Clearing
Corporation (DTCC) and Euroclear in the loans market. FpML messages (XML syntax) are
transported over SWIFTNet using InterAct store and forward messaging service.




                                Custodian Fund                                     Lenders
                                Administrator                                      SWIFT
                                                                                   member




                                                                                   Lenders
                                                                                   Mail

                                EOC and
                                DTCC

Loan                                                                               Lenders
Agent                                                                              Alliance Lite




                                EOC/DTCC                                           Lenders
                                webportal                      Service
                                                               Bureau


        The Loans Closed User Group (CUG)
                                                                                               35

                                                                      SWIFT for Investment Managers




The first release, Loans 1.0 based on FpML 4.4, enables transport of agent notices
between the agent banks and the lenders. The second release, based on FpML 4.5 and
planned for March 2009, will include credit agreements, adjustments and rollover events.
SWIFT will only implement FpML final recommendation/standards.

Benefits
    Removal of dependencies on the exchange of manual (paper, email and facsimile)
    notifications between market participants; reducing operational risk and providing a
    scalable solution for the loans market globally
    Leveraging your current SWIFT investments and benefiting from SWIFT’s experience
    in FpML
    Managed implementation to assure smooth adaptation to new processes and
    message types
    Solid foundation for full, end-to-end automation of the loans market
    Reduced operating cost, error rates; improved business processes
    Industry scalability; well-positioned for continued product innovation
    Service strategy/definition in close collaboration with industry and CUG participants
    Delivery notification providing receipt of message by counterparty

Future offering: FpML
SWIFT is currently working with FpML to explore the development of standardised
messaging for physical and non physical securities. (See section 4 on initiatives and
solutions )
36

SWIFT for Investment Managers




3.3.5     Post/Trade, Pre-settlement: Trade confirmation: Commodities
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Broker / Dealer) to confirm a trade between the two parties.
Current offering (mainly for precious metals and base metals)

                                  Precious Metal Trade Confirmation – MT 600

                                 Precious Metal Option Confirmation – MT 601

                                Metal Fixed Loan/Deposit Confirmation – MT 620
                                                                                          Broker /
                                    Statement of Metal Contract – MT 609                   Dealer

                      Metal Transfer/Delivery Order – MT 604 (When IM is Metal Seller)

  Investment             Metal Notice to Receive – MT 605 (When IM is Metal Buyer)
   Manager
                            Metal Debit Advice – MT 606 (When IM is Metal Seller)

                           Metal Credit Advice – MT 607 (When IM is Metal Buyer)

              Statement of Metal Account – MT 608 (When IM is Metal Buyer or Metal Seller) Custodian




Industry challenges
The relative lack of automation in commodities markets compared to financial securities
also poses operational issues for the buy-side. There is little automation in this market
and the market is growing fast.
Many financial institutions confirm their commodity trades by voice or fax, or even worse,
not at all. This introduces significant operational risk and leads to increased costs
because of manual interventions and operational inefficiencies.
Solution
SWIFT has a range of MT messages supporting commodities (MT 600, 601, 620, 609) to
confirm the trade with the Broker / Dealer. The MT 604, 605, 606, 607 and 608 are used
with the custodian to order, notice or advise.
SWIFT's reach in the securities industry with 400+ brokers and 500+ investment
managers and securities infrastructures (e.g. CME) and location in over 200 countries.
The range of MT messages supporting commodities are validated by SWIFT and some of
them are to be matched by Accord in the future. SWIFT could act as carrier, validation
and confirmation service for commodities (precious, base and liquid commodities).

Benefits
     Increase automation (STP) to reduce operational costs and risk.
     Meet audit and regulatory requirements in regards to process control.
     Low Total Cost of Ownership through high operator efficiency, and eliminated internal
     operational tasks.
     Become scalable and absorb peaks
                                                                                                      37

                                                                             SWIFT for Investment Managers




3.3.6   Post/Trade, Pre-settlement: OTC Derivatives


FIN messaging (IRS: Interest Rate Swaps)


                        Forward Rate Agreement Confirmation - MT 340

                  Forward Rate Agreement Settlement Confirmation - MT 341




                Single Currency Interest Rate Derivative Confirmation - MT 360
 Investment                                                                              Broker /
  Manager         Cross Currency Interest Rate Swap Confirmation - MT 361                 Dealer

                       Interest Rate Reset / Advice of Payment - MT 362

                      Single Currency Interest Rate Derivative Termination

                             / Recouponing Confirmation - MT 364



FpML (any instrument recognised by ISDA: CDS, IRS, TRS)

                                  Request Trade Confirmation

                                   Modify Trade Confirmation

                                   Cancel Trade Confirmation
                                                                                            Broker /
                                                                                             Dealer

                            Contract Created + Contract Cancelled

 Investment            Contract Novated + Contract Novated Cancelled
  Manager
                      Contract Increased + Contract Increased Cancelled

              Contract Partial Termination + Contract Partial Termination Cancelled

                Contract Full Termination + Contract Full Termination Cancelled             Custodian
38

SWIFT for Investment Managers




Industry Challenges
The recent explosive growth in the OTC industry has exposed, but also created,
numerous areas of processing inefficiency that increase risk and raise the cost of back-
office support. To help the financial community respond to the challenge, SWIFT and the
International Swaps and Derivatives Association (ISDA) entered into an agreement in June
2006 to support FpML messaging services over SWIFTNet.
FpML is the established syntax in this market space. It is widely recognised and
promoted within the ISDA community as the standard of choice for communicating
electronic information related to OTC derivative transactions.
Many institutions within the ISDA community have implemented FpML internally. The two
organisations agreed to create a solution called FpML to transport FpML messages using
the SWIFTNet infrastructure.
Transporting FpML over SWIFTNet is the first step in a phased approach that will include
Matching of FpML in Accord. This will eventually lead to the matching of FpML
confirmations on Accord.
Solution
1. FIN mainly used for interest rate swaps.
2. FpML facilitates the exchange of FpML messages for OTC derivatives over SWIFTNet.
   The intention is to leverage services to provide a flexible, multi-lateral messaging
   solution for FpML messages.
FpML-compliant messages (XML syntax) are transported over SWIFTNet using the
InterAct store and forward messaging service. The first release, FpML 1.0, enabling
transport of contract notification messages between buy-side and custodians, has been
available for live traffic since October 2007.
The second release, expected in March 2008, will expand the notification messages to
include the cancellation of post-trade events. It also covers the confirmation messages
between trading counterparties and will provide validation of all transported messages.

Benefits
ISDA and SWIFT working together to:
     Enable exchange of FpML messages for OTC derivatives over SWIFTNet
     Encourage adoption of FpML-based messages by all parties
     Increase automation for buy-side, sell-side and asset servicing
     Reduce risk and cost
     Meet regulatory requirements
                                                                                                    39

                                                                           SWIFT for Investment Managers




3.3.7      Clearing and settlement: Securities
Investment Managers use the settlement instruction and pre-advice across products
(Equities, FX, FI, MM...) to communicate trades that they have carried out to custodians.
The custodians can then book the trades to their recordkeeping systems, and settle the
transaction in the marketplace.
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Custodian) or service provider (e.g. electronic trade confirmation provider) to provide
settlement instructions, and confirmations of settlement.


                                 Intra-Position advice - MT 508

                               Intra-Position Instruction - MT 524

                                Receive Free Instruction - MT 540

                          Receive Against Payment Instruction - MT 541

                                Deliver Free Instruction - MT 542

                          Delivery Against Payment Instruction - MT 543

                               Receive Free Confirmation - MT 544
 Investment                                                                               Custodian
  Manager
                         Receive Against Payment Confirmation - MT 545

                               Deliver Free Confirmation - MT 546

                         Deliver Against Payment Confirmation - MT 547

                        Settlement Status and Processing Advice - MT 548

                                Settlement Allegement - MT 578




Industry challenges
Clearing and Settlement has been seen as a necessary cost in the past but as margins
become tighter, it is increasingly being seen as a means to gain competitive advantage.
The Giovannini Group was that group founded in 1996 to advise the European
Commission identified 15 barriers as the source of the inefficiencies in EU clearing and
settlement. SWIFT and SMPG were identified as responsible for the elimination of Barrier
1 to eliminate national differences in information technology and interfaces used by
clearing and settlement providers by implementing an EU wide protocol. A protocol was
published by SWIFT in March 2006. The barrier should be eliminated within 5 years of the
publication of the protocol by SWIFT i.e. by March 2011.
    Timely settlement of trades
    Reconciliation and reporting of positions and holdings
40

SWIFT for Investment Managers




Solution
The SWIFT network offers Giovannini compliant service levels and supports compliant
standards based on ISO 15022 and 20022. The replacement and extended set of
messages currently being developed under ISO 20022 will also be compliant to the
Giovannini protocol. The deadline for compliance across Europe is 2011.
A comprehensive set of messaging standards which allow for automation of the trade
settlement / clearing instruction and confirmation process.

Benefits
Clearing and settlement messaging continues to account for the highest volume of
securities traffic and therefore this is a highly automated area in the trade lifecycle.
These messages are used by more than 4,000 financial institutions worldwide
Most of the clearing houses are connected to the SWIFT network.
3.3.8     Clearing and Settlement: Forex through SWIFT CLS Third Party Service
Solution Overview
Many CLS members currently offer third party services whereby they input and settle
trades on behalf of their third-party customer(s) with CLS Bank. This requires third parties
to communicate their foreign exchange transactions to their CLS settlement members.
CLS members can use this SWIFT solution to obtain a real-time copy of an agreed
subset of confirmation messages sent by their third-party customer. SWIFT provides a
global comprehensive solution to support the communication flow between third parties
(most of whom already use SWIFT) and their CLS members, resulting in the easiest and
most cost-efficient way of settling FX trades on CLS.
The service covers all FX-related instruments supported by CLS: FX transactions
including NDFs and FX Option Premiums including NDOs (FX Option Premiums including
NDOs intended to go live in 2009).

SWIFT CLS Third Party Service User                                                   Counterparty

                           1            MT 300 OR 305

                                        MT 300 OR 305
                                                            2



        6                                                                     CLS THIRD PARTY
                 FIN MT 398 envelope message                                   SERVICE HUB
              (with copy of MT 300 or 305 sent)
                                       MT
                                                      3


                                                  5       TRANSACTION INPUT      NOTIFICATIONS

                     4          MT 304 or GDI                           CLS Bank
 CLS Member
                                                                                              41

                                                                     SWIFT for Investment Managers




As the third party exchanges an MT 300 or 305 (1) with its counterparty, a copy of that
MT 300 or 305 will go to the CLS Third Party Service hub (2). The hub forwards the copy
of the MT 300 or 305 to the CLS member servicing this specific third party using an MT
398 (3). The CLS member submits the information to CLS (4) via Gross Direct Input (GDI)
or MT 304, and then receives the matching status from CLS (5). This model offers a
proven methodology and a straightforward implementation for both the third party and
the CLS member, including Nostro account reporting using FIN messages (6) which are
actively used in the market.
(3) Interact real time alternative is available
Asset Classes covered: FX, NDF (Non-Deliverable Forwards), FX Option Premiums
and NDO (Non-Deliverable Options).
About CLS
CLS is an industry initiative, represented by over 60 shareholders from the world’s largest
financial institutions, to reduce risks associated with cross-currency transactions. CLS
Bank delivers continuous linked settlement services to ensure final and simultaneous
settlement of cross-currency financial transactions. SWIFT provides the network
components to connect CLS Bank with its members and third party CLS users. For CLS
to achieve significant reduction in settlement exposures requires a critical mass of
settlement value. CLS Members need to settle trades between themselves, and also
trades with non-CLS Members (e.g. third parties).
CLS Members can offer services to third parties whereby they input and settle cross-
currency trades on behalf of their third party customer with the CLS Bank. Likewise, third
parties will need to communicate their cross-currency trades to their CLS settlement
Members.
SWIFT provides a comprehensive solution to support this communication flow, using its
existing messaging network.
Operational Information
CLS Members need to communicate with their third parties to provide operational
information (status of the trade within the CLS Bank) and cash reporting (pre-funding and
associated reporting) of trades.
SWIFT provides messaging services for this operational information, including the MT9xx
Cash Management messages, and the Cash Reporting service.
Who is eligible as a third party?
— Financial institutions that are not CLS members
— Any other SWIFT-eligible institution involved in cross-currency trading
— Corporates
Current usage?
This service is currently offered by 24 CLS settlement members to more than 300 active
users. Average volumes are close to 1 million transactions per month.
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3.3.9     Securities reporting
In the equities and fixed income markets, this space covers all activity surrounding the
clearing and settlement of the executed trade. Information is typically exchanged between
an Investment Manager and a custodian. For cross- border trades, Global Custodians
and their local agents (e.g. Local Custodian) are also involved. Additionally, the Custodian
(Global or Local) will exchange instructions and confirmations with the CSD (Central
Securities Depository) in the market where the trade will settle. In place of a local CSD,
the trade could settle in an ICSD (International CSD – e.g. Euroclear, Clearstream).
Securities reconciliation gathers information for reporting on the status of the pending
settlement instruction, movements, and holdings for the specified account, at any given
point or duration in time.

                                       Statement of holdings - MT 535

                                   Report on the account activity - MT 536

                                Statements of pending transactions - MT 537
                                                                                         Custodian
                                Statements of intra position advices - MT 538

                       Request for interim reporting on holdings/transactions - MT 549

  Investment               Report on both the securities and cash activity - MT 575
   Manager


                                    Statements of open orders - MT 576

                                                                                         Broker /
                                                                                          Dealer

Note: Equivalent ISO 20022 messages are under development

Industry challenges
Clearing and Settlement has been seen as a necessary cost in the past but as margins
become tighter, it is increasingly being seen as a means to gain competitive advantage.
The Giovannini Group created in 1996 to advise the European Commission identified 15
barriers as the source of the inefficiencies in EU clearing and settlement. SWIFT and
SMPG were identified as responsible for the elimination of Barrier 1 to eliminate national
differences in information technology and interfaces used by clearing and settlement
providers by implementing an EU wide protocol. A protocol was published by SWIFT in
March 2006. The barrier should be eliminated within 5 years of the publication of the
protocol by SWIFT i.e. by March 2011.
     Timely settlement of trades
     Reconciliation and reporting of positions and holdings
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Solution
The SWIFT network offers Giovannini compliant service levels and supports compliant
standards based on ISO 15022 and 20022. The replacement and extended set of
messages currently being developed under ISO 20022 will also be compliant to the
Giovannini protocol. Deadline for compliance across Europe is 2011.
A comprehensive set of messaging standards which allow for automation of the trade
settlement / clearing instruction and confirmation process.
— ISO15022/20022 message standards
— Message validation, non-repudiation and guarantee of sender
— STP improvement facilitating cost and risk reductions
— Leverage of existing FIN architecture

Benefits
The clearing and settlement messaging continue to have the highest volume of the
securities traffic
Highly automated area in the trade lifecycle
Used by more than 4,000 financial institutions worldwide
STP improvement facilitating cost and risk reductions
Most of the clearing houses are connected to the SWIFT Network
Clearing and Settlement has been seen as a necessary cost in the past but as margins
become tighter, it is increasingly being seen as a means to gain competitive advantage.
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3.3.10 Asset servicing and administration: Data Distribution
SWIFT’s Data Distribution solution combines ISO 15022 securities messaging standards
and SWIFT connectivity to enable you to standardise your communication flows from
market data providers and market infrastructures.


Data Providers and data distribution

Investment Data                   Data
 Manager provider               provider                  Types of information Market
                                                          Infrastructure (Stock exchange) and
                                                          Data providers (such as custodians)
                                  3 external data         can send over SWIFT:
             SWIFTNet             feeds in ISO 15022
                                  send to                 — Corporate action announcements
                                  SWIFT Alliance            in ISO 15022
                                  Gateway
                                                          — Reference data
                                                          — Securities pricing information
                                  Data fed into data      — New issue and prospectus
                                  distribution platform     documents
                                  for automatic           — Shareholders meeting information
                                  scrubbing               — Trade volume information
                                                          — Index data
                                  Scrubbed feed
                                  goes into corporate
                                  actions system


The vital nature of the role played by data providers and the need for accurate and
complete information have given rise to a plethora of connections and feeds going into
firms. The desire to achieve the elusive ‘golden copy’ corporate action announcement
has meant that many institutions take the same information from multiple data providers
to ensure coverage and completeness.
Data Distributors live on SWIFT
     Australian Securities Exchange
     DTCC
     Interactive Data
     London Stock Exchange
     The central Depository (Pte) Ltd (Singapore)
     Telekurs
     Canadian Depository
     Fidelity ActionsXchange
     Globetax Data Services
     WM Datenservice
Industry challenges
Financial institutions are grappling with multiple data sources as they seek to ensure
accuracy and completeness of vital reference and corporate actions data. To create the
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elusive golden copy, firms must take in a range of data sources from data vendors and
market infrastructures (MIs). If there are differences in format between the sources, a
significant data cleansing exercise is required in order to create an accurate and complete
record. This makes manipulating data from proprietary feeds into a standardised format
and ensuring it is correct an expensive undertaking for firms - and the many connections
required generate a large maintenance and system overhead.
Solution
SWIFT’s Data Distribution solution addresses the problems associated with handling
multiple data sources in disparate proprietary formats by enabling data providers and MIs
to distribute market data via SWIFT to other SWIFT customers. Data providers can utilise
SWIFT through a closed user group (CUG). MIs are typically already connected to SWIFT,
and can also use the CUG.
Data providers and MIs distribute ISO 15022 corporate action messages in FileAct or FIN.
Where there is not yet an ISO standard available, such as in the case of reference data,
data providers and MIs can use other industry standards or proprietary formats, ensuring
that customers can still benefit by extracting further value from their existing investment in
SWIFT connectivity.

Benefits
    Feeds received in ISO 15022, enabling STP of corporate action events — Central
    maintenance of data feeds via SWIFT Standards Releases
    Secure, reliable delivery, minimising risk and compliance concerns
    SWIFT Service Description defining mandatory roles and responsibilities
    Enabling flexibility in obtaining feeds from different providers
    Operations managed by existing dedicated SWIFT operational staff
    Manual data normalisation eliminated, creating a scalable processing model
    Faster and simpler resolution of any data issues


3.3.11 Asset servicing and administration: Corporate Actions
These messages are typically sent between a client (e.g. Investment Manager) and a
financial institution (e.g. Custodian) to provide details of corporate actions affecting a
particular account, and instructions on voluntary events.
FIN Messaging

                              Corporate Action Notification - MT 564

                              Corporate Action Instruction - MT 565

                                Corporate Confirmation - MT 566

 Investment           Corporate Action Status & Processing Advice - MT 567           Custodian
  Manager
                               Corporate Action Narrative - MT 568
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Industry challenge
Investment Managers (IMs) are responsible for making the decision on any optional
corporate action announcement, on behalf of their underlying client, who they may or
may not consult. The Investment Manager is likely to have accounts held with a number
of different Custodian Banks, depending on their clients’ own preferred Custodian. The
Banks will provide this information either over SWIFT, or through their own proprietary
Custody workstations/services. The result is that for any particular corporate action
announcement, an Investment Manager has to handle multiple announcements of the
same event, from dozens (or even hundreds) of custodians. This presents a significant
reconciliation and therefore risk, issue.
With respect to corporate actions, the operational risk an asset manager is exposed to
can be characterised by its responsibility to take the appropriate steps pursuant to a
voluntary corporate actions offer in order to maximise the value to the portfolio. There
may be a number of reasons why an investment manager fails to act appropriately with
respect to a corporate action, most stemming from an operational error. Failing to
respond to an election within the timeframe allotted by the custodian will jeopardize the
asset manager’s right to participate in an event.
Forgoing the opportunity to tender shares at a premium to the current market price is a
clear risk. Most errors are a result of a poor reconciliation of the position eligible for a
corporate action, which will lead to bad entitlement calculation and potential market
claims. Other operational errors include failing to pursue a claim for an entitlement on
securities bought before the ex date, calculating the value of different options improperly,
and not updating the accounting system accurately, which leads to a miscalculation of
the net asset value of the portfolio. All of these scenarios expose the asset manager to
financial risk.
Solution
ISO15022 standardised messaging
Market practices

Benefits
     Enables STP for corporate actions between counterparties
     SWIFT estimates that 75% of corporate actions can be automated
     Some corporate actions are too complex and will always require human intervention
     Market Practice is the key to end-to-end automation – all parties playing by the same
     rules
Industry research by Oxera, suggests that misinterpretation of corporate action
information by trading brokers and fund managers have led to costs to the industry
estimated to be in the region of EUR 1.6 billion – EUR 8 billion per year globally. While
figures are not available, the additional risks encountered by intermediaries, such as
custodian banks, are of equivalent proportions, with one error related to one event
capable of generating losses in the millions. An extension of the SWIFT offering, both in
terms of reach and functional coverage, would have the potential to reduce costs
associated with inefficiencies and lack of standardisation by a significant amount.
A saving of 25% just related to the trading costs outlined above would represent an
industry benefit in the region of EUR 0.4 – EUR 2 billion per annum.
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3.3.12 Asset servicing and administration: Proxy Voting
These messages are typically sent between a client (e.g. Investment Manager) and a
financial institution (e.g. Custodian) to provide details of proxy voting affecting a particular
account, and instructions on voluntary events.
Proxy Voting core activities
1     Notification
                                        INITIATOR
—     Meeting Notification
                                                              1                                  Issuer      Registrar/Transfer agent Issuer agent
—     Meeting Cancellation
                                         1      2     3
—      Meeting Entitlement                                   INFORMATION
Notification                                                 PROVIDER
                                                              1             Stock exchange       CSD          Market data provider   Proxy agency

2     Voting
                                        LOCAL MARKET
—     Meeting Instruction
                                         1      2     3                                        Custodian              CSD            Proxy agency
—     Meeting Instruction
      Cancellation Request
                                        INTERMEDIARY
—     Meeting Instruction Status
                                         1      2      3    Prime broker       Custodian         ICSD        Registrar/Transfer agent Proxy agency


3     Results                           INVESTOR
—     Meeting Vote Execution                                  Broker       Insurance company Pension funds        Hedge funds     Investment manager
—     Confirmation
                                             Proxy Voting flows: core activities
—     Meeting Result Dissemination



Business flows

                                     Meeting announcement or modification meeting

                                     Cancellation of meeting or meeting notification

                                                 Confirmation of entitlement

                                                       Voting instruction

                                             Cancellation of Voting instruction
    Investment                                                                                                               Custodian/
     Manager                                    Status on Voting instruction                                                 Proxy Agent

                                              Confirmation of vote execution

                                                      Results of meeting
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Industry challenges
Investment managers are becoming increasingly aware of their role in corporate
responsibility, not least through the ethical investment process. The customers whose
assets they manage require them to act as a responsible shareholder and hence issue
clear voting instructions. Investment managers need a fast, accurate way to send voting
instructions and to get quick, reliable feedback on the final outcome of the vote.
Investment Managers see increasing commercial advantage in becoming involved in
corporate governance. However, the effort involved can be great hence the existence of
proxy agents who can vote on behalf of the investment manager.
Clients need confirmation that a vote/instruction was accepted at a shareholders'
meeting and also need results, i.e. pass/fail per resolution.
Each year more than 85,000 investor meetings are held, relating to more than USD 100
trillion in global assets. Proxy voting allows investors, through their asset servicers and
agents, to vote in these meetings. But the proxy voting function has been characterised
by non-standard, proprietary processes, with frequent manual intervention. This has
resulted in a process that is laborious, and prone to errors which increase the costs and
risks of proxy voting. Until now, industry processes have failed to provide a standardised
end-to-end audit trail that could prove that a vote was received and processed with every
intermediary, much less that the vote was actually lodged at the meeting.
Solution
SWIFT’s Proxy Voting solution eases the frustration of all participants in the proxy voting
process, by automating proxy voting information flows. Meeting notification, voting,
confirmation and results dissemination messages are defined using ISO 20022 XML-
based standards. The solution enables issuers, investors and all intermediaries in the
proxy voting chain, including custodians, exchanges, central securities depositories
(CSDs) and proxy agencies, to communicate in a fully standardised way, with all the
security and reliability of SWIFTNet. This facilitates straight-through processing for an
activity that has historically been largely manual.
Standards
The eight ISO 20022 proxy voting message standards fully support the communication
needs of core proxy voting activities. These XML messages offer a far more complete
solution in this area than the ISO 15022 corporate action messages that have been
deployed in the past for proxy voting. As compared to these earlier messages, the XML
messages accommodate today’s proxy voting complexity, and cover the complete
lifecycle of messaging required to provide a full audit trail. The ISO 20022 messages also
offer a global standards based alternative to proprietary messages, and are aligned with
the recommended solution to eliminate Giovannini Barrier One
Benefits
Proxy Agencies are committed to SWIFT for intermediary traffic, and communicate to
shareholders' (investors) via proprietary portal or ASP solutions.
Compliance with the requirements of the EU Shareholders' Rights Directive.
The use of direct SWIFT messaging to the sub-custodian or the custodian's nominee can
improve deadlines significantly - these are otherwise compressed by the time needed by
proxy agencies and custodians to manage exceptions and manual processing.
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3.3.13 Portfolio Administration
Investment managers need to provide reliable valuations to their clients. They also need
to exchange collateral with counterparties based on mutually equivalent valuations.
— Third party collateral agents provide valuation services (e.g. Euroclear, DTCC,
Clearstream, BNY, J.P.Morgan).
Collateral and exposure statement - MT 506

                              Collateral and Exposure Statement

                             Statement of collateral and exposure

                       Request cancellation of previously sent statement
  Collateral                                                                            Collateral
                              Re-send previously sent statement
   Taker                                                                                 Giver




                 Copy to third party                      Copy to third party


Portfolio reconciliation is under development, see section 4 on initiatives and
solutions
Industry challenges
Independent portfolio valuation, prominently the pricing of the underlying asset classes, is
one of the major pain-points in the derivatives space.
As experienced during the sub prime crisis, there has been an increased concern about
the reliability of the product pricing and consequently about the correct valuation of the
underlying trades.
Any delay in accessing the pricing source or incorrect valuation of underlying products
can lead to reasonable financial losses as well as reputational loss.
Solution
Valuations can be incorporated in the MT 506 - collateral and exposure statement. The
TPV project (involving custodians, fund administrators and buy-sides) is looking at ISO
20022 messages, and there are also FpML based portfolio reconciliation messages (for
use between trading partners).
Benefits
Accurate and timely valuation and pricing of the underlying transactions and collateral is
essential. Getting daily prices for various CDOs and MBSs. in a standardised and timely
manner will result in correct margin requirements and will positively impact the
downstream process within financial institutions.
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3.3.14 Payments and cash management
3.3.14.1 Payments initiation
During the course of carrying out their securities business, IMs will need to pay away and
receive monies (e.g. with regards to settlement of trades, dividend income, etc.), and
therefore can be both the ordering customer and the beneficiary customer in the diagram
below. Payments are made through the IMs financial institution, either directly through a
Bank, or indirectly through a Custodian. An IM may also be involved in the reconciliation
of cash positions between its own records, and those of its Banks and / or Custodians.


Customer payments

                                         Request for transfer - MT 101

                                    Single customer credit transfer - MT 103
 Investment                                                                                  Financial
  Manager                                                                                   Institution


Financial Institution Transfers

                         Financial Institution Transfer for its Own Account - MT 200

                     Multiple Financial Institution Transfer for its Own Account - MT 201

                                 General Financial Institution Transfer - MT 202

                           Multiple General Financial Institution Transfer - MT 203

 Investment                     Financial Institution Transfer Execution - MT 205            Financial
  Manager                                                                                   Institution
                                Request for Financial Institution Transfer - MT 207

                                           Notice to Receive - MT 210




XML (will be available in the future)

                                              PaymentStatusReport

                                          PaymentCancellationRequest

                                           CustomerPaymentReversal
 Investment                                                                                  Financial
  Manager                                 CustomerDirectDebitInitiation                     Institution
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Industry Challenges
Financial institutions and regulators continue to seek better control of the risks associated
with the explosive growth in the value of trading. Globally, risk managers are being asked
to measure, monitor and reduce exposure.
Solution
A comprehensive set of messaging standards which allow for automation of the trade
settlement / clearing instruction and confirmation process for Deliveries/Receipt against
Payment
Customer Payments: Category 1 messages deal with payments, or information about
payments, in which the ordering party or the beneficiary, or both, are not financial
institutions.
Financial Institution Transfers: Category 2 messages deal with payments, or information
about payments, in which all parties in the transaction are financial institutions.
— ISO 20022 message standards
— Message validation, non-repudiation and guarantee of sender
— STP improvement facilitating cost and risk reductions
— Leverage of existing FIN architecture
New ISO 20022 messages also cover cash payments related to derivatives.
The MT 103 is sent by, or on behalf of, the financial institution of the ordering customer,
directly or through (a) correspondent(s), 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. In order to allow better reconciliation, the MT 103 supports full charges
transparency and structured remittance information and an unambiguous indication of the
interbank amount booked by the Sender/to be booked by the Receiver. The MT 103
gives the Sender the ability to identify in the message the level of service requested, i.e.
what service is expected from the Receiver for a particular payment, e.g. SWIFTPay,
Standard or Priority or any other bilaterally agreed service. The message also allows for
the inclusion of regulatory information in countries where regulatory reporting is
requested.
The MT 202 is sent by or on behalf of the ordering institution directly, or through
correspondent(s), to the financial institution of the beneficiary institution. It is known as
the cover associated with the MT 103


Benefits
The SWIFT network is primarily known for payments and used throughout the financial
industry in over 200 countries. More than 60 clearing systems, some carrying over 300k
payments a day, rely on SWIFT for the secure messaging connectivity and common
message standards essential to their smooth operation. TARGET2 participants use the
full set of messaging services: FIN, FIN Copy, InterAct, FileAct and Browse. They decided
to use the matured and reliable SWIFT messaging services for the communication
between the banking community and the Target2 SSP.
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3.3.14.2 Cash Reporting
Cash management and payment status details are exchanged using the Category 9 FIN
messages or XML cash management messages. These messages are exchanged
between financial institutions, either on behalf of themselves, other financial institutions, or
customers.


Intra Day, FIN

                                  Notification of debit to account - MT 900

                                 Notification of credit to account - MT 910

                                         Balance Report - MT 941
     Account                                                                        Account
      Owner                         Interim Transaction Report - MT 942             Servicer



Intra Day, XML

                                            Get/Return Account

                                          Get/Return Transaction

     Account                         BankToCustomer Account Report                  Account
      Owner                                                                         Servicer



End of day, FIN

                                 Customer Statement Message - MT 940

                         Statement of detailed entries booked to account - MT 950
  Account                                                                           Account
   Owner                                                                            Servicer


End of day, XML

                                       BankToCustomerStatement

                                     BankToCustomerAccountReport
  Account                                                                           Account
   Owner                                                                            Servicer
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Industry challenges
The need for standardised solutions is driven by:
— centralisation of liquidity management and treasury functions
— growing volumes of cross-border payments
— increasing volumes of 'time-payments' (payment versus payment, delivery versus
  payment, real-time gross settlement systems)
— emergence of cross-border real-time payment settlement systems, in addition to
  existing domestic systems
— increasing regulatory pressure on managing credit risk.
Solution
1. FIN messaging: SWIFT has a set of messages for end-of-day and intra-day cash
   statements.
2. Cash Reporting focuses on the need for financial institutions to obtain real-time
   account balance and transaction information from one or more service providers.
Cash Reporting supports the treasury management and intraday reconciliation business
processes.
The granular real-time information provided in the MXs offers the following substantial
benefits:
    Just-in-time transaction management: Customers can control reconciliation
    processes through use of selection criteria. For example, customers can set ranges
    to sort the transactions by type or date.
    Detailed transaction information: Customers can obtain detailed transaction
    information during reconciliation. This information includes transaction number,
    payment amount, and transaction description.
    Transaction tracking: Customers can track high-value and risky transactions.
    Multi-currency support: Customers can reconcile transactions in real-time across all
    currencies and time zones.
Cash Reporting messages provide an industry-wide solution for the exchange of
transactional and balance information between an account owner and its account
servicing institution.

Benefits
Improved monitoring of global cash positions helps prevent accounts from inadvertently
being overdrawn or funds being left in accounts overnight. The customer's ability to
decide earlier in the day whether it must borrow funds, or whether to invest excess cash
results in better intraday liquidity management.
An investment manager can receive true end-to-end information in real-time from its cash
correspondents for transactions and balances. This gives a consolidated and
instantaneous view of all positions in all currencies.
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From an IM’s perspective, the benefits are:
     Liquidity Management – Real-time provision of information relating to incoming and
     outgoing funds enhances the ability of an IM to manage its intraday liquidity position.
     Risk Management – By integrating positions from multiple business areas, across
     multiple currencies, it is possible to present a complete overview of exposure in real-
     time.
     Shorter reconciliation cycles – Improve error detection and resolution processes,
     enabling cost reductions linked to more efficient intraday reconciliation.
     End-to-end standardisation – Improve end-to-end STP through interoperability and
     full automation across the entire life cycle of the payment transaction.
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3.3.14.3 Exceptions and Investigations


                 Case Assignment                                       Case Assignment
        1                                                     2
                                                 Financial                                             Financial                                           Financial
                                                institution                                           institution                                         institution
                                                     B                                                     C                                                   D
            Notification Of Assignment                                                                                      Case Assignment
                                            3                                                                       4

            Notification Of Investigation                         Notification Of Investigation
                                            6                                                     5

            Resolution Of Investigation                           Resolution Of Investigation                           Resolution Of Investigation
                                            9                                                     8                                                   7



Case assignment message
There is one specific 'case assignment' message for each of the four business activities:


                                                       RequestToCancelPayment

                                                       RequestToModifyPayment

 Investment                                                         UnableToApply                                                                Account
  Manager                                                                                                                                        Servicer
                                                                  ClaimNonReceipt



Case management message

                                                     AdditionalPaymentInformation

                                                         ResolutionOfInvestigation

                                                     NotificationOfCaseAssignment

                                                          RejectCaseAssignment

                                                          CancelCaseAssignment

                                                              RequestForDuplicate

                                                                         Duplicate
 Investment                                                                                                                                       Account
  Manager                                            ProprietaryFormatInvestigation                                                               Servicer

                                                      DebitAuthorisationResponse

                                                       DebitAuthorisationRequest

                                                       CaseStatusReportRequest

                                                                  CaseStatusReport
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Industry challenges
The industry still faces a lot of manual payments investigations handling (i.e. payment
cancellation, modification, claim non receipt, unable to process payment). Follow-up is
primarily done over the phone. The widespread use of free format combined with the lack
of industry practice rules are the main blocking factors for further automation.
The long turnaround times and the lack of transparency/control on ongoing investigations
entails operational and financial risk. Moreover, the cost of dealing with enquiries varies
according to the level of automation within each organisation. Their average staff-related
cost per enquiry has fallen by 50 percent.
Solution
The solution is composed of three common components: SWIFT XML Standards,
messaging services and applications.
Exceptions and Investigations allows you to perfectly automate your enquiries process as
it provides you with a very strict business and communication protocol. A clear definition
of the actors, their roles, the communication flows and exchanged messages guarantee
higher STP rates while a clear rulebook endorses industry practice and best usage. The
solution results from the combination of ISO 20022 standards, a market practice
rulebook, our InterAct messaging service and a close partnership with third-party
application vendors.
The message standards cover all automatable enquiries generated either before or after
payment settlement, whether handled in a production, an investigations or a reconciliation
department. They cater for four main types of enquiries:
— Request for cancellation
— Request for modification
— Unable to apply
— Beneficiary claims non-receipt
The Exceptions and Investigations standards provide a strict business protocol. Actors,
roles and communication flows between parties are clearly specified and adhered to,
allowing smooth, predictable and streamlined enquiry management. These four
Exceptions and Investigations enquiries are generically supported by the case
management concept and workflow. In addition, rules such as the unique case ID and
the ‘nobypass’ are applied, thus ensuring straight-through processing of enquiries.
For each type of enquiry, a specific workflow defines the set of messages to be
exchanged between the parties involved in the original payment transaction. A total of 16
SWIFT XML standards messages have been developed to support the four main
exceptions and investigations activities.


Benefits
     Get transparency on your enquiries
     Support central accounting/treasury management
     Reduce your enquiry cost
     Allow better control of payables and receivables
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3.3.14      Collateral Management
These messages are typically sent between a collateral giver and a collateral taker to
provide details of collateral instructions, claims, substitutions of specific securities used as
collateral and reporting statements.
Collateral is required to ensure and to maintain the exposure coverage on OTC Derivative,
Repos, Securities Lending and Exchange margin agreements so that it remains balanced
in line with market fluctuations.
Resulting collateral messaging is conducted
(1) with collateral giver/taker
(2) with Triparty Agents.
Collateral margining and maintenance results in settlement movements for
cash/stock/bonds - covered elsewhere in other SWIFT messaging flows.
Bi-lateral

                                            Margin Calls

                                  Collateral Claim return - MT 503

                                  Claim new/additional - MT 503

                                             Response

                                   Collateral proposal - MT 504

                    Collateral Status and Processing Advice (Response) - MT 507

                                      Collateral administration
  Collateral                                                                              Collateral
   Taker                          Collateral Substitution - MT 505                         Giver

                            Collateral and Exposure Statement - MT 506




                         Copy to third                            Copy to third
                            party                                    party
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Tri-party

                                      Triparty Collateral Instruction – MT 527

                                Triparty Collateral Status and Processing – MT 558

                            Triparty Collateral and Exposure Statement - MT 569
  Collateral                                                                            Tri party
 Taker/Giver                                                                             Agent



                                Copy to third                           Copy to third
                                   party                                   party


Industry challenges
Growth in the number of legal agreements covering OTC Derivatives, Repo, Lending &
Borrowing transactions and exponential growth in the underlying trading portfolio sizes
directly impact the required number of margin movements and coverage activities. This
results in:
a) Operational risk: Lack of standardisation could result in failure to claim/ respond margin
   requirements in a timely manner and at required frequency,
b) Potential loss of trading: Due to short-comings of process management, insufficient
   exposure coverage can lead to blocking of trading lines
c) Regulatory challenges: Operations are for the first time considered in Basel II and FSA
   is looking into the benefits of Collateral Management as credit mitigating factor.
Solution
SWIFT seeks to standardise processes with ISO 15022 messages. Adopting SWIFT
messages can reduce the manual/human error rate, but also frees up FTE effort and time
to focus on exception management. It also can help meet regulatory requirements, and
reduce costs in the face of increased business growth.
The settlement process is covered by the MT 54x.

Benefits
A comprehensive set of messaging standards which allow for automation of the
margining and negotiation process.
— ISO15022 message standards
— Message validation, non-repudiation and guarantee of sender
— STP improvement facilitating cost and risk reductions
— Leverage existing FIN architecture
— Majority of target clients are already SWIFT users: leverage existing product and
  standards familiarity
— Possible extension of ISDA endorsement (based on joint work on FpML)
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3.3.15     Regulatory reporting

         Transaction report and status
                   TransactionReport
                   TransactionReportStatus

                                         Intermediary
                                     (eg, reporting agent)
                                              or
     Reporting institution                                                Regulator
                                       Direct reporting


    Transaction report cancellation and status
                   TransactionReport
                   TransactionReportCancellationRequest
                   TransactionReportCancellationStatus

                                         Intermediary
                                     (eg, reporting agent)

                                              or
     Reporting institution                                                Regulator
                                       Direct reporting

    Transaction reporting messaging suite,
    using the UNIFI (ISO 20022) methodology


Transaction reporting flows
There can be up to three participants in the process - investment firms (reporting entities)
that provide the reports, regulators that receive and analyse the data, and intermediaries
that, in some but not all cases, act as report collectors on behalf of regulators.


As the diagram above indicates, there are three clear spaces in terms of messaging:
— between reporting entities and either intermediaries (such as exchanges) or directly to
  regulators
— between intermediaries and regulators
— inter-regulator report sharing. This is being carried out exclusively on the system
  developed by the Committee of European Securities Regulators (CESR).
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Industry challenges
The picture of transaction reporting in the EU and EEA markets post-MiFID is a
complicated one, with greater reporting obligations to more regulators than was the case
previously. There is no uniform approach from individual market regulators about how
they collect these reports, either in terms of message formats or message channels.
MiFID also permits individual regulators to request additional data fields and to widen the
scope of reporting according to local market practice or requirements.
And this is only the first step. Although the solution meets the transaction reporting
challenge of MiFID, the service is also focused on helping customers satisfy regulatory
reporting requirements in markets worldwide.
Solution
SWIFT’s Transaction Reporting solution enables reporting entities to meet their
transaction reporting obligations, including those for MiFID (Markets in Financial
Instruments Directive). Transaction Reporting combines standardised messaging with a
standard platform, SWIFT’s FileAct store and forward service.


Benefits
Using SWIFT for transaction reporting will provide certainty for firms in terms of security
of delivery as well as consistency of data structuring for their reporting.
— reduced risk from structured data format and security of delivery
— reduced cost from re-use of existing SWIFT connection and non-proprietary data
  standards.
The firm that operates without SWIFT will find the new regulatory requirements costly to
deal with, as it struggles with the inefficiency of non-standard data formats and multiple
connectivity mechanisms.
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3.4        Funds



                                                   End
                                                Investors



                     (I)CSD                                                      Distributors


                                                      1

                                        9                            2




      Banks                     8
                                                                                             Concentrator
                                               Investment                    3
                                                Manager


                                    7                                    4


                                               6
                                                             5
          Transfer                                                                         Trustee
          Agents




                                  Fund                           Sub Advisor
                               Administrator




SWIFT enables fully automated transaction processing and reporting between many
counterparties in the business cycle. The following diagrams illustrate how funds players
can utilise the Funds message set, and highlights the Investment Manager’s potential
involvement with the flow reference number quoted in the diagram above:


Note: It is recognised that an IM can play several of the roles depicted in the above diagram.
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                                Pairs     1       2      3       4        5     6   7    8     9
Transaction cycle
1. Account management                     a      a      a                 a         a

2. Order flows                            a      a      a                           a          a

3. Transfers                                            a                 a     a   a

4. Price report                           a      a      a        a              a

5. Cash forecast                                                          a     a   a

                                          a      a      a        a        a     a   a    a     a
                                          a                      a              a              a
6. Statements
(holdings or transactions)

7. Commissions                                   a      a        a        a

8. FPP (Fund Processing Passport)         a      a      a        a        a

9. Payments                                                                              a

10. Settlement                                          a                                      a

11. Corporate Actions                                                               a          a



3.4.1       Funds flows
Current release



                                          Account Opening Instruction

                                Orders (Subscriptions, Redemptions, Switches)

                                                   Transfers

                                                 Price Report

                                                 Cash forecast

                                    Statements of holdings or transactions

                                                 Commissions
  Investment                                                                            Counterpart
   Manager                              FPP (Funds Processing Passport)

                                                  Payments*

                                                  Settlement*

                                              Corporate Actions*
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Commission management
The functions involved in providing details of commissions (trailer or transaction related) to
fund distributors. These messages are in scope for future release and will become
available in the near future.
Related flows: Payments, settlement and corporate actions
For payments relating to investment funds transactions, the ISO 15022 payment
messages (see Chapter 3.3.14) on FIN can be used.
For settlement, Delivery versus payment style messages have not yet been built in the
Funds product as at publication. This is an area where market evolution will drive their
production. The existing model, which fits the standard operational processes used in the
global investment funds landscape, is to use a subscription or redemption message
which is linked to a specific payment message through the use of reference numbers.
For corporate actions and entitlement events of investment funds, the FIN based MT 56x
ISO 15022 corporate action messages (see chap 3.3.11). Payments, settlement and
Corporate Action messages specifically for investment funds have not been designed in
the new XML syntax.
Industry challenges
As an investment manager you put a great deal of effort into the search for distributors
who are willing to encourage their customers’ to invest into your mutual funds range. In
this fast growing business you are continually creating new products and unlocking new
distribution channels across the globe to satisfy the diversity of investor needs.
The challenge for the industry is to develop an infrastructure which can support the
anticipated growth in business. Already today the resulting order flows are highly manual
(e.g. 50% by fax in Europe, 90% by fax in Asia) and highly expensive. Directly related to
this is a high error risk due to manual re- keying of activity throughout the transaction
chain.
Solution
The Funds business solution enables you to communicate with your counterparties
using open, non-proprietary message standards in XML syntax that comprehensively
cover your flows. These XML based standards are recognised by industry leaders and
market associations as the de-facto investment funds industry market standards and are
part of the ISO 20022 XML standards.

Benefits of the SWIFT solution
Minimise risk, reduce costs
Distributors, fund management companies and transfer agents that have implemented
SWIFT in order to automate their fund distribution processes have reduced their
operational cost of handling orders by 50% to 70%. By automating this also removes the
risks associated with manual errors, lost faxes, or any doubts regarding the origin of an
instruction.
Improve customer service
Automating order capture eliminates errors, allowing information to be transported, stored
and reported in a timely and secure manner. Distributors that have implemented SWIFT
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for order placement have been able to extend sales cut off times in their branches as the
burden of manual handling is removed. Fund management companies and transfer
agents also vastly improve their ability to meet the reporting needs of their distribution
networks.
Achieve scalability
SWIFT’s scalable and robust messaging platform can easily be deployed to support high
volumes and a large number of counterparties. This removes the burden and high cost of
developing and maintaining proprietary solutions for each counterparty. That scalability is
critical in the funds industry where order volumes may spike at particular times in the
year, or more regularly, just before the daily deadline. Automation nullifies the impact of
these spikes.
Access trading partners worldwide
With over 8,400 financial institutions, including the majority of players in the funds
community, SWIFT provides a single window allowing you to connect with your
counterparties directly, or via a concentrator or market infrastructure, using consistent
message standards. Transfer agents, custodian banks, broker- dealers, insurance
companies and fund administrators are just some of the players actively using SWIFT
today. In addition, other distribution channels, such as financial advisors can be reached
directly through closed user groups or indirectly via concentrator platforms such as fund
supermarkets.
Implementing end-to-end automation
SWIFT’s global partnering program now provides access to accredited Enterprise
Application Integration (EAI) providers, business application vendors, integration
specialists and consultants specialising in the investment fund industry. This ensures that
the leading fund accounting, transfer agency, order management systems and EAIs are
SWIFT enabled, facilitating end-to- end straight-through processing across your existing
systems.
Section 4 – Initiatives and solutions
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4                                Initiatives and solutions
SWIFT’s services and products cover a wide range of business processes in the
securities, investment funds, payments and treasury areas of the financial industry.

                                 Transaction cycle           Equities         Fixed         FX, MM        Listed Commodities    OTC      Repos                     Funds
                                                                            Income,                     derivatives          Derivatives

                                 Pre-trade /                                                 Trade                                                              FPP (Funds
                                 trade                                                      capture                                                             Processing
                                                                                              4.2                                                              Passport) 4.11

                                                      FX and securities post trade/pre-settlement: Allocation processing as well as confirmation matching - 4.3 and 4.4
                                                                                                        SSIs - 4.6

                                 Post-trade /                Securities    Securities                    Securities
                                 pre-                           pre-          Pre-                          Pre-
                                 settlement                  settlement    settlement                    settlement
      Light connectivity - 4.1




                                                              matching      matching                      matching
                                                                  4.5          4.5                           4.5

                                 Clearing                                                                               Commodities
                                 & Settlement                                                                              4.10

                                 Portfolio                                                  TPV (Total Portfolio Valuation)
                                 Administration                                                         4.7

                                 Collateral                                       Collateral management and portfolio reconciliation
                                 management                                                             4.8

                                 Financing: lending                                              Securities Financing
                                 and borrowing                                                            4.9



SWIFT is continually working with the securities industry to bring new products and
services to our existing, as well as potentially new, users. The following initiatives are
under way to increase our offering across new instruments and to cover more business
functions throughout the transaction lifecycle:


4.1                              Light connectivity
Alliance Lite is the latest addition to our connectivity products suite. It complements our
well known products in the Alliance family, but is fundamentally different. It is a SWIFT
Internet-based service that provides direct, secure and low cost access to SWIFT
messaging services. New customers do not have to install SWIFT specific connectivity
products at their premises, but can access the Alliance Lite web-service using their
standard Internet connection with a SWIFT-issued hardware security token.
Alliance Lite will support both manual operations through a standard Internet browser
with message data entry and business features, and integration with the back-office
through a lightweight auto-client. It is positioned for low volume customers.
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4.2         Trade capture
As part of its intention to capture trades closer to the source, SWIFT has entered into a
partnership with Bloomberg to jointly provide a front-to-back office multi-asset class
product in full application service provider (ASP) mode.
As part of the agreement, Bloomberg will provide its buy-side clients with direct securities
settlement notification services, direct transfer agent access for mutual funds orders and
FX messaging, all via SWIFT. In addition, any investment manager using Bloomberg’s
OMS will be able to benefit from matching and automatic nostro agents notifications
services straight from the Bloomberg terminal through integration with Accord. The
results of each of the processing steps will be retrieved and monitored on the Bloomberg
terminal.
The service will be rolled out in a series of phases during 2009 and 2010.


4.3         Automating FX Allocations
There is no current standard automated market practice used by investment managers
for communicating the allocation to their counterparties. Executing brokers typically have
to cope with a mixture of faxes, emails, spreadsheets and phone conversations etc, all of
which are manually intensive.
The SWIFT FIN MT 303 is an FX allocation instruction that can be used by the
investment manager to instruct its counterparty of the allocation details for a block FX
deal.
The MT 303 will be routed by the receiving bank to the relevant system, which can be
enhanced to automatically generate the necessary allocated trades and feed them
through to the FX back-office processing environment, thereby providing a straight-
through process for FX allocations.
Through implementation of a standard process using the MT 303 and replacing faxes,
emails and other proprietary communication mechanisms, both the investment
management and broker community can improve efficiency, cut costs and reduce risks.


4.4         FX and securities post-trade/pre-settlement
As part of SWIFT’s post-trade/pre-settlement programme, SWIFT is in the process of
defining a solution to streamline, automate and standardise messaging flows between
brokers and their buy-side clients. The buy-side clients in this context include investment
managers, hedge fund managers and hybrids.
The solution will cover all buy-side to broker flows as well as being cross-asset class
(ie. FX and securities). These will include confirmations (and associated matching as
appropriate), give-up notifications, allocations, payments, statements and custodian
notifications sent by the buy-side to their Brokers. This initiative sits amongst a broader
portfolio of initiatives to improve processing with the buy-side.
Two key components of this solution offering are envisaged to be lighter connectivity for
the buy-side (i.e. “Alliance Lite” supporting relevant message types) and more flexible
commercial models to be supported for both brokers and their buy-side clients.
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4.5      Securities Pre-settlement Matching: Accord
The new Accord Securities Pre-Settlement Matching Solution will be launched in 2009.
It initially supports two different market segments:
1. Prime Brokers
SWIFT is working with six of the world’s major prime brokers to develop and operate a
centralised pre-settlement matching solution. The Accord service will be used to match
details of trades originating from the global hedge fund community. These equities and
fixed income trades are made between a hedge fund and an executing broker.
The hedge fund manager sends the details to the prime broker who inputs them to
Accord to match against the confirmations sent by the counterparty to the trade — the
executing broker. SWIFT and the prime brokers are working together to ensure the wider
community of brokers worldwide takes advantage of the new solution. The executing
broker sends trade and settlement details for each hedge fund allocation in an MT 515
message to Accord to be matched with an MT515 sent by the prime broker. The Accord
solution reduces costs in the industry required to manage the numbers of exceptions,
provides a single solution for the whole community and improves service to the hedge
fund clients.
2. Broker to Broker
The initial release also supports the confirmation matching of over-the-counter (OTC) trades
for fixed income and equities made between the brokers themselves, that are not
automatically cleared by an exchange or trading platform. The solution replaces those trade
confirmations sent by fax, with electronic confirmations that can be automatically matched.
The specification for Accord has taken these needs into account, so that the solution for
prime brokers can also be used for broker-to-broker confirmations, with no impact on
functionality or operations. Any type of institution that wants to confirm their trades
automatically instead of using fax could potentially use this solution e.g. buy-side,
corporates et cetera. Each trading entity can now send trade and settlement details of their
OTC trades in an MT 515 message to Accord to be matched with an MT 515 sent by the
counterparty to the trade. The Accord solution here again reduces costs in the industry
required to manage the numbers of exceptions, reduces reliance on fax confirmations,
removes risk of fraud with electronic confirmations, and opens up the possibility to reduce
the trade cycle period.
These two new securities services establish Accord as a multi-asset class
matching service, and open up many new opportunities for SWIFT’s community
within the securities industry.


4.6      Standing Settlement Instructions (SSI)
In order to progress the standardisation of market practice with regards to SSIs, SWIFT
intends to produce a set of ISO 20022 messages for usage in 2009 to enable market
participants to notify their counterparties of a change in their SSIs in a standardised
manner. These messages will include all asset classes.
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4.7         Total Portfolio Valuation
Industry challenges
Currently, staff spend hours reconciling and recalculating portfolio valuations. Cross time-
zone issues create significant delays. Nobody goes home until the NAV is done; failure is
not an option.
Solution
SWIFT’s Funds service exists and is designed to cater for all funds. The TPV message
has significant use among funds players and effectively consolidates a number of existing
Funds messages.
Messages within the TPV suite of messages will include:
      Request for Statement or Report
      Total Portfolio Valuation Report
      Cancellation of Total Portfolio Valuation Report
      Accounting Statement of Holdings*
      Accounting Statement of Holdings Cancellation*
      Cash Account Management Report*
      Cash Account Management Report Cancellation
      General Ledger Report
      Cancellation of General Ledger Report
* Asterisk denotes that an ISO 20022 message currently exists or is under final review
The official release of this solution is scheduled for Q4 2008.


4.8         Collateral management and portfolio reconciliation
SWIFT continues to follow a separate approach towards bilateral and triparty collateral
management due to the distinct requirements of the underlying products and market
segments.
Next steps:
Triparty Collateral Management
SWIFT’s Standards department is currently working on the reverse engineering of Triparty
messages to ISO 20022. As part of the ongoing EU Securities Harmonisation efforts and
Removal of Giovannini Barrier 1 study, Triparty collateral messages have been identified
as “core” messages to be reverse engineered to ISO 20022.
SWIFT Standards has created the initial version of the Business Validation Document.
This document will be further discussed with the leading triparty agents and involved
parties such as triparty system participants during September 2008. Timelines and
deliverables are still in progress.
Bilateral Collateral Management
The differences in communication methods and the content of information exchange
between margin requirements and dispute resolution has led SWIFT to focus on the
collateral management process and portfolio reconciliation as two distinct projects.
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1. Collateral management process:
Due to the existing solution offering and the strength of the organisation, the market sees
a role for SWIFT in the following areas:
Priority 1: “agree and process call” – This step contains the issuance of the margin calls
to cover different types of exposure and the consecutive negotiation of the margin call
(agreement/disagreement of the call amount, proposal of collateral and settlement
instructions). All these communications are part of the so-called “margin call workflow”
which are typically performed via non-standard email exchanges.
Priority 2: “provide reporting” – This is indicated to be a secondary priority area due to the
lack of content agreement in the market. Although market players indicate the importance
of common reporting standards, there is also a strong trend towards providing flexible
reporting solutions meeting clients’ needs.
Our aim is to leverage the usage of the existing FIN messages as well as investigating the
market appetite for an ISO 20022 based suite of messages.
2. Portfolio reconciliation:
Lack of data standardisation next to the valuation discrepancies is one the main root
causes of portfolio discrepancies. Within this scope, SWIFT has been approached to play
a role as a standards organisation working together with other standards bodies such as
ISDA, for FpML.
As a messaging solution, we will continue to promote MT 506 – Collateral & exposure
statement message – as well as actively participate in FpML portfolio reconciliation
initiatives.


4.9         Securities Financing
Our securities financing project will cover not only securities lending and borrowing
activity but also repo and reverse repo. The project aims to cover trade confirmation and
matching, and expand on the reporting and settlement aspect for these product lines –
moving closer to the source of the trade.
At a high level, business activity will be evaluated according to three pillars:
      Discovery/Query Phase: On the pre-trade trade side SWIFT will collaborate to
      develop new messages together with FPL (FIX Protocol Limited).
      Trade confirmation and matching: SWIFT is at the early stages of investigating the
      market requirement for securities lending and borrowing trade confirmation and
      matching. The aim is to leverage the matching functionality of Accord.
      Settlement and reporting: there are ongoing initiatives to build MT 54x in ISO 20022
      to cover specifically securities financing transactions.
      SWIFT is also at the early stages of market consultation on reporting requirements,
      fees and rebates, recalls and buy-ins.
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4.10        Commodities
SWIFT is currently actively contributing to the activities of the FpML Commodities
Working Group where structures have already been finished for a Commodity Underlyer,
Commodity Swaps (fix/float and float/float) and Commodity Options. The Group is
currently looking at physically settled commodity trades.
As SWIFT is already carrying FpML messages on the network. It is the intention to
eventually do the same with commodity messages.
The Category 6 MT messages were expanded in the 2008 Standards Release to now
cover some base metals, and Standards is investigating possibility of expanding these to
be used with other commodities as well.


4.11        Funds distribution
The FPP ( Funds Processing Passport) is a standardised factsheet, containing all the
operational information required to correctly initiate a subscription/redemption into an
investment fund. The passports are created by the fund promoters and distributed via
various channels, including data providers. SWIFT is analysing the creation of a single
point of entry for collecting and/or distributing the FPP. These messages are in scope for
future release and will become available in the near future.
Section 5 – Value added services: Applications




“It was great to find a product on which we have to do no IT
 work. SWIFT develops an industry standard for matching,
 and all we do is plug it in. As it changes, we don’t play a part
 in the development work; we just get a better solution. In a
 brokerage house, a software solution that is seamless to
 management is an absolute godsend.”
 Dennis Sweeney, CoTreasurer Europe & Middle East, Newedge Group
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5          Applications
5.1        SWIFT’s Accord matching application
Enabling real-time matching and exception handling for foreign exchange, money market
and derivative confirmations
SWIFT’s Accord matching application is a fail-safe matching and exception handling
solution for your foreign exchange, money market and OTC derivative confirmations also
Equities and FI. Deployed on fault tolerant, duplicated hardware, and made accessible
through SWIFT’s secure IP network, Accord provides you with the combined benefits of
both a central and an in-house system, whether or not your counterparty is also an
Accord user.
Accord is unique in that it allows you to have a single window on all your treasury and
derivative deals, independent of:
      Settlement method: bi-laterally-netted, gross, CLS or SwapClear
      Financial instrument: Accord matches confirmations for foreign exchange, money
      market and derivative deals
      Counterparty: Accord does not require your counterparties to be Accord subscribers
      as well; it can handle all your confirmations sent and received over the SWIFT
      network. Accord can also process messages that were not exchanged via the
      SWIFT network like affirmations of brokers.
How does it work?
When a foreign exchange, money market or derivatives deal has been agreed, both
parties confirm this deal by sending the appropriate SWIFT confirmation message. If
either or both parties are Accord subscribers, SWIFT copies these messages to the
central Accord matching service. Accord matches all confirmations in real-time. As
confirmations, corrections and cancellations are received, Accord automatically updates
the matching status in real-time.
Reduce risk
Reduction in operational risk is a key factor in the organisation of a foreign exchange,
money market or derivatives back office. Increased regulatory scrutiny has also
suggested not only that operational risk should be measured, and kept to a minimum, but
also that specific amounts of regulatory capital be put aside to mitigate it.
Accord subscribers significantly reduce operational risk through their reliance on a central
matching system. Accord safeguards all confirmations, and maintains a historical trace of
all matching results. When both parties to a deal are subscribers to Accord, there is
100% certainty that the matching results will be identical for both parties.
Reduce cost
By subscribing to Accord rather than using a local matching system, IMs can save on the
resources normally required to keep a local matching system operational, maintain
message standard changes, and provide the support it would require internally. A central
matching solution also means that your usage of it is scaleable between a few hundred
confirmations per month and several thousand per day.
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The following instruments with their respective message types are currently matched in
Accord:


Message Types                   FX   MM      Derivatives      EQ/FI      Commodities

MT 300

MT 305

MT 306

MT 320

MT 330

MT 340

MT 341

MT 360

MT 361

MT 362

MT 392

MT 515                                                       Q2 2009

MT 600                                                                      Planned



The service will be extended to cover the matching of IRS (Accord currently already
matches IRS in FIN format) and CDS.
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5.2. SWIFT’s Affirmations application
Currently, many buy-side treasury market deals are either confirmed by email or fax or not
confirmed at all. The operational and settlement risk introduced by this manual process is
unacceptable in today’s market environment. SWIFT’s Affirmations application shows the
details of all your trades with all your counterparties on a single screen. Accepting or
rejecting them is done by a simple mouse click. As a result, your exposure to risk from
unconfirmed trades is eliminated.



                                                    1



 Submitting party                                                     Affirming party




                               2       MT 3xx


               MT 300 or 320       6                                                    4
                                                              3



                           6                                      5            or
                                                Central hub

Affirmations process flow




How Affirmations works
The above figure illustrates the Affirmations process flow.
1. The trade is executed between two institutions. In the context of the Affirmations
service, we refer to the two sides as submitting party (submits the trade confirmation to
the service) and affirming party (accepts or rejects the trade), either directly or via a
broker.
2. The submitting party generates an MT 3xx confirmation and sends it to the central hub
at SWIFT. To indicate that this confirmation is to be affirmed, you can use a code word in
field 72 or the Affirmations GUI.
3. The affirming party views all trades in a user-friendly GUI running inside SWIFT’s
Alliance WebStation.
4. Specific buttons allow the user to accept or reject every transaction. At any stage, a
chaser may also be sent to complement the acceptance or rejection.
5. All actions are recorded in the Affirmations database and can be reviewed at any time.
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6. The submitting party can see the resulting status of his confirmations in the GUI in real
time. Alternatively, a FIN message with the status of a trade can be sent for integration in
back office systems. An API is available for even tighter integration.
Benefits of Affirmations
Minimise risk
A reduction in the time during which there is uncertainty about a trade enables
operational risk to be minimised. Faster error detection prevents delays in processing,
allows better management of exposure and reduces settlement risk.
Reduce operational costs and improve efficiency and STP
Using Affirmations means less manual intervention, such as handling faxes. This reduces
processing costs. Operational efficiency is improved, enabling higher rates of straight-
through processing (STP). No IT staff are required, as the Affirmations application is
operated centrally by SWIFT.
Archival and audit trail
An integrated audit trail provides binding evidence of trades which are securely stored at
SWIFT. The optional Long Term Archive (LTA) enables you to outsource your data storage
to SWIFT. LTA stores all information related to a trade for a period of ten years from
maturity date. User friendly search functionality provides easy access to archived data.
Lower response time
Trades appear in real time in the graphical user interface (GUI). You can agree or disagree
within seconds. Chasers allow you to communicate instantaneously with counterparties.
Multiple asset class coverage
Affirmations supports multiple asset classes – foreign exchange (FX), FX options, money
market instruments and interest rate swaps.


Affirmations caters for the following SWIFT message types:
MT 300 - Foreign Exchange Confirmation

MT 305 - Foreign Currency Option Confirmation (vanilla)

MT 306 - Foreign Currency Option Confirmation (exotic)

MT 320 - Fixed Loan/Deposit Confirmation

MT 330 - Call/Notice Loan/Deposit Confirmation

MT 340 - Forward Rate Agreement Confirmation

MT 341 - FRA Settlement Confirmation

MT 360 - Single Currency Interest Rate Swap Confirmation

MT 361 - Cross Currency Interest Rate Swap Confirmation

MT 362 - IRS Rate Reset Confirmation
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5.3. Securities Market Infrastructures
Today, SWIFT is the messaging hub for many clearing and settlement systems in
payments, securities, foreign exchange and derivatives. Especially in clearing and
settlement, SWIFT is an established force in the Securities Market Infrastructures space.
Clearing and settlement infrastructures
A Market Infrastructure is a system administered by a public organisation (for example,
a central bank) or other public instrumentality, or a private and regulated association or
entity, that provides services to the financial industry for trading, clearing and settlement,
matching of financial transactions, and depository functions. A market infrastructure
encompasses a set of business rules and obligations, admission rules, operating rules,
business communication flows, and related communication channels.
A Securities Market Infrastructure (SMI) is an institution (frequently operating effectively
as a commercial ‘monopoly’) providing utility services to participants in the securities
markets. The mission of each Securities Market Infrastructure is to facilitate the efficient
processing of securities transactions.
For many of the leading Securities Market Infrastructure systems worldwide, SWIFT, ISO
15022 and ISO 20022 standards are central to their communications model. While the
infrastructures themselves benefit from improved productivity and operational efficiencies,
all participants gain from the reduction in risk and reduced costs for domestic and cross-
border transactions.
While most Securities Market Infrastructures use the FIN messaging service to exchange
financial data securely, cost effectively and reliably, a range of Securities Market
Infrastructures offer interactive or file transfer services using InterAct, FileAct and / or
Browse.
Securities Market Infrastructures can be divided into the following segments:
    Exchanges
    Matching Utilities
    Clearing Houses / Central Counterparties (CCPs)
    Central Securities Depositories (CSDs)
    Regulators / Financial Authorities
Specific Securities Market Infrastructures and SWIFT solutions will be relevant for specific
types of securities institutions
    Broker/Dealers
    Clearers
    Custodians
    Investment Managers
    Settlement Agents
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5.4.        Banking Market Infrastructures
In payments, more than 60 clearing systems, carrying from 500 to over 300,000
payments a day, rely on SWIFT for the secure messaging connectivity and common
message standards essential to their smooth operation.
Financial institutions and regulators continue to seek better control of the risks associated
with the explosive growth in the value of trading. Globally, risk managers are being asked
to measure, monitor and reduce exposure.
In response, industry associations and central banks have developed market
infrastructures for clearing and settlement. Because they are multilateral, they need a
trusted third party to provide secure, reliable and proven messaging solutions. SWIFT is
increasingly used by financial institutions to fill that role.
Additionally, SWIFT is now complementing its position in the wholesale, high value
clearing market by extending its portfolio of messaging solutions to the low-value
payments and ACH market.
Proven reliability, availability and resilience make SWIFT a first choice when choosing a
market infrastructure provider in both the high and low value payments clearing markets.
Section 6 – Standards and industry guidance




“Without SWIFT we would certainly need to double the
 number of operations staff and maybe even more.
 Fluctuations in the business cycles would cause problems
 because you would have to pull in temps. This would
 increase the risk and further reduce efficiency.”
 Investment Manager on SWIFT
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6         Standards
6.1       Introduction
Standards are a core element and foundation block of SWIFT and its offering to the
industry. We are committed to the collaboration of efforts and convergence of standards,
so that our community can benefit from cost savings, eliminate redundancies and seize
the opportunity to expand into previously untapped markets.
SWIFT offers a range of standards, in multiple syntaxes, which facilitate the link between
front and back office operations of financial institutions. These standards lead to higher
STP rates throughout the entire securities, payments and treasury transaction chains.
In order to promote harmonisation and interoperability through common standards for the
benefit of financial services industry, SWIFT works in close co-operation with other
international standards setters and financial industry bodies.
SWIFT Standards looks to develop business standards in support of transactions in
financial markets for payments, securities, treasury and trade services. Standards are
developed at SWIFT in response to community and regulatory business requirements in
conjunction with the industry.

6.2       SWIFT Standards Industry Involvement

6.2.1     International Organisation for Standardisation (ISO)
ISO is the world’s largest developer and publisher of international standards. ISO is a
network of the national standards institutes of 157 countries, one member per country,
with a Central Secretariat in Geneva, Switzerland, that co-ordinates the system.
SWIFT is actively involved as a category “A” liaison organisation for ISO Technical
Committee 68 (TC68), responsible for financial services standards and serves as
registration authority for a number of ISO standards related to financial industry, including
the ISO 15022 and ISO 20022 message standards as well as ISO 9362 (BIC) and ISO
10383 (MIC).


6.2.2     The Giovannini Group
The Giovannini Group is a group of financial market participants, under the chairmanship of
Alberto Giovannini of Unifortune Asset Management, which advises the European
Commission on financial market issues. The group has focused on identifying inefficiencies in
EU financial markets and proposing solutions to improve market integration.
The Group has issued four reports, the last of which focused on EU cross-border clearing
and settlement arrangements. It highlighted the fragmented nature of the EU clearing and
settlement infrastructure for cross-border transactions, and made several
recommendations for the removal of barriers that would lead to the improvement of the
current environment.
“The definition of formats and protocols (for standards in financial communications)
should build on the work already accomplished by SWIFT and the Securities Market
Practice Group with the aim of removing the difficulties caused by proprietary systems
and free data fields.” Giovannini
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SWIFT continues to work with the Giovannini Group, the European Commission and the
community to work towards the removal of barriers identified in the Giovannini reports.


6.2.3      Financial Products Markup Language (FpML)
FpML is the standards arm of the International Association of Swaps and Derivatives
(ISDA) which provides standardisation for the electronic processing and dealing of
financial derivatives instruments.
As a member of the FpML steering committee, SWIFT works closely with FpML and ISDA
on enhancing and furthering the standardisation of OTC instruments within the FpML
standard itself as well as actively working towards the development of ISO 20022
business models for the OTC business.


6.2.4    The Financial Information eXchange Protocol (FIX)
The FIX Protocol is a messaging standard developed for the electronic exchange of pre-
trade and trade messages between financial institutions, primarily investment managers,
broker/dealers and exchanges.

As a member of the FIX Global Technical Governance Board, SWIFT is an active member
of the FIX protocol organisation and supports the advancement of the standard through
participation in various working groups and committees.

SWIFT and FPL have collaborated on the development of an ISO 20022 model for the
pre-trade/trade business based on the FIX and ISO 15022 standards. Future efforts
between SWIFT and FPL will focus on extending asset class coverage and transactions
within the pre-trade/trade business model and additional models supporting post-trade
activities for listed derivatives, fixed income and cash securities.

6.3         Market Practices

6.3.1     Global Market Practice Groups
Global market practice groups are focused on creating globally harmonised market
practices in support of enhancing straight-through-processing (STP) within the financial
services industry. SWIFT currently facilitates global market practice groups for the
securities, payments and foreign exchange businesses.


6.3.2     Securities Market Practice Group (SMPG)
The SMPG focuses on harmonising market practices for the securities industry with a
concentration on settlement, reconciliation, corporate actions and investment funds. The
group’s efforts concentrate on the agreement and implementation of market practices
using the ISO 15022 and ISO 20022 standards to enhance STP. The SMPG membership
consists of representation from 35 markets consisting of investment managers,
broker/dealers, custodians, central securities depositories and regulators. Membership to
the SMPG is coordinated through localised National Market Practice Groups (NMPGs).
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6.3.3       Payments Market Practice Group (PMPG)
The PMPG works towards harmonising market practices for the payments industry in
response to changing regulatory requirements and to further STP at the global level by
reviewing local practices for lack of clarity, incorrect implementation of standards and
differing interpretations of best practices and providing recommendation for
harmonisation.
The group concentrates on the agreement, recommendation and implementation of
market practices using the ISO 15022 and ISO 20022 standards to enhance STP in the
payments industry. The PMPG membership is an international organisation with
representatives from the three geographical regions, EMEA, Americas and Asia-Pacific.


6.3.4     National Market Practice Groups (NMPGs)
National market practice groups, similar to the global groups, are focused on creating
harmonised market practices; however they concentrate on local domestic market
harmonisation for a specific country or region. The NMPGs also serve as members to the
global market practice groups. SWIFT participates in a number of the 35 local market
practice groups globally.
Section 7 – Messaging




“Without SWIFT we would certainly need to double the
 number of operations staff and maybe even more.
 Fluctuations in the business cycles would cause problems
 because you would have to pull in temps. This would
 increase the risk and further reduce efficiency.”
 Investment Manager on SWIFT
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7          Messaging
SWIFT provides a range of messaging services for different needs as well as a set of
related tools to help you get the most out of them.


7.1        Transaction exchange
SWIFT offers secure, reliable and resilient, access-controlled store-and-forward
messaging services to exchange structured messages. Value added processing includes
message validation to ensure messages are formatted according to SWIFT message
standards, delivery monitoring and prioritisation.


7.1.1      FIN
FIN is SWIFT’s core store-and-forward messaging service. It enables the exchange of
individual structured financial messages in a secure and reliable way. FIN enables more
than 8,700 financial institutions in more than 209 countries to exchange financial data
securely, cost effectively and reliably. In 2007, FIN carried more than 3.5 billion messages.

Benefits                             FIN is a secure, reliable and resilient, access-
                                     controlled, structured store-and-forward messaging
      Messages
                                     service. Value added processing includes message
      Secure and reliable
                                     validation to ensure messages are formatted
      STP-oriented
                                     according to SWIFT message standards, delivery
      30 years of experience
                                     monitoring and prioritisation, message storage and
                                     retrieval. It is based on a distributed processing
                                     architecture with full, built-in redundancy to ensure
                                     maximum availability.

FINCopy and FINInform are value-added features on FIN that enable the automatic
duplication of selected messages to a third party.


7.1.2      FINInform
FINInform is a value added feature of FIN that automatically duplicates messages based
on predefined parameters. The flexibility of FINInform makes it an ideal solution to cater
for your copying needs in multiple business scenarios.


Benefits                             FINInform enables the duplication of predefined
                                     message types sent and/or received by service
      Automated message copy
                                     participants and simultaneous copy to a third party,
      Flexibility
                                     for instance the head office of an institution, or a an
      Ease of implementation
                                     outsourcing agent.
      Security and reliability
                                     FINInform is a simple, flexible and secure solution to
                                     cater for your intra or inter-institutional copying needs
                                     in multiple business scenarios for example,
                                     outsourcing, resilience and risk management.
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7.1.3     FINCopy
FINCopy is a value added feature of FIN that enables the sender of a message to trigger
a copy to a third party for authorisation or further processing. FINCopy provides the ideal
solution for the monitoring of bilateral financial transactions by a central institution.


7.2         Bulk data exchange
SWIFT bulk data exchange services allow secure and reliable transfer of structured data,
either formatted to specified standards or free format, for immediate or deferred delivery.


7.2.1      FileAct
FileAct allows secure and reliable transfer of files and is typically used to exchange
batches of structured financial messages and large reports.

Benefits                              FileAct supports tailored solutions for market
                                      infrastructure communities, closed user groups and
      File transfer
                                      financial institutions. FileAct is particularly suitable for
      Secure and reliable
                                      bulk payments, New Global Note certificates and
      Flexible
                                      associated documents, securities value-added
      Low cost
                                      information and reporting, and for other purposes,
                                      such as central bank reporting and intra-institution
                                      reporting. FileAct is also recommended as
                                      replacement for the IFT service.


7.3         Interactive services
SWIFT offers interactive services that are well suited to mission and time-critical systems.
It allows for either an application to application or a person to application mode, that
requires execution in seconds.


7.3.1      InterAct
InterAct is SWIFT’s interactive messaging service supporting the exchange of messages
between two parties.
InterAct is well suited to mission- and time-critical applications such as Continuous
Linked Settlement (CLS), SWIFT’s Accord service or real-time gross settlement systems
Key features                          Designed to complement FileAct and FIN, InterAct
                                      can support tailored solutions for market
      Messages
                                      infrastructures, closed user groups and financial
      Secure and reliable
                                      institutions.
      STP oriented
      XML-based                       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.
                                    (RTGS).
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Messaging
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
Security
      access control
      access control management
      data integrity and authentication
      data confidentiality
      non-repudiation of message emission


7.3.2    Browse
Browse in a secure, reliable environment: Browse combines the user friendliness of web
technology with the security features offered by SWIFTNet.

Key features                                  Browse is based on the "https" internet standard
                                              protocol. Designed to complement FileAct and
      Browsing
                                              InterAct, Browse offers customers the capability to
      Secure and reliable
                                              browse remote web servers using Alliance
      Internet standard protocol
                                              WebStation.
      Easy integration in existing
      web servers                             For communications of a more sensitive nature, the
      Cost effective                          browsing capability provides direct access to the
      communication service                   secure messaging features of InterAct and FileAct,
                                              offering authentication, encryption and non-
                                              repudiation. Such communication may, for example,
                                              include a request for more details or initiation of
                                              transaction based on the browsed data.



7.4         Directories
SWIFT publishes a number of reference data directories that are indispensable for
improving straight-through processing.


Bank and business identifiers
BIC and BEI: Identifying your financial institution
with the Bank Identifier Code (BIC).

Identifying your corporation with the Business
Entity Identifier (BEI).
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Directories

BIC Directory                                         BICPlus IBAN Directory

Lists the BICs issued under ISO 9362 to the           A comprehensive database that combines the
financial institutions and corporates that need to    BICs and their details with the national clearing
be identified in FIN payments traffic.                codes of some 60 countries.


SEPA Routing Directory                                Countries, Curren cies, Holidays Directory

This directory tells you which beneficiary bank is    Contains country specific payment processing
SEPA adherent and ready to process your               information.
payments, and how you can reach it.

Services Directory                                    IBAN Registry

A look-up tool with a file extraction facility that   SWIFT registers new IBAN formats under the ISO
shows all participants in services and SWIFT          13616 standard. SWIFT publishes all registered
solutions implemented on SWIFTNet.                    IBAN formats (one per country) in the free
                                                      downloadable ISO 13616 IBAN Registry
                                                      document.


BIC Database Plus                                     BIC Enqu iry Tool

The BIC Database Plus is a directory that will        The BIC Enquiry Tool is a downloadable software
cease to exist in November 2008 and that cannot       tool that allows you to look-up data in the
be ordered anymore.                                   downloaded directory files.


Directory Downloads                                   BIC Online Professional

If you are subscribed to a downloadable version of    Access the online look-up tool for consulting the
a directory then you can download the data from       complete BIC Directory, and the BIC history, on
this page.                                            your internet browser (requires subscription). The
                                                      content is updated daily to reflect the urgent BIC
                                                      (de)activations. It is an ideal tool for message
                                                      preparation and repair.


                                                      Data Registration Services

                                                      Register a new or modify a BIC or BEI under ISO
                                                      9362.

                                                      Register a new IBAN format under ISO 13616.

                                                      Change your institution’s data published in
                                                      SWIFT’s directories.
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7.5        Business intelligence
Data-driven decision making made easier
The Watch portfolio of online reporting and analytical products puts critical business
intelligence about your financial institution and SWIFT to work for you by giving you
monthly updates of your traffic flows, market shares, messaging costs and total SWIFT
expenses.


Watch Analyser                                     Watch Reports

Watch Analyser gives you direct, easy access to    For users who do not require Analyser’s
business intelligence about the global financial   on-demand availability and breadth of analytical
industry. You can analyse your own total cost of   power, the Watch Reports provide convenient
ownership in SWIFT and performance over SWIFT,     subscriptions to the most common analyses that
and access key data about SWIFT across markets     financial institutions require. With Watch Reports,
and countries.                                     you don’t have to search for the information you
                                                   need. Now you get the latest updates each month
This means easy, instant access to critical data   on how your business is doing.
that helps you to understand your own business
better.




7.6        Simulation Testing and Qualification Services (STaQS)
The Simulation Testing and Qualification Service application is a messaging testing
platform that enables customers to test MX and MT industry standards in the scope of
SWIFT’s solutions and FIN. STaQS test results are accessed using the STaQS interface.


Benefits:
      Improve compliance with industry market practice
      Deal with local variations in various world markets
      Improve counterparty automation
      Reduce manual steps and exception processing
      Benchmark progress for corporate actions improvement projects
Section 8 – Connectivity




“Before we had SWIFT, we had proprietary terminals all over
 the place. Staff needed to be trained on all these different
 systems and data was re-keyed all day long. Now, we simply
 have one system.”
 Investment Manager on SWIFT
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8             Connectivity
8.1           Who can connect to SWIFT?
The following table highlights the wide variety of financial industry players who can
currently connect to SWIFT. Some players can connect directly to SWIFT (e.g. IMs,
Banks, Custodians, etc.). Others, such as Corporates (e.g. corporate customers of
Banks), are able to connect to SWIFT indirectly via such services as an MA-CUG
(member administered closed user group). This allows SWIFT Members to establish their
own closed user group.

Financial Industry Players                           Connect to           Connect to
                                                    SWIFT Directly      SWIFT Indirectly

Investment Manager

Broker / Dealer

Hedge Fund

Central Counterparty (CCP)

Exchange

Virtual Matching Utility

Electronic Trade Confirmation Provider

Custodian

[International] Central Securities Depository

Market Data Provider

Regulators

Corporates

Insurance Companies

Distributor

Investors Intermediary

Fund Administrator

Transfer Agent / Registrar

Portfolio / Fund Manager

Concentrator / Hub

Custodian / Trustee

Bank

Clearing Systems

RTGS (Real Time Gross Settlement) Systems

Treasury Counterparties

Market Infrastructures (e.g. CLS)
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8.2          Is my institution eligible to join?
You can join SWIFT if your institution is in one of the following categories:
1. Full member: If you are a bank, eligible broker-dealer or a regulated investment
   management institution, then you can join SWIFT as a full member.
2. Submember: If you are owned and controlled by a parent institution that is already a
   member, then you can join SWIFT as a submember.
3. Participant: If you are one of many different types of institutions that play a role in the
   financial industry, then you can join SWIFT as a participant. Examples include money
   brokers, securities exchanges and market data providers.
4. Corporate: As a corporation, you can also join SWIFT and communicate with your
   financial counterparties over the SWIFT network. Different models exist for privately
   held and publicly traded companies.


8.3         Categories of SWIFT User (until September 2009)
There are three categories of SWIFT users:
A.1.1      Shareholder (Member)
An eligible organisation holding a share in S.W.I.F.T. SCRL, including banks, eligible
securities broker-dealers and regulated investment management institutions. Details
about the SWIFT membership criteria can be found in the SWIFT By-laws.
A.1.2    Non-Shareholders
A.1.2.1 Non-Shareholding Members
A Non-Shareholding Member is an organisation which complies with the eligibility criteria
of a Shareholder (Member) which has either chosen not to or is prevented from becoming
a Shareholder.
A.1.2.2 Sub-Member
An organisation more than 50 percent directly or 100 percent indirectly owned by a
Shareholder and which meets the criteria set forth in the first paragraph of Article 8 of the
Articles of Association. A Sub-Member must fall under full management control of the
Shareholder.
A.1.2.3 Participants
Categories of Participants currently accepted by SWIFT are:
      Brokers and Dealers in Securities and Related Financial Instruments
      Central Depositories and Clearing Institutions
      Corporates
      Financial Market Regulators
      Fund Administrators
      Investment Management Institutions
      Money Brokers
      Non-Shareholding Financial Institutions
      Participants in a Member Administered Closed User Group
      Payment System Participants
      Recognised Exchanges for Securities and Related Financial Instruments
      Registrar and Transfer Agents
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      Representative Offices
      Securities Electronic Trade Confirmation (ETC) Service Providers
      Securities Market Data Providers
      Securities Market Infrastructures System Participants
      Securities Proxy Voting Agencies
      Subsidiary Providers of Custody and Nominee Services
      Trading Institutions
      Travellers Cheque Issuers
      Treasury Counterparties
      Treasury ETC Service Providers
      Trust or Fiduciary Services Companies
Note: Access to SWIFT services and products is limited depending on the type of Participant.

SWIFT’s Legal Definition of an IM
SWIFT recognises three types of IMs:
      Traditional IM (e.g. investment manager, asset manager, fund manager, etc.)
      Insurance Company
      Government Institution
Traditional IM
The following conditions need to be fulfilled to be recognised as a Traditional IM:
i.    Are primarily engaged in the management of Asset portfolios (which must be
      composed, at least in part, of securities); and
ii.   Are authorised by a competent regulatory authority to conduct such primary business
      activity; and
iii. Are subject to relevant regulations applied by such competent regulatory authority.
iv. In countries where conditions ii) and iii) do not apply, are sponsored as an Investment
    Manager by at least two-thirds of the S.W.I.F.T. SCRL shares held by the Members in
    the country of origin of the applicant and either (a) by a minimum of ten Members,
    or (b) by one percent of the total S.W.I.F.T. SCRL shares.
Either i), ii) and iii), or i) and iv) must apply. The support referred to in iv) (a) and (b) may be
provided by a combination of Members from and / or outside the country of origin of the
applicant.
Investment Management Institutions (including Insurance Companies and Government
Institutions)
Investment Management Institutions are institutions which:
a. are engaged in the management of asset portfolios (which must be composed, at
   least in part, of securities), in connection with their primary business activity, which is
   either the provision of investment management services to other persons or the
   underwriting of insurance or both; and
b. are authorised by a competent regulatory authority to conduct such primary business
   activity; and
c. are subject to relevant regulations applied by such competent regulatory authority;
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d. in countries where conditions b) and c) do not apply, are sponsored as Investment
   Management Institutions by at least two-thirds of the S.W.I.F.T. SCRL shares held by
   the members in the country of origin of the applicant and either (i) by a minimum of
   ten members; or (ii) by one percent of the total S.W.I.F.T. SCRL shares.
An agency, department, or institution of a national, regional, or state government or public
international organisation (public authority) qualifies as an Investment Management
Institution if (i) primarily engaged in the management of asset portfolios (which must be
composed, at least in part, of securities) on behalf of and for the account of such public
authority and (ii) sponsored according to sub-paragraph d) above).
1. Either a), b), and c), or a) and d) must apply. The support referred to in d) (i) and (ii)
   may be provided by a combination of members from and/or outside the country of
   origin of the applicant.
2. Investment Management Institutions, except Insurance Companies, and Government
   Institutions fulfilling the criteria as per Brokers and Dealers in Securities and Related
   Financial Instruments, and Investment Management Institutions must become either a
   shareholder or a non-shareholding member.
Insurance Company
The following conditions need to be fulfilled to be recognised as an Insurance Company:
i.    Are engaged in the management of Asset portfolios (which must be composed, at
      least in part, of securities), in connection with their primary business activity, which is
      either the provision of investment management services to other persons or the
      underwriting of insurance or both; and
ii.   As above under Traditional IMs.
iii. As above under Traditional IMs.
iv. As above under Traditional IMs.
Either i), ii) and iii), or i) and iv) must apply. The support referred to in iv) (a) and (b) may be
provided by a combination of Members from and / or outside the country of origin of the
applicant.
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Government Institutions
The following conditions need to be fulfilled to be recognised as a Government Institution:
i.    An agency, department or institution of a national, regional or state government or
      public international organisation (“public authority”) qualifies as an investment
      manager if primarily engaged in the management of Asset portfolios (which must be
      composed, at least in part, of securities) on behalf of and for the account of such
      public authority; and
ii.   As above under Traditional IMs.
iii. As above under Traditional IMs.
iv. As above under Traditional IMs.
Either i), ii) and iii), or i) and iv) must apply. The support referred to in iv) (a) and (b) may be
provided by a combination of Members from and / or outside the country of origin of the
applicant.


8.3.1   SWIFT’s Legal Definition of a Fund Administrator
Fund Administrators
A Fund Administrator is an organisation which has one or more of the following activities:
a. maintains the official ownership record of all fund units,
b. provides administration of orders subscribing to and redeeming from investment funds,
c. executes, administers payments, money transfers on behalf of the fund,
d. calculates Net Asset Value, generates statements, legal reporting and reconciliations on
   behalf of the fund.
For the purpose of this definition, a fund includes investment fund, hedge fund, mutual
fund, unit trust, Sicav, and collective investment vehicles.
Where the applicant is a regulated entity, it must follow the local laws and regulations as
identified by the Board with the assistance of the National Member Group.
Where the applicant is not a regulated entity, or where no regulations exist in the country
of the applicant, the BRM 092 Sponsorship Rule applies (see below).
BRM 092 Sponsorship Rule
Unless otherwise specified, the BRM (Board Report to Members) 092 Sponsorship Rule
applies to all categories of participants.
If and only if no relevant regulatory environment is in effect in the nation of the applicant,
the Board may accept the application of a participant if it is supported by:
a. at least 2/3 of the shares held by the members of the nation of the applicant, if there
   are any, and
b. at least 10 members, and
c. at least one percent of the total shares issued to the membership.
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The support referred to in b) and c) above may be provided by a combination of
members from and outside the nation of the applicant.
Should licensing or authorisation be subsequently required in the nation of the participant,
the participant will have to follow these requirements to be allowed continued usage of
the SWIFT system.


8.3.2     SWIFT Categories and IMs
The following diagram outlines the different categories an IM can join SWIFT under,
depending on the specific circumstances of the IM.


                                                                               Insurance Company /
                                  Traditional IM
                                                                               Government Institution




                                                         More than 50%
                                                        directly or 100%
                                  Choose not to       indirectly owned by
                                     become a          a shareholder, with
                                 shareholder or is      full management
                                  prevented from              control
 Choose to become                   becoming a                or                     No shares in the
  a shareholder of                  shareholder                                    capital of the SWIFT
                                                        Meet eligibility
   SWIFT SCRL                           or             criteria as a sub-                  SCRL

                                entitlement of less         member
                                  than 5 shares               and
                                                       Are in the same
                                                         business as
                                                        Shareholder


      Shareholder               Non-shareholder
                                                        Sub-member                      Participant
       Member                      Member

Note: Traditional IMIs can, depending on their specific circumstances, join SWIFT under any of the above
categories. Insurance Companies and Government Institutions can join SWIFT under the Participant
category.



8.4         Categories of SWIFT User (from September 2009)
The following list of user eligibility criteria will, at the time of implementation, fully
supersede the SWIFT user categories as listed above in section 8.3
Users will be categorised in three distinct groups.
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Group 1 - Supervised Financial Institution
A Supervised Financial Institution is: an entity that engages in payment, securities,
banking, financial, insurance, or investment services or activities, and that, for such
purposes is (i) licensed by or (ii) authorised by or (iii) registered with a Financial Market
Regulator, and is subject to supervision by a Financial Market Regulator as per BRM 199,
or an International, supranational, intergovernmental or national governmental body or
institution that as a main activity engages in payment, securities, banking, financial,
insurance, or investment services or activities (including central banks)
The Supervised Financial Institution will be entitled to use the services of SWIFT, as
defined by the Board of Directors.


Group 2 - Non-Supervised Entity Active in the Financial Industry
A Non-Supervised Entity active in the financial industry, is an entity which:
as a main activity, engages in payment, securities, banking, financial, insurance, or
investment services or activities to Supervised Financial Institutions and/or to third parties
unrelated to the Non-Supervised Entity, or
as a main activity, engages in services to Supervised Financial Institutions and/or to third
parties unrelated to the Non-Supervised Entity, which services support financial
transaction processing by means of communicating and processing information and
which services require the sending of messages in the Non-Supervised Entity’s own
name; and
      is not subject, for such purposes, to supervision by a Financial Market Regulator;
      and is a duly incorporated, validly existing and duly organised legal entity, and
      is in good standing financially and with respect to compliance with applicable laws
      and regulations, and
      is subject to regular audits in accordance

Group 3 - Closed User Groups and Corporate Entities
Group 3 is composed of the following currently existing SWIFT user categories:
Corporate, Financial Market Regulator, Payment System Participant, Securities Market
Data Provider, Securities Market Infrastructure System Participant, Service Participant
within Member-Administered Closed User Group and Treasury Counterparty.


8.5        SWIFT Pricing and Fees
Financial institutions joining SWIFT incur fees based upon the way in which they connect
to and use SWIFT. As a co-operative, SWIFT aims to continuously lower average
message prices. SWIFT pricing is value based, allowing users to pay only for the
products and services they use. Pricing is also loyalty based; the more an institution uses
SWIFT, the lower the per unit cost (e.g. per message costs decrease as an institutions
traffic invoice increases).
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     Co-operative based
     Prices decrease as cost
     effectiveness increases

                                               1991 average message price 2002

     Value based                                                               FIN
                                                                    InterAct
     The right solution for the
     right need at the right price                        FileAct
                                                    Browse


     Loyalty based
     The more you use SWIFT,
     the lower your unit prices
                                                low          SWIFT usage         high


“SWIFT’s lowering of prices has been a continuing story, but in 2007 SWIFT took the bold
step of introducing cuts upfront, as well as giving a rebate at year end. SWIFT also
reduced prices cumulatively by 25 percent in 2007, with a combination of reduced prices
and a rebate on all messaging traffic. We also announced a further 5 percent price
reduction from January 2008.”
The various fees can be broken down into three categories:
      joining and connecting to SWIFT
      using SWIFT services and Business Solutions
      other SWIFT services

8.5.1    Joining and connecting to SWIFT
New to SWIFT? Use the steps below to learn how to join SWIFT, connect to the SWIFT
network and become fully operational.
Step 1: Joining SWIFT
To use SWIFT, you must first join the SWIFT user community. Find out what the criteria
are and whether your institution is eligible to join.
Step 2: Connect to SWIFT
Once you are a member of the SWIFT community, you need to select and implement
your infrastructure to connect to SWIFT. Find out what your options are.
Step 3: Go live
When you have implemented and tested your infrastructure to connect to SWIFT, you are
ready to go live. Find out what you need to do to confirm your readiness to SWIFT.
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Institutions incur a variety of fees dependent on their status and type of connectivity to
SWIFT:
Up-to-date fees for all of the above can be obtained by contacting your SWIFT sales
representative.


Fee                                                 Comment

Shareholding and Registering with SWIFT             Shareholder fee

                                                    BIC and BEI registration Connected SWIFT
                                                    destination (connected 8-character BIC)

                                                    connected 8-character

                                                    Publication in the BIC Directory

SWIFT User Handbook                                 Annual recurring fee

SWIFTNet Link                                       One-time and recurring fees

                                                    Licence extensions

                                                    Extra software copy

                                                    SWIFTNet Link alternative routing

Security Products Fee                               One-time and recurring fees related to the
                                                    registration and maintenance of Security Officers,
                                                    PKI certificates

Multi-Vendor Secure IP Network Connectivity fee     Recurring fees dependent on the type of
                                                    connectivity (managed or dial-up), the bandwidth
                                                    and the country where the connection is
                                                    implemented

SWIFT Interfaces                                    Dependent on whether institution uses SWIFT or
                                                    3rd party vendor interfaces

                                                    One-time and software maintenance recurring fees
                                                    dependent on volume of transferred traffic



8.5.2    Using SWIFT Services and Business Solutions
For FIN and messaging and for some of the new business solutions, fees are based on
the volume and size of transferred messages or files and are typically charged to the
sender of the message (except when otherwise specified or agreed with SWIFT).
Note: some business solutions are charged based on a flat service fee.

Outlined below is the methodology by which SWIFT Users are charged for their service
usage. For the specific charges applicable to each business solution, please contact your
SWIFT sales representative.
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The price per message is typically defined according to the following criteria:
      The institution’s Global Tier determined by the institution’s overall financial contribution
      related to usage of SWIFT. The more the institution uses SWIFT, the better the tier in
      terms of price per message.
      The route used by the transfer, either domestic, international or intra-institution.
      The domestic route is defined by the country of the sender and the receiver.
      Intra-institution traffic is the traffic transmitted between destinations that are part of
      the same financial institution. International inter-institution traffic is all other
      communication.
      The optional value-added features selected for the transfer of message or file (e.g.
      priority, delivery notification, etc).
      The size of the transferred message.
Up-to-date fees for all of the above can be obtained by contacting your SWIFT sales
representative.


8.5.3     Other SWIFT Services
SWIFT delivers Directory, Documentation and Training services to its community. Up-to-
date fees for these services can be obtained by contacting your SWIFT sales
representative


8.6         SWIFT Connectivity Solutions
To be able to connect to SWIFTNet, users require:
      a network connection to SWIFT’s secure IP network (SIPN)
      SWIFTNet Link
      an interface
SWIFT users can choose to manage their own technical connectivity (Direct Connectivity)
or they can outsource their connectivity either to a Service Bureau or by the use of a
shared connection (Indirect Connectivity).
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      Private          Shared              Shared           Shared
  infrastructure     connection       infrastructure 1 infrastructure 2

   Application       Application        Application      Application      Business application
                                                                          EAI - integration software;
   Middleware        Middleware         Middleware       Middleware
                                                                          translation
    Messaging            Messaging      Messaging         Messaging       Interface software; manual
                                                                          versus automation
 Communication Communication Communication Communication Communications software

     Network             Network          Network          Network        Network connection;
                                                                          Hardware Security Module
     Outsourced




Private Infrastructure               Access Kit or Entry Kit

                                     1. SWIFT Messaging software (SAA): Allowing back-office integration or
                                        SWIFT Messaging software (SAE): allowing manual entry

                                     2. SWIFT Communication software (SAG,SNL)

                                     3. Network connection

Shared connection                    Access Kit

                                     In addition to 3rd party vendor interface of your choice

                                     SWIFTNet Link Kit

                                     In addition to 3rd party vendor interface and communication Software
                                     of your choice

Shared Infrastructure 1 or 2         Remote Kit

                                     SWIFT Messaging software (SAE) with Manual entry of messages

                                     Essentials Kit



Whether a SWIFT user chooses to connect directly or indirectly is an internal business
decision specific to each organisation. It is SWIFT’s goal to ensure that all of its users
have choice in this respect.
Some of the points to consider when deciding whether to connect to SWIFT directly or
indirectly are as follows:
     Are you a global, regional or domestic institution?
     Are you planning on expanding your physical presence in the future?
     Do you have multiple business lines, or are you focused in one area?
     Are you planning on expanding your business lines in the future?
     Are your volumes high, or do you anticipate your volumes increasing in the future?
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8.6.1    Direct Connectivity
To be able to use SWIFTNet services, you require a network connection to SWIFT’s
secure IP network (SIPN), SWIFTNet Link and an interface.
Secure IP network is SWIFT’s highly secure and extremely reliable network. Full
redundancy, advanced recovery mechanisms and first class operations and customer
support services ensure continuous network availability for SWIFT services.
SWIFTNet Link guarantees interoperability between our customers. SWIFTNet Link is our
unique underlying software module that encapsulates transport, service management and
security technologies.
Interface — The Alliance product family includes interface products for both SWIFTNet
and FIN. Alliance WebStation and Alliance Gateway are our SWIFTNet interface
products. Alliance Access and Entry are our FIN-specific interfaces. In addition to
SWIFT’s own interface products, third party interfaces are also available from SWIFT’s
service partners.
Alliance Lite — is the latest addition to our connectivity products suite. It complements
our well known products in the Alliance family, but is fundamentally different. It is a SWIFT
Internet-based service that provides a direct, secure and low cost access to SWIFT
messaging services. New customers do not have to install SWIFT specific connectivity
products at their premises, but can access the Alliance Lite web-service using their
standard Internet connection with a SWIFT-issued hardware security token.
Alliance Lite will support both manual operations through a standard Internet browser
with message data entry and business features — and integration with the back-office
through a lightweight auto-client. It is positioned for new low volume customers, initially
corporates and small financial institutions.
Alliance Lite complements our well known connectivity products in the Alliance family, but
is fundamentally different. It is an Internet-based service that provides a direct, secure and
low cost access to SWIFT. You do not have to install SWIFT-specific connectivity
products at your premises. Instead, you can access Alliance Lite using a standard
Internet connection with a SWIFT-issued hardware security token.
Alliance Lite is designed for new low volume customers typically exchanging less than
200 files and messages a day.
The first release will cater to the requirements of low volume corporates and financial
institutions. It will support FileAct and a limited number of MT over FIN focusing on
multibank payments initiation, cash reporting and foreign exchange transactions.
Alliance Lite will support both manual operations — through a browser with message
data entry and business features — as well as integration with the back-office through a
lightweight AutoClient.
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8.6.2     Indirect Connectivity
For users that prefer to outsource their connectivity to a third-party, SWIFT operates an
indirect connectivity programme to register and maintain high standards of resiliency and
security.Two indirect connectivity options are available:
Outsourcing day-to-day operations to a third-party called a service bureau
Or connecting via a member concentrator which in addition to technical outsourcing
provides additional business services like taking care of the SWIFT administration and
invoicing.
Only member-concentrators and service bureaus registered under the indirect
connectivity programme are able to connect SWIFT users. The programme sets out the
operational requirements covering resiliency and security that all indirect connectivity
providers are required to meet.
To help users identify the best providers of indirect connectivity, SWIFT is launching a
labelling programme for indirect connectivity providers that meet even higher operational
standards. Two labels are available and will be awarded from 2009:
The operational assurance label
SWIFTReady Connectivity - Best Practice label.



SWIFT can provide a variety of connectivity options depending on each individual customer’s
needs and requirements, ranging from fully resilient and redundant permanent connections down to
dial-up connections, either directly or indirectly. For detailed information on how you can connect
to SWIFT, please contact your regional account manager.

8.6.3       Interfaces

Connectivity for new customers

A choice of connectivity products in line with your   K its
requirements                                          Pre-packaged, one-stop shop products that
                                                      contain everything you need to get started with
In connectivity for new customers Low-volume          SWIFT and exchange up to 1,000 messages/files
customers (up to 1000 messages per day)               per day Alliance Lite
Designed for firms with volume requirements           Lite
below 1,000 messages/files a day, our                 New customers who plan to exchange less than
connectivity portfolio is tailored to best fit your   200 messages/files per day can benefit from a
unique needs.                                         light connectivity model based on a standard
                                                      browser and internet connection.

                                                      Medium and high-volume customers (more than
                                                      1000 messages per day)

                                                      There’s no such thing as a generic connectivity
                                                      solution for customers with average traffic volume
                                                      exceeding 1,000 messages/files
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Connectivity for high-volume customers

Highly resilient and scalable connectivity products   The Alliance Access messaging interface has
for customers with traffic volumes above 40,000       been scaled up and can process up to 1,000,000
messages or files per day                             messages per day. A range of adaptors and
                                                      integration facilities are available to integrate your
In connectivity for high-volume customers             middleware and back-office applications.
Network connectivity                                  Messenger and WebStation are available if you
The high-end connectivity options offer full          choose to enable your operators to directly
resilience and scalability to ensure your business    manage SWIFT business from the messaging
is connected 24 x 7. Read more about the              interface.
products available to connect to SWIFTNet and         The Alliance Gateway communications interface
hook up directly to SWIFT’s secure IP network.        allows you to connect multiple messaging
See also the direct connectivity page.                interfaces and helps you with traffic routing. The
                                                      SWIFTNet Link is required as a lower level
                                                      protocol stack.


Connectivity for medium-volume customers

Connectivity products for customers who typically     The Alliance Access messaging interface is the
exchange between 1,000 and 40,000 messages            key product in this space and allows you to
or files per day                                      connect your in-house applications. It is
                                                      complemented by Messenger to manually
In connectivity for medium-volume customers           manage your messages and WebStation to
Network connectivity                                  access FileAct and Browse based services.
We offer a range of connectivity options that
combine throughput and resilience. Read more
about the products available to connect to            The Alliance Gateway communications interface
SWIFTNet and hook up directly to SWIFT’s secure       allows you to connect multiple messaging
IP network. See also the direct connectivity page.    interfaces and helps you with traffic routing. The
                                                      SWIFTNet Link is required as a lower level
                                                      protocol stack.

Connectivity for low-volume customers

Connectivity products for customers who typically     Functionality and ease of use, find out more about
exchange less than 1,000 messages or files per        our product line:
day
                                                      Alliance Access/Entry
In connectivity for low-volume customers Network
connectivity                                          Alliance Starter Set

Light network connectivity options to ease the
access and reduce the cost.

Discover our range of connectivity options:

Direct connectivity

Indirect connectivity
Section 9 – Service




“Our transaction volumes can vary significantly from one day
 to the next. However, the effort involved in generating our
 SWIFT based settlement instructions that are sent to
 custodians is very limited given the high levels of automation
 that we have achieved in this area – we therefore barely notice
 the volume of settlement instructions sent from day-to-day.”
 Investment Manager on SWIFT
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9          Service
9.1        Business Assessment Programme
The Business Assessment Programme provides dedicated teams of experienced
consultants to analyse your business flows or your infrastructure, or both. Their
recommendations help you reduce your total cost of ownership, lower your operational
and reputational risk and identify opportunities for business growth.
How can we help you?
Over the past ten years, SWIFT has reviewed the business processes and infrastructure
of over a hundred financial institutions.
Based on our findings, we see that a series of key challenges reoccur time and time
again:
— a lack of processing scalability due to excessive manual processing
— no end-to-end view on the operational processing environment
— non-optimal use of the existing infrastructure
The Business Assessment Programme can help you to:
— support your key business drivers by
        - extending your messaging capabilities
        - leveraging your existing SWIFTNet investment
        - setting up a scalable infrastructure across all entities of your organisation.
— evaluate how to reduce your operational costs by
        - optimising your operational efficiency (straight-through processing)
        - reducing operational and reputational risk
        - rationalising internal proprietary systems, infrastructure and communication
         channels

Benefits:
      Optimise operational efficiency
      Lower operational and reputational risk
      Extend and enhance services to your customers
      Improve the scalability of your infrastructure
      Reduce infrastructure spend


9.2        SWIFT Partner Programme
As a SWIFT customer, how can you be sure that you are buying a solution from a third-
party supplier that is compliant with SWIFT? How do you choose a company to help you
with your SWIFT-related integration, implementation and training and be certain that they
have the expertise to perform the job? SWIFT’s certification programmes and
partnerships help you to answer these questions.
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SWIFT implemented a new partnership model in 2008, as described below.
The Partner Programme team’s objectives are to:
      Facilitate SWIFTNet implementation for members
      Increase STP and reduce total cost of ownership to members


9.2.1    Value Based Partner Segmentation
All companies registered with SWIFT Partner Management are classified into one of three
categories:
SWIFT registered vendors - given access to information and invited to selected events
SWIFT solution providers - recognised for their solution capabilities and receive
labels / certificates
SWIFT partners - selected based on mutual need and fit, strategic importance of jointly
delivered value, close commercial working relationship with joint target initiatives.
In addition to the three relationship types, SWIFT also establishes alliances with thought
leaders, relationships with analysts, and co-operation with some consultants amongst
others.
9.2.1.1 SWIFT Registered Vendors
This relationship type is the entry-level into SWIFT’s overall partner framework. Its main
purpose is to address the needs of companies who want to obtain information,
documents, test tools and development products from SWIFT.
9.2.1.2 SWIFT Solution Providers
The relationship model
A vendor enters the SWIFT solution provider relationship model at the moment they have
successfully passed SWIFTReady certification for one or more of their solution
components.
Whereby they become a provider of a SWIFTReady solution component (application,
service, connectivity). When SWIFT customers are interested in these solutions, SWIFT
co-operates with the solution provider as needed.
Customer solution components
Today SWIFT runs certification programmes for three customer solution components:
SWIFTReady applications — financial applications and middleware
SWIFTReady services — training, implementation, integration, migration, system care,
support
SWIFTReady connectivity — SWIFTReady service bureau
All SWIFTReady certifications (and the associated labels) are granted on a yearly basis
and are subject to annual renewal by meeting the pre-defined criteria.
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9.2.1.3 SWIFT Partners
The relationship model
This relationship model is used when SWIFT and the partner agree on a joint customer
value proposition and a close commercial and marketing relationship.


9.2.2     SWIFTReady Certification of Solution Components
SWIFTReady certification programmes validate and recognise the
various solution provider and partner capabilities (solutions) available   2008
                                                                                        2008


to customers. These industry-recognised labels are the most
important reference tool for customers. Many customers use it as a
key requirement in their RFI and RFP processes.
SWIFTReady certification programmes are classified into three categories:
    SWIFTReady certification of financial applications and EAI solutions
    SWIFTReady certification of services (and expertise to deliver such services)
    SWIFTReady certification of SWIFT connectivity solutions

9.2.2.1 SWIFTReady Applications
SWIFTReady certification of applications is based on the existing scheme that is well-
established and well known. SWIFTReady applications are financial applications,
supporting FIN or XML-based solutions such as securities settlement, cash reporting, E&I
and TSU.
SWIFTReady certification involves two stages of validation:
Functionality — compliance with a published list of functional criteria and/or expertise
(depending on the certification programme). Successful validation results in a SWIFT
Conformance Statement
Quality — positive references from live users of the solution (measured through customer
questionnaire and interview feedback). Successful feedback results in issuance of the
SWIFT certified solution label
9.2.2.2 SWIFTReady Services and Expertise
The new SWIFTReady certification of services is structured into two areas of
competency/expertise:
   SWIFTNet infrastructure (functional)
SWIFTAlliance Access, Gateway, Integrator
    SWIFT Solutions (business)
Cash Reporting, E&I, TSU, Corporate Access, Bulk Payments for SEPA, Funds
The types of services that can be offered to customers include:
    implementation services
    integration services
    training services
    migration and upgrade services
    system care services
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9.2.2.3 SWIFTReady Connectivity
To date, two connectivity solutions fall into this category: service bureaux and SWIFT
interface products. Currently SWIFT validates these solutions through different validation
processes before they can be made commercially available to customers. It is SWIFT’s
intention to further harmonise and extend the certification related to these solutions, so
they can be an integral component of the official SWIFT Partner Management certification
programme.
A more stringent and formal, but still optional, certification of service bureaux will provide
a benefit to customers when evaluating their connectivity options to SWIFT. The SWIFT
certification aims to offer additional guarantees to customers with respect to functionality
and service levels.


9.2.3       Promotion of SWIFT Solution Providers and SWIFT Partners
9.2.3.1 Listing
A list of all certified providers, identifying the SWIFTReady certifications granted, will be
available on swift.com. This will provide a holistic view of each SWIFT partner / SWIFT
solution provider, where the customer is able to see the view of the SWIFT certified
components of the solutions or the joint value propositions offered by these companies.
Customers will also be able to search a supplier by the specific certification type. For
example, they can look up a supplier who has a SWIFTReady application for E&I, as well
as solution experts for E&I, and technical experts for solutions integration and SAG.
The securities business applications are obviously highly relevant for the investment
management community.
The types of business applications identified as key for this industry are:
      In the pre-trade/trade space: FIX engines and order management systems
      In the post-trade/pre-settlement space: FIX engines, order management systems,
      ETC providers and reconciliation applications
      In the clearing and settlement space: back office platforms and reconciliation
      applications
      In the custody space: corporate actions processing
The investment funds distribution vendor landscape is slightly different as niche players
have been developing very focused business applications catering for the specific needs
of distribution, fund accounting and transfer agency.
Partner Solutions has identified the following application types as highly relevant for the
mutual funds industry (in addition to the ones relevant for the investment management
industry generically):
      Distribution platforms
      Transfer agency applications
      Fund accounting systems
      Portfolio management applications
The middleware or EAI stack is the main component involved in the gathering of the
business flows and the construction of the messages. This application category is
spanning multiple spaces (also for funds distribution) and serves as the concentrator and
transformer of business flows beyond the interface.
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The market infrastructure service providers are traditionally seen as technical infra-
structure providers. Nevertheless, these are highly relevant for the investment
management community, and Partner Solutions carefully monitors the evolution within
this partner segment.
The consultancy and integration services stack would intervene at all stages in an
implementation process (architecture, business analysis, testing).
For details on SWIFT’s current range of Partners, please contact your SWIFT Sales
Representative, or go to www.swift.com.


9.3       SWIFT Training
Almost 30 years ago, the SWIFT Training department was created to support the SWIFT
members and help them to get the most out of their SWIFT connection. Our mission is to
help you increase your knowledge on the SWIFT infrastructure and the different message
types in order to improve your automation and service levels and decrease your
operational costs. SWIFT certified training experts will teach you everything you need to
know about the new training solutions available to manage the different SWIFT Alliance
interfaces and expand your knowledge on SWIFT’s solutions available in the banking and
securities markets. Read along to discover the benefits and find out what our customers
think about SWIFT Training.
Increase your operational performance and reduce your costs
Help to increase your operational performance, drive your costs down, and reduce the
risk of errors by learning how to use SWIFT’s products and services accurately and
effectively.
A worldwide SWIFT Training network
With a worldwide network of experienced instructors, we can save you time and money
by providing courses in your area.
A wide range of training solutions to suit all your requirements
From classroom courses to our e-learning tools, you can be sure that we have a high-
value training solution that’s right for your particular business need.
Tailored training
As part of our On-site service, we also provide training solutions tailored to your specific
needs that are delivered on your premises.
Training that’s up-to-date
Feel confident that your SWIFT instructor provides you with the correct and latest
information.
Multiple languages
With up to 15 languages covered, feel comfortable in following the training programmes
in your own language.
Quality that you can trust
We design, develop and deliver our training programmes ourselves so that you can be
assured that we provide the level of quality that you have come to expect from SWIFT.
Section 10 – About SWIFT




“If we were to report everything over fax, we would probably
 need twice as many people to do this. We have increased our
 traffic by tenfold without really increasing the headcount.”
 Investment Manager on SWIFT
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10       About SWIFT
10.1     Community Inspired
SWIFT is a community-inspired co-operative, founded by and for the financial services
industry. We work globally in 209 countries with more than 8,700 organisations including
banks, market infrastructures, securities institutions, corporations, network providers,
business partners and technology companies to ensure the financial world can carry out
its business operations with certainty.
Of the top 100 investment managers by assets under management, 72 are connected to
SWIFT.
Our role is two-fold. We provide the platform, products and services that allow our
customers to connect and exchange financial information securely and reliably. We also
act as the catalyst that brings the financial community together to work collaboratively to
shape market practice, define standards and consider solutions to issues of mutual
concern and interest.


10.2     History and Evolution
In 1973, banks communicated via telex - not very secure, minimum standards and little if
any automation. So 239 banks from 15 countries formed a co-operative to automate the
telex. They called it SWIFT. Their vision was to possibly harness emerging computer
technology and manoeuvre around the telecommunications monopolies to send
standardised financial messages between themselves, securely and reliably. They hoped
one day that the daily messages would grow to 300,000 each day.
Today we demonstrate the success of their vision and courage. SWIFT has more than
8,700 members and participants in 209 countries, and daily message volumes regularly
exceed 15 million.
The table below provides some of the highlights of SWIFT’s history over the past 35
years.


Year        Users      Countries     Messages          Highlights

1973         239           15             0            SWIFT is established

1977         518           22         3.4 million      First live message

1978         586           25        21.6 million      The first Sibos is held in Brussels

1982        1,017          44        79.9 million      Introduction of message text standards
                                                       for certain interbank securities
                                                       transactions

1987        2,360          64         222 million      Broker/dealers, exchanges, central
                                                       depositories and clearing institutions
                                                       allowed to join SWIFT

1990        3,049          83         332 million      Securities traffic (the new Category 5
                                                       messages) represents 2% of total
                                                       message traffic
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Year           Users            Countries   Messages       Highlights

1992           3,582               94       405 million    IMs become eligible to join SWIFT

1994           4,625              126       518 million    Bank of England selects SWIFT as one of
                                                           two network providers for CREST (UK
                                                           central securities depository)

1996           5,632              151       688 million    Electronic Trade Confirmation providers
                                                           become eligible to join SWIFT

1997           6,176              164       812 million    SWIFT announces the Next Generation
                                                           programme, based on a new, highly
                                                           secure, extremely reliable IP network

1998           6,557              178       937 million    The SWIFT Board transforms the
                                                           Securities Board Task Force into the
                                                           Securities Steering Council (IMs are
                                                           invited to join the Council)

                                                           ISO approves the new draft securities
                                                           message standard – ISO 15022

                                                           Proxy Voting agencies become eligible to
                                                           join SWIFT

1999           6,797              189       1.06 billion   Securities traffic represents 21% of total
                                                           message traffic

2001           7,457              196       1.53 billion   Insurance companies and government
                                                           institutions carrying out an IM role
                                                           become eligible to join SWIFT

2002           7,601              198       1.82 billion   Fund Administrators are eligible to join
                                                           SWIFT

2003           7,725              200        2 billion     Migration from ISO 7775 securities
                                                           message standard to the new ISO 15022
                                                           standard is completed

                                                           SWIFT develops a new XML message
                                                           based solution for investment funds

                                                           SWIFT launches the FIX service

2004           7,667              202       2.3 billion    Community migrates to SWIFTNet IP
                                                           platform

2005           7,863              204       2.5 billion    FIN securities traffic peak of 4 million
                                                           messages
                                                           on 1 December
                                                           Dismantling our X.25 network

2006           8,105              207       2.9 billion    Corporates become eligible to join SWIFT

                                                           FpML on SWIFTNet

                                                           Banks start SEPA testing

                                                           SWIFTNet Phase 2 kicks off

                                                           Giovannini Barrier 1
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                                                                       SWIFT for Investment Managers




Year        Users       Countries     Messages          Highlights

2007        8,332          208         3.5 billion      Regulators become eligible to join SWIFT

Q3 2008     8,721          209        >3.2 billion



10.3      Sibos
ISibos is the world’s premier financial services forum, attracting the industry’s leading
figures and firms. Sibos draws over 8,000 participants from the financial industry, and
some 200 application and middleware vendors, system integrators and consultants. It
takes place annually, typically a week in September or October, at a different venue
around the world.
Sibos brings to the fore issues that are challenging the financial services industry, now
and in the future – new technologies, new processes, new client expectations, new and
unexpected alliances and ever-growing pressures for greater efficiency and security.
One of the key advantages of Sibos is the ample opportunity attendees have to network.
Sibos delegates cover the range of financial markets and IT, making them the ideal
audience for focused marketing activities. IMs, broker-dealers, custodians, treasury
specialists, banks, and operations professionals, all see Sibos as an excellent investment
in time.
The securities industry has taken an increasingly high profile role at Sibos. In recent years
we have seen a rising number of IMs represented at Sibos, not only in terms of
attendance, but also in terms of participation on various panel discussions and as
keynote speakers.
Appendix
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A. Details of standardised messaging
A.1. FIN Standards
Category 1             Customer Payments & Cheques
Customer payments are made using the Category 1 messages. These deal with
payments, or information about payments, in which the ordering party or the beneficiary,
or both, are not financial institutions.


MT             MT Name                                 Purpose

101            Request for Transfer                    Requests to debit a customer’s account
                                                       held at another institution

101 / 102+     Multiple Customer Credit Transfer       Conveys multiple payment instructions between
                                                       financial institutions

103 / 103+     Single Customer Credit Transfer         Instructs a funds transfer
103 REMIT

104            Direct Debit and Request for            Conveys direct debit instructions and
               Debit Transfer Message                  requests for direct debits between financial
                                                       institutions

105            EDIFACT Envelope                        An envelope which conveys a 2k
                                                       EDIFACT message

107            General Direct Message                  To order the debit of a debtor’s account and
                                                       to collect payment from this account

110            Advice of Cheque(s)                     Advises or confirms the issuance of a
                                                       cheque to the drawee bank

111            Request for Stop Payment of             Requests the drawee bank to stop
               a Cheque                                payment of a cheque

112            Status of a Request for Stop            Indicates action(s) taken in attempting
               Payment of a Cheque                     to stop payment of a cheque



Messages most used by investment managers:




                                      Request for transfer - MT 101

                               Single customer credit transfer - MT 103
  Investment                                                                                  Financial
   Manager                                                                                   Institution
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SWIFT for Investment Managers




MT 101 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 / instructing party,
and is subsequently received by the receiving financial institution and processed by the
receiving financial institution or the account servicing financial institution.
It is used to move funds from the ordering customer’s account(s) serviced at the receiving
financial institution or at the account servicing institution, or from an account(s) owned by
the ordering customer whom the instructing customer has explicit authority to debit, e.g.
a subsidiary account.
The MT 101 can be used to order the movement of funds:
      between ordering customer accounts, or
      in favour of a third party, either domestically or internationally.

MT 103 Single Customer Credit Transfer — This message type is sent by or on behalf
of the financial institution of the ordering customer, directly or through (a)
correspondent(s), to the financial institution of the beneficiary customer.
It is used to convey a funds transfer instruction in which either the ordering customer, the
beneficiary customer, or both, are non-financial institutions from the perspective of the
Sender.


Category 2                Financial Institution Transfers
Financial institution transfers are made using the Category 2 messages. These deal with
payments, or information about payments, in which all parties in the transaction are
financial institutions. The flows shown in this section represent the main use of each
message.

MT            MT Name                                 Purpose

200           Financial Institution Transfer for      Requests the movement of the Sender’s
              its Own Account                         funds to its account at another
                                                      financial institution

201           Multiple Financial Institution          Multiple of the MT 200
              Transfer for its Own Account

202           General Financial Institution           Requests the moment of funds between
              Transfer                                financial institutions

203           Multiple General Financial              Multiple of the MT 202
              Institution Transfer

204           Financial Markets Direct                Claims funds from SWIFT member banks
              Debit Message

205           Financial Institution Transfer          Futher transmits a transfer request domestically
              Execution
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MT         MT Name                                     Purpose

207        Request for Financial                       Requests to debit an ordering financial
           Institution Transfer                        institution’s account held at the
                                                       receiving financial institution or the
                                                       account servicing financial institution

210        Notice to Receive                           Notifies the Receiver that it will receive
                                                       funds for the Sender’s account

256        Advice of Non-Payment of Cheques            Informs the Sender of one or more non-
                                                       payments of one or more truncated
                                                       cheques. It may also be used to
                                                       specify dishonoured items that result
                                                       in reversing a previous payment settlement



Messages most used by investment managers:


                     Financial Institution Transfer for its Own Account - MT 200

                 Multiple Financial Institution Transfer for its Own Account - MT 201

                           General Financial Institution Transfer - MT 202

                       Multiple General Financial Institution Transfer - MT 203
  Investment                                                                                   Financial
   Manager                Financial Institution Transfer Execution - MT 205                   Institution

                         Request for Financial Institution Transfer - MT 207

                                    Notice to Receive - MT 210




MT 200 Financial Institution Transfer for its Own Account — This message type is
sent by an account owner to one of its account servicing institutions. It is used to
request the movement of funds from an account that the Receiver services for the Sender
to an account that the Sender has, in the same currency, with another financial institution.
MT 201 Multiple Financial Institution Transfer for its Own Account — This multiple
message type is sent by an account owner to one of its account servicing institutions. It
is used to request the movement of funds from an account that the Receiver services for
the Sender to several accounts that the Sender has, in the same currency, with other
financial institutions.
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MT 202 General Financial Institution Transfer — 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. 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 a specified institution.
MT 203 Multiple General Financial Institution Transfer — This multiple message is
sent by or on behalf of the ordering institution directly, or through correspondent(s), to the
financial institution(s) of several beneficiary institution(s). The message contains several
transactions. It is used to order the movement of funds to each beneficiary institution.
This message may also contain order(s) for the movement of the Sender’s own funds in
favour of itself. This is the case when the Receiver services multiple accounts for the
Sender and the funds are to be transferred between these accounts. In addition, it can
also 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 a specified institution.
MT 205 Financial Institution Transfer Execution — This message is sent by the
Receiver of a category 2 transfer message, i.e. MT 200, 201, 202, 203 or 205, directly or
through correspondent(s), to another financial institution located in the same country as
the Sender. It is used to further transmit a funds transfer instruction domestically.
MT 207 Financial Institution Transfer — This message is used to move funds from the
ordering financial institution’s account, serviced at the receiving financial institution or at
the account servicing institution, or from an account(s) owned by the ordering institution
for which the initiating institution has explicit authority to debit, eg, a subsidiary account.
MT 210 Notice to Receive — 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.
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Category 3         Treasury Markets - Foreign Exchange, Money Markets
                   and Derivatives

MT      MT Name                               Purpose

300     Foreign Exchange Confirmation         Confirms information agreed to in the
                                              buying/selling of two currencies

303     Forex/Currency Option Allocation      Instructs the allocation of a block
        Instruction                           trade (forex or currency option)

304     Advice/Instruction of a Third Party   Advises of or instructs settlement of a
        Deal                                  third party foreign exchange deal

305     Foreign Currency Option               Confirms information agreed to in the
        Confirmation                          buying and selling of vanilla options
                                              on currencies

306     Foreign Currency Option               Confirms information agreed to in the
        Confirmation                          buying and selling of exotic options
                                              on currencies

307     Advice/Instruction of a Third         Advises of or instructs settlement of a
        Party FX Deal                         third party foreign exchange deal

320     Fixed Loan/Deposit Confirmation       Confirms the terms of a contract relative
                                              to a fixed loan/deposit transaction

321     Instruction to Settle a Third Party   Advises the trade details and instructs the
        Loan/Deposit                          the settlement of a fixed term loan/
                                              deposit done with a third party
                                              financial institution

330     Call/Notice                           Confirms the terms of a contract relative to
        Loan/Deposit Confirmation             to a call/notice loan/deposit transaction

340     Forward Rate Agreement                Confirms the details of a forward rate agreement
        Confirmation

341     Forward Rate Agreement                Confirms the settlement details of a forward
        Settlement Confirmation               rate agreement

350     Advice of Loan/Deposit                Advises of a loan/deposit interest payment
        Interest Payment

360     Single Currency Interest Rate         Confirms the details of a single currency
        Derivative Confirmation               interest rate derivative swap, cap, collar
                                              or floor

361     Cross Currency Interest Rate          Confirms the details of a cross currency
        Swap Confirmation                     interest rate swap transaction

362     Interest Rate Reset/Advice            Confirms or advises the reset rates of the floating
        of Payment                            interest rate(s) in a single or cross-currency
                                              interest rate derivative transaction and/or
                                              the payment of interest at the end of an
                                              interest period
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MT            MT Name                                       Purpose

364           Single Currency Interest Rate                 Confirms the details of the partial or
              Derivative Termination/                       full termination or recouponing of
              Recouponing Confirmation                      a single currency interest rate
                                                            swap, cap, collar or floor

365           Cross Currency Interest Rate                  Confirms the details of the partial or
              Swap Termination/                             full termination or recouponing of
              Recouponing Confirmation                      a cross currency interest rate swap

380           Foreign Exchange Order                        Orders to purchase or sell a specific
                                                            amount of a certain currency

381           Foreign Exchange Order                        Confirms the execution of an FX Order
              Confirmation                                  previously sent



Category 3 - Post-trade/Pre-settlement: Foreign Exchange
MT 300 Foreign Exchange Confirmation - This message is exchanged by or on behalf
of the institutions who have agreed to a foreign exchange contract. This message may
also be sent by a money broker to the two parties for which the broker arranged the deal.
The message is also used when confirming deals settling through CLS.

                                        Confirm details of a new contract

                                  Confirm an exercised foreign currency option

                          Confirm an amendment to a previously sent confirmation
  Investment                                                                                         Broker /
  Manager or                          Cancel a previously sent confirmation                           Dealer
     CLS                                                                                             or CLS



MT 303 Forex / Currency Option Allocation Instruction - This message is sent by an
instructing party (e.g. IM) to an executing broker to instruct the allocation of either a block
foreign exchange trade or a block currency option.
The MT 303 contains both the terms of the block trade and the individual allocations.
The executing party will reply by sending separate MT 300 Foreign Exchange
Confirmations confirming each individual allocation.


                                         Instruct the allocation of a deal

                                Cancel / amend block trade and set of allocations

   Investment                       Amend a number of individual allocations                         Broker /
    Manager                                                                                           Dealer
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MT 304 Advice / Instruction of a Third Party Deal - This message is sent by an IM to a
custodian bank as an advice of / instruction to settle a third party foreign exchange deal.
It is also used for deals settling through CLS.

                         Advice / instruction to settle third party FX deal

                          Amend a previously sent advice / instruction

  Investment               Cancel a previously sent advice / instruction                   Custodian or
   Manager                                                                                    CLS



MT 307 Advice / Instruction of a Third Party FX Deal - This message is sent by an IM
to a custodian bank as an advice of / instruction to settle a third party foreign exchange
deal. It is a newer, ISO 15022 version of the MT 304 message.


                                 Advice of details of a new deal

                                    Instruction to settle a deal

  Investment               Cancel a previously sent advice / instruction                    Custodian
   Manager




MT 380 Foreign Exchange Order - This message type is sent by an IM to a custodian
bank as an order to purchase or sell a specific amount of a certain currency.


                      Order to buy / sell specific amount of foreign currency

                         Copy an order sent by other means ( e.g. fax )
  Investment                                                                                Custodian
   Manager
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MT 381 Foreign Exchange Order Confirmation - This message type is sent by a
custodian bank to an IM to confirm the execution of a FX Order previously sent by the
fund manager.

                                 Confirm execution of foreign exchange order

                                     Cancel a previously sent confirmation

   Investment                    Copy an order sent by other means ( e.g. fax )      Custodian
    Manager




Category 3 - Post-trade/Pre-settlement: Money markets
MT 320 Fixed Loan / Deposit Confirmation - This message is exchanged to confirm a
fixed term loan / deposit contract. This message is exchanged by or on behalf of the
institutions who have agreed to a fixed term loan / deposit contract. A money broker may
also send this message to the two parties for which he arranged the deal. It is typically
followed by the MT 321 message (see below).

                                      Confirm / notify details of a contract

                                     Amend a previously agreed contract

                                     Cancel a previously sent confirmation

   Investment                   Confirm / notify a rolled over / renewed contract     Broker /
    Manager                                                                            Dealer
                                   Confirm / notify the maturity of a contract




MT 321 Instruction to Settle a Third Party Loan / Deposit - This message is sent by
an IM to the fund’s custodian to advise the trade details and instruct the settlement of a
fixed term loan / deposit done with a third party financial institution. It typically follows the
MT 320 message (see above).


                                    Notify / instruct to settle a new contract

                                  Notify of a rollover / renovation of a contract

                                        Notify the maturity of a contract
   Investment                                                                        Custodian
    Manager                           Cancel a previously sent instruction
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MT 330 Call / Notice Loan / Deposit Confirmation - This message is exchanged to
confirm a call / notice loan / deposit contract. It is sent by or on behalf of the institutions
that have agreed to a call / notice loan / deposit contract.


                                Confirm / notify details of a contract

                           Amend / cancel a previously agreed contract

                        Increase / decrease in account balnace of a contract

  Investment              Notify changes in interest rate / period of notice                   Broker /
   Manager                                                                                      Dealer
                          Notify the closing of a contract (final redemption)




MT 350 Advice of Loan / Deposit Interest Payment - It is used to inform that an
interest amount has been paid to the account of the beneficiary with the receiving agent
mentioned in the message. It is sent by or on behalf of the institution who has borrowed
cash from another institution.


                                   Notification of interest payment

                                  Amend a previously sent advice

                                  Cancel a previously sent advice
  Investment                                                                                   Broker /
   Manager                                                                                      Dealer




Category 3 - Post-trade/Pre-settlement: OTC Derivatives
MT 303 Forex / Currency Option Allocation Instruction - This message is sent by an
instructing party (e.g. IM) to an executing broker to instruct the allocation of either a block
foreign exchange trade or a block currency option.
The MT 303 contains both the terms of the block trade and the individual allocations.
The executing party will reply by sending separate MT 300 Foreign Exchange
Confirmations confirming each individual allocation.

                                   Instruct the allocation of a deal

                         Cancel / amend block trade and set of allocations

  Investment                 Amend a number of individual allocations                          Broker /
   Manager                                                                                      Dealer
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MT 305 Foreign Currency Option Confirmation - This message type is exchanged
between the financial institutions that have agreed to a foreign currency option contract.
It is used to confirm the details of:
      a new contract between the parties
      an amendment to a previously agreed contract
      the cancellation of a confirmation
      the surrender of an option by the buyer (holder) to the seller (grantor) for
      compensation.

                                      Confirm details of a new contract

                                  Surrender of an option for compensation

                          Confirm an amendment to a previously sent confirmation
   Investment                                                                           Broker /
    Manager                         Cancel a previously sent confirmation                Dealer




MT 306 Foreign Currency Option Confirmation - This message is exchanged to
confirm a foreign currency option contract. The confirmed transaction is covered by an
ICOM (International Currency Option Master from the British Bankers’ Association), ISDA
(International Swaps and Derivatives Association), Deutsche Rahmenvertrag, IFEMA,
FEOMA or AFB (Association Française de Banques) Master Agreement. These
agreements are either signed or under negotiation. The message also caters for deals
that are not covered by the above agreements.
The message is used to confirm / notify the details of:
    a new contract between the parties,
    an amendment to a previously agreed contract,
    the cancellation of a confirmation,
    a trigger event: knock-in / knock-out of an option, hitting of a trigger level,
    the close out of an option.
This message is exchanged by or on behalf of the institutions who have agreed to a
foreign currency option contract. A money broker may also send this message to the two
parties for which he arranged the deal.

                                     Confirm / notify details of a contract

                                     Amend a previously agreed contract

   Investment                       Cancel a previously sent confirmation               Broker /
    Manager                                                                              Dealer
                            Trigger event: knock-in, knock-out, hitting trigger level

                                              Close out an option
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MT 340 Forward Rate Agreement Confirmation - This message is exchanged by or on
behalf of the institutions or corporates, who have agreed to a forward rate agreement
(FRA).
The confirmed transaction is covered by an ISDA, Deutscher Rahmenvertrag für
Finanztermingeschäfte, FRABBA (British Bankers’ Association) or AFB Master
Agreement. These agreements are either signed or under negotiation. A money broker
may also send this message to the two parties for which he arranged the deal.
The message is used to confirm / notify the details of:
    a new contract between the parties
    an amendment to a previously agreed contract
    the cancellation of a confirmation.


                            Confirm / notify details of a new contract

                              Amend a previously agreed contract

  Investment                 Cancel a previously sent confirmation                      Broker /
   Manager                                                                               Dealer




MT 341 Forward Rate Agreement Settlement Confirmation - This message is
exchanged by or on behalf of the institutions that have agreed to a forward rate
agreement (FRA).
It is used to confirm the settlement details of the forward rate agreement when the
settlement rate has been fixed on the fixing date.

                          Confirm settlement details of a new contract

                         Amend a previously agreed settlement message

  Investment              Cancel a previously sent settlement message                   Broker /
   Manager                                                                               Dealer




MT 360 Single Currency Interest Rate Derivative Confirmation - This message is
exchanged by or on behalf of the institutions, which have agreed to a single currency
interest rate swap, a cap, a collar or a floor. The confirmed transaction is covered by a
BBAIRS (British Bankers’ Association Interest Rate Swap), ISDA, Deutscher
Rahmenvertrag für Finanztermingeschäfte or AFB Master Agreement.
The message also covers deals which are not part of the above agreements, in which
case, the two parties must have another bilateral agreement in place. It may also be sent
by a money broker to the two parties for which the broker arranged the deal.
The MT 360 is used to confirm the details of a new transaction between the parties.
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                                     Confirm details of a new transaction

                                    Amend a previously sent confirmation

   Investment                        Cancel a previously sent confirmation                Broker /
    Manager                                                                                Dealer



MT 361 Cross Currency Interest Rate Swap Confirmation - This message is
exchanged by or on behalf of the institutions who have agreed to a cross currency
interest rate swap covered by a BBAIRS, Deutscher Rahmenvertrag für
Finanztermingeschäfte or an ISDA Master Agreement.
The message also covers deals which are not part of the above agreements, in which
case, the two parties must have another bilateral agreement in place, except under AFB
Master (until the AFB does define the interbank confirmation for cross currency swaps,
the MT 361 cannot be used to confirm such transactions).
This message may also be sent by a money broker to the two parties for which the
broker arranged the deal. The message is used to confirm the details of a new
transaction between the parties.


                                     Confirm details of a new transaction

                                    Amend a previously sent confirmation

   Investment                        Cancel a previously sent confirmation                Broker /
    Manager                                                                                Dealer




MT 362 Interest Rate Reset / Advice of Payment - This message is exchanged by or
on behalf of the financial institutions, who have agreed to a single or cross currency
interest rate derivative transaction, including caps, collars and floors.
This message may be used to:
      advise the details of the determination of the floating interest rate(s)
      advise the details of the payment of interest at the end of an interest period

                          Advise details of the determination of floating rate interest

                        Advise details of payment of interest at end of interest period

   Investment                   Cancel / amend a previously sent reset / advice           Broker /
    Manager                                                                                Dealer
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MT 364 Single Currency Interest Rate Derivative Termination / Recouponing
Confirmation - This message is exchanged by or on behalf of the institutions who have
agreed to the termination, partial termination or recouponing of a single currency interest
rate swap, a cap, a collar or a floor. The terminated / recouponed transaction is covered
by a BBAIRS, ISDA or AFB or another bilateral agreement.
This message may be used to:
    confirm the details of the partial or full termination of an existing transaction
    confirm the details of the recouponing of an existing transaction


                      Confirm details of partial / full termination of transaction

                           Confirm details of recouponing of transaction

  Investment        Cancel / amend a previously sent termination / recouponing                 Broker /
   Manager                                                                                      Dealer




MT 365 Cross Currency Interest Rate Swap Termination / Recouponing
Confirmation - This message is exchanged by or on behalf of the institutions who have
agreed to the termination, partial termination or recouponing of a cross currency interest
rate swap.
The terminated / recouponed transaction is covered by a BBAIRS, ISDA or another
bilateral agreement. The message may be used to:
    confirm the details of the partial or full termination of an existing transaction
    confirm the details of the recouponing of an existing transaction


                      Confirm details of partial / full termination of transaction

                           Confirm details of recouponing of transaction

  Investment        Cancel / amend a previously sent termination / recouponing                 Broker /
   Manager                                                                                      Dealer
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Category 5                  Securities Markets
MT       MT Name                             Purpose

500      Instruction to Register             Instructs the registration, deregistration or
                                             reregistration of a financial instrument
                                             at the registration provider

501      Confirmation of Registration or     Confirms the registration, deregistration or
         Modification                        reregistration of a beneficial owner or
                                             shareholder with the registration provider

502      Order to Buy or Sell                Instructs the purchase or sale of a given
                                             quantity of a specified financial
                                             instrument under specified conditions

503      Collateral Claim                    Requests new or additional collateral, or
                                             the return or recall of collateral

504      Collateral Proposal                 Proposes new or additional collateral

505      Collateral Substitution             Proposes or requests the substitution of
                                             collateral held

506      Collateral and Exposure Statement   Provides the details of the valuation of both
                                             the collateral and the exposure

507      Collateral Status and Processing    Advises the status of a collateral claim, a
         Advice                              collateral proposal, or a proposal/request
                                             for collateral substitution

508      Intra-Position Advice               Reports on the movement of securities
                                             within the holding

509      Trade Status Message                Provides information on the status of a
                                             previously executed trade

510      Registration Status and             Advises the status of a registration
         Processing Advice                   instruction or modification

513      Client Advice of Execution          Provides brief and early information about
                                             a securities deal, e.g. a block trade that
                                             is to be allocated before final confirmation

514      Trade Allocation Instruction        Instructs the allocation of a block trade

515      Client Confirmation of Purchase     Provides a detailed accounting of financial
         or sale                             instruments purchased or sold by the
                                             Sender on behalf of the Receiver or its
                                             client. It may also convey the payment
                                             details of the purchase or sale. It may also
                                             be sent by, or via, an ETC service provider

516      Securities Loan Confirmation        Confirms the details of a securities loan,
                                             including collateral arrangements. It may
                                             also confirm the details of a partial recall
                                             or return of securities previously out on loan

517      Trade Confirmation Affirmation      Positively affirms the details of a previously
                                             received confirmation/contract note

518      Market-Side Securities Trade        Confirms the details of a trade and where
         Confirmation                        necessary, its settlement to a trading counterparty
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MT    MT Name                               Purpose

519   Modification of Client Details        instructs the modification of client details
                                            at the registration provider

524   Intra-Position Instruction            Instructs the movement of securities within
                                            the holding

526   General Securities Lending/           Requests the borrowing of securities or notifies
      Borrowing Message                     the return or recall of securities previously out
                                            on loan. It may also be used to list securities
                                            available for lending

527   Triparty Collateral Instruction       Performs a specific action on a collateral
                                            management transaction

530   Transaction Processing Command        Requests the modification of a processing
                                            indicator or other non-matching information

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

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

537   Statement of Pending Transaction      Provides details of pending increases and decreases
                                            in securities within the holding during a specified
                                                        period

538   Statement of Intra-Position Advices   Provides details of increases and decreases
                                            in securities within the holding during a specified
                                            period

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

541   Receive Against Payment               Instructs a receipt of financial instruments against
                                            payment. It may also be used to request a
                                            cancellationor pre-advise an instruction

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

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

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

545   Receive Against Payment               Confirms a receipt of financial instruments against
      Confirmation                          payment. It may also be used to cancel or reverse
                                            a confirmation
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MT       MT Name                            Purpose

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

547      Deliver Against Payment            Confirms a delivery of financial instruments against
         Confirmation                       payment. It may also be used to cancel or reverse
                                            a confirmation

548      Settlement Status and              Advises the status of a settlement instruction
         Processing Advice                  or replies to a cancellation request

549      Request for Settlement/            Requests a statement or a status message
         Status Advice

558      Triparty Collateral Status and     Provides validation results and status advice
         and Processing Advice              re collateral instructions and proposed
                                            collateral movements

559      Paying Agent’s Claim               Claims reimbursement of income or redemption
                                            proceeds, or a combination of both

564      Corporate Action Notification      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, e.g.
                                            entitlement calculation

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

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

567      Corporate Action Status and        Indicates the status, or change in status, of a
         Processing Advice                  corporate action-related transaction previously
                                            instructed by, or executed on behalf of, the
                                            account owner

568      Corporate Action Narrative         Provides complex instructions or narrative details
                                            relating to a corporate action event

569      Triparty Collateral and Exposure   Provides the details of the valuation of both the
         Statement                          collateral and the exposure

574      IRS 1441 NRA-IRS                   Provides owner or pooled income information
         Beneficial Owners’ List            for a period of time arranged between the
                                            intermediary and the withholding agent

574      IRS 1441 NRA-Form W8-BEN           Certifies the foreign status of a beneficial
                                            owner for United States tax withholding

575      Report of Combined Activity        Reports on all securities and cash activity
                                            for a given combination of safekeeping and
                                            cash accounts
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MT     MT Name                                   Purpose

576    Statement of Open Orders                  Provides details of orders to buy or to sell
                                                 financial instruments, as at a specified
                                                 date, which have been accepted by the Sender,
                                                 but which have not yet been executed

577    Statement of Numbers                      Provides certificates numbers of securities

578    Statement Allegement                      Advises the account owner that a counterparty
                                                 has alleged a settlement instruction on the ?
                                                 account owner’s account

579    Certificate Numbers                       Replaces or supplements the ‘certificate numbers’
                                                 field in a primary message, e.g. MT 577

581    Collateral Adjustment Message             Claims or notifies a change in the amount of
                                                 collateral held against securities out on loan
                                                 or for other reasons

586    Statement of Settlement                   Provides details of pending settlement allegements
       Allegements



Category 5 - Pre-trade / Trade: FIN
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Broker / Dealer) to instruct a buy or sale of a security, to provide the status of the
trade, and to confirm the trade between the two parties.
MT 502 Order to Buy or Sell - To instruct the purchase or sale of a given quantity of a
particular financial instrument.

                                           Order to buy or sell

                                 Request cancellation of previous order

                                     Replace previously sent order
  Investment                                                                                      Broker /
   Manager                                 Duplicate an order                                      Dealer




MT 509 Trade Status - To indicate the status of a particular trade.


                                         Advise status of Trade

                                 Cancel previously sent advise of status

  Investment                      Reject previously received message                           Broker /
   Manager                                                                                      Dealer
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MT 513 Client Advice of Execution - To provide brief and early information to the
Instructing Party about a deal executed at its instruction. This advice of execution applies
to a deal that cannot yet be fully confirmed (e.g. a block trade which is to be allocated).


                                                Advice of execution

                                        Resend and advice previously sent

   Investment                       Cancel previously sent advice of execution         Broker /
    Manager                                                                             Dealer



Category 5 - Post-trade / Pre-settlement
MT 514 Trade Order Allocation - To instruct the allocation of a block trade. Each
message can only contain one allocation. Settlement details are optional and can be
provided where standing instructions do not apply, or are not available.

                                         Instruct allocation of block trade

                            Request cancellation of previous allocation instruction

                                  Provide pre-allocation details linked to an order
   Investment                                                                          Broker /
    Manager                           Duplicate an allocation previouslt sent           Dealer




MT 515 Client Confirmation of Purchase or Sale - To confirm the details of a purchase
or sale. It is also used to provide details on the payment side of the transaction. Where
legally accepted, this message serves as a binding electronic contract note.

                                        Confirm details of purchase or sale

                                Request cancellation of previous client confirmation

   Investment                        Duplicate a confirmation previously sent          Executing
    Manager                                                                              Party
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MT 517 Trade Confirmation Affirmation - To positively affirm the details of a previously
received confirmation or contract note. The trade confirmation details that are affirmed
bind the Sender and Receiver.




                      Positive affirmation of previously received confirmation

  Investment                                                                               Executing
   Manager                                                                                   Party



Confirmation
This is sent by the executing party to the IM to confirm the booking of a trade at the
individual account level.


                            Confirm booking of trade at account level

                                  Cancel previously sent confirm

  Investment                     Replace previously sent confirm                           Executing
   Manager                                                                                   Party



Confirmation Ack
This is sent by the IM to the executing party to affirm or reject the confirmation message.


                                 Affirm confirmation of allocation

                                   Reject previously sent affirm
  Investment                                                                                Broker /
   Manager                                                                                   Dealer



Allocation Instruction
This is sent by the IM to the executing party, and follows up New Order before or after the
trade is filled. It is used to indicate how a trade is allocated into specific accounts.



                          Acknowledge receipt of allocation instruction

                              Report errors in allocation instruction
  Investment                                                                                Broker /
   Manager                                                                                   Dealer
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Category 5 - Clearing and Settlement
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Custodian) or service provider (e.g. electronic trade confirmation provider) to provide
settlement instructions, and confirmations of settlement.
MT 508 Intra-Position Advice - To confirm the increase or decrease in the number of
securities of a certain status within a holding (e.g. movements from one sub-balance to
another sub-balance within the same account).

                                               Intra-position advice

                                            Intra-position confirmation

                                  Request cancellation of previously sent advice
   Investment
                                                                                      Custodian
    Manager                            Duplicate an advice previously sent




MT 524 Intra-Position Instruction - To instruct the movement of securities within the
holding (e.g. re-registration of securities from one sub-balance to another sub-balance).

                                  Instruct intra-position movement of securities

                                Request cancellation of previously sent instruction

   Investment                        Duplicate an instruction previously sent
                                                                                      Custodian
    Manager




MT 540 Receive Free Instruction - To instruct the receipt of financial instruments, free of
payment, from a specified party.

                                 Instruct receipt of securities “free of payments”

                                     Pre-advise of a forthcoming instruction

                                Request cancellation of previously sent instruction
   Investment
                                                                                      Custodian
    Manager                          Duplicate an instruction previously sent
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MT 541 Receive Against Payment Instruction - To instruct the receipt of financial
instruments, against payment, from a specified party.

                         Instruct receipt of securities “against payments”

                              Pre-advise of a forthcoming instruction

                        Request cancellation of previously sent instruction
  Investment
                                                                                            Custodian
   Manager                   Duplicate an instruction previously sent




MT 542 Deliver Free Instruction - To instruct a delivery of financial instruments, free of
payment, to a specified party.

                         Instruct receipt of securities “free of payments”

                             Pre-advise of a forthcoming instruction

                        Request cancellation of previously sent instruction
  Investment
                                                                                           Custodian
   Manager                   Duplicate an instruction previously sent




MT 543 Delivery Against Payment Instruction - To instruct a delivery of financial
instruments, against payment, to a specified party.

                         Instruct receipt of securities «against payments»

                             Pre-advise of a forthcoming instruction

                        Request cancellation of previously sent instruction
  Investment                                                                                Custodian
   Manager                   Duplicate an instruction previously sent




MT 544 Receive Free Confirmation - To confirm a receipt of financial instruments, free
of payment, from a specified party.

                         Instruct receipt of securities «against payments»

                             Pre-advise of a forthcoming instruction

                        Request cancellation of previously sent instruction
  Investment                                                                                Custodian
   Manager                   Duplicate an instruction previously sent
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MT 545 Receive Against Payment Confirmation - To confirm the receipt of financial
instruments against payment from a specified party.


                                Confirm a receipt of securities «against payments»

                            Pre-confirm a receipt of securities «against payments»

                                             Confirm partial settlement

                                Request cancellation of previously sent confirmation   Custodian
   Investment
    Manager
                                      Duplicate a confirmation previously sent




MT 546 Deliver Free Confirmation - To confirm a delivery of financial instruments, free
of payment, from a specified party.


                                Confirm a delivery of securities «free of payments»

                            Pre-confirm a delivery of securities «free of payments»

                                             Confirm partial settlement

                                Request cancellation of previously sent confirmation   Custodian
   Investment
    Manager
                                      Duplicate a confirmation previously sent




MT 547 Deliver Against Payment Confirmation - To confirm a delivery of financial
instruments against payment to a specified party.


                                Confirm a delivery of securities «against payments»

                            Pre-confirm a delivery of securities «against payments»

                                             Confirm partial settlement

                                Request cancellation of previously sent confirmation   Custodian
   Investment
    Manager
                                      Duplicate a confirmation previously sent
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MT 548 Settlement Status and Processing Advice - To advise the status of a
settlement instruction, or as a reply to a cancellation request previously sent by the
Account Owner.


                         Advice status of a previously received instruction

                        Report on future settlement or forward transaction

                          Request cancellation of previously sent advice
  Investment                                                                                Custodian
                              Duplicate a statement previously sent
   Manager




MT 578 Settlement Allegement - To advise the Account Owner that a Counterparty has
alleged a settlement instruction against the Account Owner’s account with the Account
Servicer, and that the Account Servicer could not find the corresponding instruction from
the Account Owner.


                                      Settlement allegement

                       Request cancellation of a previously sent allegement

  Investment             Duplicate a settlement allegement previously sent                  Custodian
   Manager



Category 5 - Securities Reporting
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Custodian) to provide details of activity and holdings in an account.
MT 535 Statement of Holdings - To report on the quantity and identification of securities
and other holdings which the Account Servicer holds for the Account Owner at a
specified moment in time.


                                      Statement of holdings

                        Request cancellation of a previously sent statement

  Investment                  Duplicate a statement previously sent                         Custodian
   Manager



MT 536 Statement of Transactions - To provide the details of any increases and / or
decreases of holdings, which may have occurred over a specified period of time, for all,
or a selected quantity of securities in the requested safekeeping account which the
Account Servicer holds for the Account Owner.
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                                            Statement of transactions

                                Request cancellation of a previously sent statement

                                      Duplicate a statement previously sent           Custodian
   Investment
    Manager


MT 537 Statement of Pending Transactions - To provide the Account Owner with the
details of pending increases and / or decreases in the quantity of holdings, at a specified
moment in time. The message may contain details for all, or a selected quantity of
securities for a specified safekeeping account. It may also give all, or a selected number
of reasons why the transaction is pending.



                                        Statement of pending transactions

                                Request cancellation of a previously sent statement

                                      Duplicate a statement previously sent           Custodian
   Investment
    Manager




MT 538 Statement of Intra-Position Advices - To provide the Account Owner with the
details of any intra-position transfers (movement of securities within a holding) for a
specified period of time, for all, or selected securities in a specified safekeeping account.



                                        Statement of intra-position advices

                                Request cancellation of a previously sent statement

                                      Duplicate a statement previously sent           Custodian
   Investment
    Manager
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MT 549 Request for Statement / Status Advice - To request a statement or status
messages (e.g. MT 509, 535, 536, 537, 538, 575, 576, 584, 586, 589). The request for
a statement / status advice can be used as a query message to gather information for
one account, at a given date or period of time.




                             Request for statement / status advice

  Investment                                                                               Custodian
   Manager



MT 575 Report of Combined Activity - To report on all securities and cash activity for a
given combination of safekeeping and cash accounts. This message is intended to
provide a summary of all cash and securities activity for a given safekeeping account
linked to one (or multiple) cash accounts, or for a given cash account linked to multiple
safekeeping accounts.


                                 Statement of combined activity

                       Request cancellation of a previously sent statement

                             Duplicate a statement previously sent                         Custodian
  Investment
   Manager




MT 576 Statement of Open Orders - To identify orders which have not yet been fully
executed.


                                       Send a statement

                       Request cancellation of a previously sent statement

                             Duplicate a statement previously sent                          Broker /
  Investment
   Manager                                                                                   Dealer
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MT 586 Statement of Settlement Allegements - To provide the details of pending
settlement allegements, for all or selected securities in a specified safekeeping account,
for a given point in time.

                                  Statement of pending settlement allegements

                                Request cancellation of a previously sent statement

                                      Duplicate a statement previously sent           Custodian
   Investment
    Manager



Category 5 - Corporate Actions / Entitlements
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Custodian) to provide details of corporate actions affecting a particular account, and
instructions on voluntary events.

                                      Corporate Action Notification - MT 564

                                      Corporate Action Instruction - MT 565

                                        Corporate Confirmation - MT 566
   Investment                                                                         Custodian
    Manager                Corporate Action Status & Processing Advice - MT 567

                                       Corporate Action Narrative - MT 568




MT 564 Corporate Action Notification - To provide an Account Owner with the details
of a corporate action event. It may also include possible elections or choices available to
the Account Owner. The MT 564 can initially be sent as a preliminary advice, and
subsequently replaced by another MT 564 with complete or confirmed information. The
message will also be used to provide the Account Owner with a calculation of the impact
a corporate action event will have on a safekeeping, or cash, account.

                                              Preliminary notification

                                       Replace a previously sent notification

                                   Request cancellation of previous notification
   Investment                                                                         Custodian
    Manager                                Withdrawal of offer or event

                            Replace a previously sent notification with entitlement

                                               Reminder of deadline

                                      Duplicate of notification previously sent
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MT 565 Corporate Action Instruction - To provide the Account Servicer with
instructions on how the Account Owner wishes to proceed with a corporate action event.
Instructions include investment decisions regarding the exercise of rights issues, the
election of stock, or cash, when the option is available, and decisions on the conversion
or tendering of securities.

                                   Corporate Action Instruction

                           Request cancellation of previous instruction

                              Replace a previously sent instruction
  Investment                                                                              Custodian
   Manager                   Duplicate of instruction previously sent




MT 566 Corporate Confirmation - To confirm to the Account Owner that securities and
/ or cash have been credited / debited to an account, as the result of a corporate action
event.

                                  Corporate Action confirmation

                             Reverse a previously sent confirmation

  Investment                 Duplicate a confirmation previously sent                     Custodian
   Manager




MT 567 Corporate Action Status & Processing Advice - To advise the status, or a
change in status, of a corporate-action-related transaction previously instructed by, or
executed on behalf of, the Account Owner.


                                Advise status of corporate action

                               Duplicate an advice previously sent
  Investment                                                                             Custodian
   Manager


MT 568 Corporate Action Narrative - To provide complex instructions or narrative
details relating to a corporate action event.

                                   Corporate action narrative

                          Cancel a previously Corporate action narrative

  Investment            Duplicate a previously Corporate action narrative                Custodian
   Manager
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Category 5 - Collateral Management - Bi-lateral

                                                 Margin Calls

                                      Collateral Claim return - MT 503

                                       Claim new/additional - MT 503

                                                  Response

                                        Collateral proposal - MT 504

      Collateral                                                                             Collateral
                        Collateral Status and Processing Advice (Response) - MT 507
       Taker                                                                                  Giver
                                            Collateral adminstration

                                      Collateral Substitution - MT 505

                                Collateral and Exposure Statement - MT 506




                      Copy to third party                              Copy to third party



MT 503 Collateral Claim - This message is sent either by the collateral taker to the
collateral giver, or vice versa by the collateral giver to the collateral taker.
When sent by the taker, it is used to request new collateral at the initiation of an exposure,
and / or request additional collateral. When sent by the giver, it is used to request the
return of collateral, and / or recall the collateral upon the termination of an underlying
exposure.
MT 504 Collateral Proposal - This message is sent by the collateral giver to the
collateral taker to propose new collateral at the initiation of an exposure, and / or propose
additional collateral at variation of exposure.
MT 505 Collateral Substitution - This message is sent by the collateral giver to the
collateral taker to propose the substitution of collateral held. This message is also sent by
the collateral taker to the collateral giver to request the substitution of collateral held.
MT 506 Collateral And Exposure Statement - This message is sent either by the
collateral giver to the collateral taker, or by the collateral taker to the collateral giver. It is
used to provide the details of the valuation of both the collateral and the exposure.
MT 507 Collateral Status and Processing Advice - This message is sent by the
Receiver of a collateral claim, a collateral proposal or a proposal / request for collateral
substitution. It is used to advise the status of the received message.
It may also be used to:
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    reject or accept a claim, proposal, or the proposal / request of a collateral substitution
    advise the settlement details of proposed collateral

Category 5 - Collateral Management - Triparty




                               Triparty Collateral Instruction - MT 527

                         Triparty Collateral Status and Processing - MT 558
   Collateral                                                                                Try party
                        Triparty Collateral and Exposure Statement - MT 569
    Taker/                                                                                    Agent

     Giver


                  Copy to third party                             Copy to third party


MT 527 Tri-party Collateral Instruction - This message is sent by a trading party to its
tri-party agent as instruction to perform a specific action on a collateral management
transaction.
MT 558 Tri-party Collateral Status And Processing Advice - This message is sent by
a tri-party agent after the receipt of a collateral instruction from its client. In this message,
the Sender is the tri-party agent and the Receiver is either the collateral taker or the
collateral giver. This message provides valuation results as well as the status of the
collateral instruction and the status of the proposed collateral movements (cash and
securities).
MT 569 Tri-party Collateral and Exposure Statement - This message is sent by a tri-
party agent to both the collateral giver and the collateral taker to provide the details of the
valuation of both the collateral and the exposure:
    after all collateral movements have been affected to show the end (fixed) positions or,
    after settlement but taking into account future collateral management instructions
    (forecasting the M-to-M).

Category 5 - Securities Lending and Borrowing
Contrary to the previously described messages, the MT 516, MT 526 and MT 581 are
based on the ISO 7775 standard.
These messages are typically sent between a client (e.g. IM) and a financial institution
(e.g. Custodian) to provide lists of securities available for lending, request the borrowing of
a particular security, and confirm the details of a new securities loan.
MT 516 Securities Loan Confirmation - This message is sent from one financial
institution to another, both of which are involved in the lending of securities. It is used to
confirm the details of a new securities loan, a partial recall of securities previously out on
loan, a partial return of securities previously out on loan and the closeout of a securities
loan.
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                                           Confirm details of new loan

                                        Partial recall of securities on loan

                                        Partial return of securities on loan
      Lender                                                                            Borrower
                                           Close-out a securities loan




MT 526 General Securities Lending / Borrowing Message - This message type is sent
from one financial institution to another, both of which are involved in the lending of
securities. It is used to:
      list specified securities available for lending by the lender or its agent
      list specified securities no longer available for lending by the lender or its agent
      request the borrowing of a specified security from the lender or its agent
      notify the borrower or its agent of a partial or total return of the securities out on loan
      notify the lender or its agent of a partial or total return of the securities borrowed
      request the potential lender to hold the specified securities until further notice
      confirm that specified securities are being held
      request the potential borrower to confirm a securities loan or cancel a request to hold
      securities until further notice


                                 List securities available / not available for loan

                                      Request the borrowing of a security

                                 Notification of partial / total return of securities

                                Request / confirm a hold on securities to be lent
      Lender                                                                            Borrower
                                           Request a confirm of a loan

                                       Cancel a request to hold securities
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MT 581 Collateral Adjustment Message - This message is sent from one financial
institution to another, both of which are involved in a securities transaction for which
collateral has been provided (e.g. a securities loan). It is used to claim or notify an
increase or decrease to the collateral amount resulting from a change in the value of the
existing collateral amount relative to the securities on loan.



                           Claim / notify change to collateral amount


    Lender                                                                             Borrower
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Category 6                Treasury Markets - Precious Metals

MT            MT Name                                Purpose

600           Precious Metal Trade                   Confirms the details of a precious metal trade
              Confirmation                           and its settlement

601           Precious Metal Option                  Confirms the details of a precious metal option
              Confirmation                           contract

604           Precious Metal Transfer/               Instructs the Receiver to transfer by book-entry,
              Delivery Order                         or physically deliver, a specified type and quantity
                                                     of precious metal to a specified party

605           Precious Metal Notice                  Notifies the Receiver of an impending book-entry
              to Receive                             transfer or physical delivery of a specified type
                                                     and quantity of precious metal

606           Precious Metal Debit Advice            Advises the Receiver of a debit entry to a specified
                                                     metal account

607           Precious Metal Credit Advice           Advises the Receiver of a credit entry to a specified
                                                     metal account

608           Statement of a Metal Account           Provides the details of all bookings to a metal account

609           Statement of Metal Contracts           Identifies all outstanding metal contracts, as at a
                                                     specified date for which confirmations have been
                                                     exchanged



                                  Precious Metal Trade Confirmation – MT 600

                                 Precious Metal Option Confirmation – MT 601

                                Metal Fixed Loan/Deposit Confirmation – MT 620
                                                                                                 Broker /
                                     Statement of Metal Contract – MT609                          Dealer



   Investment         Metal Transfer/Delivery Order – MT 604 (When IM is Metal Seller)
    Manager
                         Metal Notice to Receive – MT 605 (When IM is Metal Buyer)

                            Metal Debit Advice – MT 606 (When IM is Metal Seller)

                           Metal Credit Advice – MT 607 (When IM is Metal Buyer)                 Custodian

                  Statement of Metal Account – MT 608 (When IM is Metal Buyer or Metal Seller)
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MT 600 Precious Metal Trade confirmation - This message type is exchanged
between the financial institutions which have agreed to a precious metal trade.
    It is used to confirm the details of:
    a new contract between the parties
    an amendment to a previously agreed contract
    the cancellation of a contract
    the settlement of a metal option which has been exercised.
    This message may also be exchanged to confirm the liquidation of a forward deal
MT 601 Precious Metal Option Confirmation - This message type is exchanged
between the financial institutions which have agreed to a precious metal option contract.
    It is used to confirm the details of:
    a new contract between the parties
    an amendment to a previously agreed contract
    the cancellation of a contract
    the surrender of an option by the buyer (holder) to the seller (grantor) for
    compensation.
MT 620 Metal Fixed Loan/Deposit Confirmation - This message is exchanged to
confirm a metal fixed term loan/deposit contract.
    It is used to confirm the details of:
    a new contract between the parties
    an amendment to a previously agreed contract
    the cancellation of a confirmation
    a rolled over/renewed contract between the parties
    the maturity of a contract
MT 609 Statement of Metal Contracts - This message is sent by a metal trader to its
counterparty. It is a listing of all undelivered spots and/or outstanding forward contracts,
and/or unexercised options, as at a specified date.
MT 604 Precious Metal Transfer/Delivery Order - This message is sent by the owner of
a metal account or its authorised agent to the metal account servicing institution. It is
used to instruct the Receiver to transfer by book entry, or physically deliver, specified
quantities of allocated or unallocated precious metal to a specified party.
MT 605 Precious Metal Notice to Receive - This message is sent by the owner of a
metal account or its authorised agent to the metal account servicing institution. It notifies
the Receiver of the impending delivery/transfer of specified quantities of precious metal,
physically or by book entry, to be held for, or credited to, the account serviced for the
Sender.
MT 606 Precious Metal Debit Advice -This message is sent by the metal account
servicing institution to the account owner or its authorised agent. It is used to advise the
Receiver of an entry which has been debited to its account or an account for which the
Receiver is an authorised agent.
MT 607 Precious Metal Credit Advice - This message is sent by the metal account
servicing institution to the account owner or its authorised agent. It is used to advise the
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Receiver of an entry which has been credited to its account or an account for which the
Receiver is an authorised agent.
MT 608 Statement of a Metal Account - This message is sent by a metal account
servicing institution to the metal account owner or its authorised agent. It is used to
advise the Receiver of transactions booked to a metal account. This statement message
contains all bookings present in the account, whether caused by a message received via
SWIFT or by some other means.
Category 6 - Treasury Markets - Syndications

MT            MT Name                       Purpose

643           Notice of Drawdown/Renewal    Provides notice of the Borrower(s) request for
                                            drawdown(s)/renewal(s) on a given date

644           Advice of Rate and Amount     Specifies the interest rate and, if applicable, the
              Fixing                        the exchange rate, for the next interest period

646           Payment of Principal and/or   Advises of payments and/or prepayments of
              of Interest                   principal and/or of interest with the same value
                                            date, but not related to any subsequent drawing
                                            or renewal

649           General Syndicated Facility   Provides for communications related to syndicated
              Message                       facilities for which no specific message has been
                                            defined



Category 9                Cash Management and Customer Status

MT            MT Name                       Purpose

900           Confirmation of Debit         Advises an account owner of a debit to its account

910           Confirmation of Credit        Advises an account owner of a credit to its account

920           Request Message               Requests the account servicing institution to send an
                                            MT 940, 941, 942 or 950

935           Rate Change Advice            Advises the Receiver of general rate change(s) and/or
                                            rate change(s) which applies to a specific account
                                            other than a call/notice loan/deposit account

940           Customer Statement Message    Provides balance and transaction details of an
                                            account to a financial institution on behalf of the
                                            account owner

941           Balance Report                Provides balance information of an account to a
                                            financial institution on behalf of the account owner

942           Interim Transaction Report    Provides balance and transaction details of an
                                            account, for a specified period of time, to a
                                            financial institution on behalf of the account
                                            owner

950           Statement Message             Provides balance and transaction details of an
                                            account to the account owner
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MT          MT Name                                   Purpose

960         Request for Service Initiation            Initiates a Bilateral Key Exchange (BKE)process
            Message

961         Initiation Response Message               Acknowledges receipt of an MT 960

962         Key Service Message                       Contains a bilateral authenticator key for another
                                                      financial institution

963         Key Acknowledgement Message               Acknowledges receipt of the bilateral key sent in a
                                                      previous MT 962

964         Error Message                             Responds to an MT 960, 961, 963, 966 or 967 if an
                                                      error has been detected to report that error

965         Error in Key Service Message              Responds to an MT 962 if an error has been
                                                      detected and reports that error

966         Discontinue Service Message               Discontinues one or several bilateral authenticator
                                                      keys already in existence between the Sender and
                                                      Receiver

967         Discontinuation Acknowledgement           Acknowledges receipt of a previous MT 966 and
            Message                                   confirms discontinuation of the authenticator key(s)
                                                      specified in the MT 966

970         Netting Statement                         Provides balance and transaction details of a
                                                      netting position as recorded by a netting system

971         Netting Balance Report                    Provides balance information for specified netting
                                                      position(s)

972         Netting Interim Statement                 Advises interim balance and transaction details of a
                                                      netting position as recorded by a netting system

973         Netting Request Message                   Requests and MT 971 or 972 containing the latest
                                                      available information

985         Status Enquiry                            Requests an MT 986

986         Status Report                             Provides business related information about a
                                                      customer or institution



Messages most used by investment managers for intraday:


                                  Notification of debit to account - MT 900

                                 Notification of credit to account - MT 910

                                             Balance Report - MT 941
      Account                                                                                     Account
       Owner                        Interim Transaction Report - MT 942                           Servicer
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MT 900 Confirmation of Debit - This message is sent by an account servicing institution
to an account owner. It is used to notify the account owner of an entry which has been
debited from its account. The entry will be further confirmed by statement.
MT 910 Confirmation of Credit - This message is sent by an account servicing
institution to an account owner. It is used to notify the account owner of an entry which
has been credited to its account. The entry will be further confirmed by statement.
MT 941 Balance Report - This message is sent by an account servicing institution to a
financial institution which has been authorised by the account owner to receive it. It is
used to transmit balance information, reflecting the situation as at an identified time.
MT 942 Interim Transaction Report - This message is sent by an account servicing
institution to a financial institution which has been authorised by the account owner to
receive it. It 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
      the last interim transaction report.


MT 920 Request Message - This multiple message is sent by an account owner, or
financial institution (concentrating institution) acting on behalf of an account owner, to an
account servicing institution. It is used to request the account servicing institution to
transmit one or more MT 940 Customer Statement(s), MT 941 Balance Report(s), MT
942 Interim Transaction Report(s), or MT 950 Statement Message(s) containing the latest
information available for the account(s) identified in the message.
MT 935 Rate Change Advice - This multiple message is used by the Sender to advise
interest rate change(s) to the Receiver. It is used to advise the details of:
      General interest rate change(s)
      Interest rate change(s) which apply to specific account(s), other than call/notice
      loan/deposit account(s), serviced by the Sender of the message for the Receiver.
Interest rate change(s) that can be advised by this message type include: NOTICE, CALL,
PRIME, COMMERCIAL, BASE, CURRENT and DEPOSIT.
Messages most used by investment managers for end of day:



                                  Customer Statement Message - MT 940

                          Statement of detailed entries booked to account - MT950
      Account                                                                       Account
       Owner                                                                        Servicer
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MT 940 Customer Statement Message - This message is sent by an account servicing
institution to a financial institution which has been authorised by the account owner to
receive it. It is used to transmit detailed information about all entries booked to the
account.
MT 950 Statement Message - This message is sent by an account servicing institution
to an account owner. It is used to transmit detailed information about all entries booked
to an account.


Category n           Common Group Messages

MT         MT Name                                 Purpose

n90        Advice of Charges, Interest             Advises an account owner of charges,
                                                   interest and Other Adjustments
                                                   or other adjustments to its account

n91        Request for Payment of Charges,         Requests payment of charges, interest or
                                                   other Interest and Other Expenses
                                                   expenses

n92        Request for Cancellation                Requests the Receiver to consider
                                                   cancellation of the message identified in the
                                                   request

n95        Queries                                 Requests information relating to a previous
                                                   message or amendment to a previous
                                                   message

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

n98        Proprietary Message                     Contains formats defined and agreed to
                                                   between users and for those messages not
                                                   yet live

n99        Free Format Message                     Contains information for which no other
                                                   message type has been defined
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A.2         MX Standards
The SWIFT Standards MX messages are listed according to the business area in which
they have been defined.
Cash Management

MX Identifier        MX Name         Purpose
camt.003.001.03 GetAccount           Sent by a member to the transaction administrator. It requests
                                     information on the details of one or more accounts held at the
                                     transaction administrator, including information on the balances.

camt.004.001.03 ReturnAccount        Sent by a member to the transaction administrator. It provides
                                     information on the details of one or more accounts held at the
                                     transaction administrator, including information on the balances.
                                     The ReturnAccount message can be sent as a response to a
                                     related GetAccount message (pull mode) or initiated by the
                                     transaction administrator (push mode). The push of information
                                     can take place either at prearranged times or as a warning or
                                     alarm when a problem has occurred.

camt.005.001.03 GetTransaction       Sent by a member to the transaction administrator. It requests
                                     information about payment instructions held at the transaction
                                     administrator. Payment instructions are either sent by the member,
                                     debiting or crediting its account at the transaction administrator or
                                     received by the transaction administrator, crediting or debiting the
                                     member’s account.

camt.006.001.02 ReturnTransaction Sent by the transaction administrator to a member of the
                                  system. It provides information on transactions and booked
                                  entries held at the transaction administrator. The
                                  ReturnTransaction message can be sent as a response to a
                                  related GetTransaction message (pull mode) or initiated by the
                                  transaction administrator (push mode). The push of information
                                  can take place either at prearranged times or as a warning or
                                  alarm when a problem has occurred.

camt.007.001.02 ModifyTransaction Sent by a member to the transaction administrator. It requests one
                                  modification in one payment instruction held at the transaction
                                  administrator and sent by the member, debiting or crediting its
                                  account at the transaction administrator.

camt.008.001.03 CancelTransaction Sent by a member to the transaction administrator. It requests the
                                  cancellation of one payment instruction held at the transaction
                                  administrator and sent by the member.

camt.009.001.03 GetLimit             Sent by a member to the transaction administrator. It requests
                                     information on the details of one or more limits set by the member
                                     (or on behalf of the member) and managed by the transaction
                                     administrator.

camt.010.001.03 ReturnLimit          Sent by the transaction administrator to a member of the system.
                                     It provides information on the details of one or more limits set by
                                     the member (or on behalf of the member) and managed by the
                                     transaction administrator. The ReturnLimit message can be sent
                                     as a response to a related GetLimit message (pull mode) or
                                     initiated by the transaction administrator (push mode). The push of
                                     information can take place either at prearranged times or as a
                                     warning or alarm when a problem has occurred.
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MX Identifier     MX Name          Purpose
camt.011.001.03   ModifyLimit      Sent by a member to the transaction administrator. It requests
                                   modifications in the details of one particular limit set by the member
                                   and managed by the transaction administrator. Each ModifyLimit
                                   message can alter only one type of limit (current or default).

camt.012.001.03   DeleteLimit      Sent by a member to the transaction administrator. It requests the
                                   deletion of one particular limit set by the member and managed by
                                   the transaction administrator. Each DeleteLimit message can only
                                   delete one type of current limit (risk or liquidity management limit).

camt.013.001.01   GetMember        Sent by a member to the transaction administrator. It requests
                                   information on static data maintained by the transaction
                                   administrator and related to the participants in the system and their
                                   membership status vis-à-vis this system.

camt.014.001.01   ReturnMember Sent by the transaction administrator to a member of the system.
                  ExchangeRate It provides information on static data maintained by the transaction
                               administrator and related to the participants in the system and their
                               membership status vis-à-vis this system. The ReturnMember
                               message can be sent as a response to a related GetMember
                               message (pull mode) or initiated by the transaction administrator
                               (push mode). The push of information can take place either at
                               prearranged times or as a warning or alarm when a problem has
                               occurred.

camt.015.001.01   ModifyMember Sent by a member to the transaction administrator. It requests
                               modifications to the static data related to the profile of a member
                               that the transaction administrator maintains.

camt.016.001.01   GetCurrency      Sent by a member to the transaction administrator. It requests
                  ExchangeRate     information on static data maintained by the transaction
                                   administrator and related to currency exchange details as
                                   maintained for the system operations by the transaction
                                   administrator.

camt.017.001.01   ReturnCurrency Sent by the transaction administrator to a member of the system.
                  ExchangeRate It provides information on static data and related to currency
                                 exchange details as maintained for system operations by the
                                 transaction administrator. The ReturnCurrencyExchangeRate
                                 message can be sent as a response to a related
                                 GetCurrencyExchangeRate message (pull mode) or initiated by the
                                 account servicer (push mode). The push of information can take
                                 place either at prearranged times or as a warning or alarm when a
                                 problem has occurred.

camt.018.001.01   GetBusiness      Sent by a member to the transaction administrator.

                  DayInformation It requests information on different types of administrative data
                                 linked to the system.

camt.019.001.02   ReturnBusiness Sent by the transaction administrator to a member of the system.
                  DayInformation It provides information on different types of administrative data
                                 linked to the system. The ReturnBusinessDayInformation message
                                 can be sent as a response to a related GetBusinessDayInformation
                                 message (pull mode), or initiated by the transaction administrator
                                 (push mode). The push of information can take place either at
                                 prearranged times or as a warning or alarm when a problem has
                                 occurred.
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MX Identifier        MX Name           Purpose
camt.020.001.01 GetGeneral             Sent by a member to the transaction administrator.
                BusinessInformation    It requests information on a broadcast-type message
                                       previously sent by the transaction administrator to all or some
                                       of the members, giving information related to the processing
                                       business.

camt.021.001.01 ReturnGeneral          Sent by the transaction administrator to a member of the system.
                BusinessInformation    It provides some or all of the members with information related
                                       to the processing of the system. The
                                       ReturnGeneralBusinessInformation message can be sent as a
                                       response to a related GetGeneralBusinessInformation message
                                       (pull mode) or initiated by the transaction administrator (push
                                       mode). The push of information can take place either at
                                       prearranged times or as a warning or alarm when a problem
                                       has occurred.

camt.023.001.02 BackupPayment          Sent by a member to the transaction administrator. It requests
                                       a liquidity transfer from the member to another participant in
                                       the system when the user is in recovery mode.

camt.024.001.02 ModifyStandingOrder Sent by a member to the transaction administrator. It requests
                                    a change in the features of a permanent order for the transfer
                                    of funds between two accounts belonging to the same
                                    member and being held at the transaction administrator.

camt.025.001.01 Receipt                Sent by the transaction administrator to a member of the
                                       system. It acknowledges the receipt of a message previously
                                       sent. The Receipt message is an application receipt
                                       acknowledgement and conveys information about the
                                       processing of the original message.

camt.034.001.02 DuplicateInstruction   Used by financial institutions, with their own offices, and/or with
                                       other financial institutions with which they have established
                                       bilateral agreements. It allows the exchange of duplicate
                                       payment instructions.

camt.046.001.01 GetReservation         Sent by a member to the transaction administrator. It requests
                                       information on the details of one or more reservation facilities
                                       set by the member and managed by the transaction
                                       administrator.

camt.047.001.01 ReturnReservation      Sent by a member to the transaction administrator. It provides
                                       information on the details of one or more reservation facilities
                                       set by the member and managed by the transaction
                                       administrator. The ReturnReservation message can be sent as
                                       a response to a related GetReservation message (pull mode) or
                                       initiated by the transaction administrator (push mode). The
                                       push of information can take place either at prearranged times
                                       or as a warning or alarm when a problem has occurred.

camt.048.001.01 ModifyReservation       Sent by a member to the transaction administrator. It requests
                                        a modification of details of one or more reservation facilities set
                                        by the member and managed by the transaction administrator.

camt.049.001.01 DeleteReservation       Sent by a member to the transaction administrator. It requests
                                        a deletion of one or more reservation facilities set by the
                                        member and managed by the transaction administrator.
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MX Identifier     MX Name                     Purpose
camt.050.001.01   LiquidityCreditTransfer     Sent by a member to the transaction administrator. It
                                              requests a transfer of funds between two accounts
                                              belonging to the same member or the same group of
                                              accounts, and being held at the transaction administrator.

camt.051.001.01   LiquidityDebitTransfer      Sent by a member to the transaction administrator. It
                                              requests a transfer of funds between two accounts
                                              belonging to the same member or the same group of
                                              accounts, and being held at the transaction administrator.

camt.052.001.01   BankToCustomer              Sent by the account servicer to an account owner or to a
                  AccountReport               party authorised by the account owner to receive the
                                              message. It can be used to inform the account owner, or
                                              authorised party, of the entries reported to the account,
                                              and/or to provide the owner with balance information on
                                              the account at a given point in time.

camt.053.001.01   BankToCustomer              Sent by the account servicer to an account owner or to a
                  Statement                   party authorised by the account owner to receive the
                                              message. It is used to inform the account owner, or
                                              authorised party, of the entries booked to the account,
                                              and to provide the owner with balance information on the
                                              account at a given point in time.

camt.054.001.01   BankToCustomer              Sent by the account servicer to an account owner or to a
                  DebitCreditNotification     party authorised by the account owner to receive the
                                              message. It can be used to inform the account owner, or
                                              authorised party, of single or multiple debit and/or credit
                                              entries reported to the account.



Derivatives (see http://www.fpml.org/)

MX IdentifierMX Name                               Purpose

defp.001.001.01   ContractCreated             The ContractCreated notification message indicates that a
                                              contract has been created at the allocation level

defp.002.001.01   ContractNovated             Provides the recipient with the latest terms for a full or
                                              partial novation of the indicated contract.

defp.003.001.01   ContractIncreased           Provides the recipient with the terms for an economic
                                              enlargement of the indicated contract

defp.004.001.01   ContractPartialTermination Indicates that a contract has been terminated partially.

defp.005.001.01   ContractFullTermination     Provides the recipient with the latest terms for a full
                                              termination of the indicated contract.

defp.006.001.01   ContractCancelled           The ContractCancelled notification allows a contract
                                              created by mistake to be cancelled entirely.

defp.007.001.01   RequestTradeConfirmation The RequestTradeConfirmation allows a trading party to
                                           confirm a trade to its counterparty

defp.008.001.01   ModifyTradeConfirmation     Allows a trading party to modify a trade previously
                                              confirmed to its counterparty.
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MX Identifier        MX Name                      Purpose
defp.009.001.01      CancelTradeConfirmation      Allows a trading party to cancel a trade previously
                                                  confirmed to its counterparty.

defp.010.001.01      ContractNovatedCancelled Notifies the recipient that a ContractNovated is
                                              cancelled.

defp.011.001.01      ContractIncreased            The ContractIncreasedCancelled message notifies the
                     Cancelled                    recipient that a ContractIncreased is cancelled

defp.012.001.01      ContractPartialTermination   The ContractPartialTerminationCancelled notifies that a
                     Cancelled                    ContractPartialTermination is cancelled

defp.013.001.01      ContractFullTermination      The ContractFullTerminationCancelled message notifies
                     Cancelled                    that a ContractFullTermination is cancelled



Payments Clearing and Settlement

MX Identifier        MX Name                      Purpose

pacs.002.001.02 PaymentStatusReport               The PaymentStatusReport message is sent by an
                                                  instructed agent to the previous party in the payment
                                                  chain. It informs this party about the positive or negative
                                                  status of an instruction (either single or file). It can also
                                                  report on a pending instruction.

pacs.003.001.01 FlToFICustomerDirectDebit         Sent by the creditor agent to the debtor agent, directly
                                                  or through other agents and/or a payment clearing and
                                                  settlement system. It collects funds from a debtor
                                                  account for a creditor.

pacs.004.001.01 PaymentReturn                     The PaymentReturn message is sent by an agent to the
                                                  previous agent in the payment chain to undo a payment
                                                  previously settled.

pacs.006.001.01 PaymentCancellation               The PaymentCancellationRequest message is sent by
                Request                           the initiating party or any agent, to the next party in the
                                                  payment chain. It requests the cancellation of an
                                                  instruction previously sent.

pacs.007.001.01 FIToFIPaymentReversal             The FIToFIPaymentReversal message is sent by an
                                                  agent to the next party in the payment chain. It reverses
                                                  a payment previously executed.

pacs.008.001.01 FIToFICustomer                    The FIToFICustomerCreditTransfer message is sent by
                CreditTransfer                    the debtor agent to the creditor agent, directly or
                                                  through other agents and/or a payment clearing and
                                                  settlement system. It moves funds from a debtor
                                                  account to a creditor.

pacs.009.001.01 FinancialInstitution              The FinancialInstitutionCreditTransfer message is sent by
                CreditTransfer                    a debtor financial institution to a creditor financial
                                                  institution, directly or through other agents and/or a
                                                  payment clearing and settlement system. It moves funds
                                                  from a debtor account to a creditor, where both debtor
                                                  and creditor are financial institutions.
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Payments Initiation

MX Identifier     MX Name                 Purpose
pain.001.001.02   CustomerCredit          Sent by the initiating party to the forwarding agent or
                  TransferInitiation      debtor agent. It requests movement of funds from the
                                          debtor’s account to a creditor.

pain.002.001.02   PaymentStatusReport Sent by an instructed agent to the previous party in the
                                      payment chain. It informs this party about the positive or
                                      negative status of an instruction (either single or file). It can
                                      also report on a pending instruction.

pain.007.001.01   CustomerPaymentl        Sent by the initiating party to the next party in the payment
                  Reversa                 chain. It reverses a payment previously executed.

pain.008.001.01   CustomerDirect          Sent by the initiating party to the forwarding agent or creditor
                  DebitInitiation         agent. It requests single or bulk collection(s) of funds from
                                          one or various debtor’s account(s) for a creditor.



Securities Events

MX Identifier     MX Name                 Purpose
seev.001.001.01   MeetingNotification     Sent by a notifying party, eg, an issuer, its agent or an
                                          intermediary to a party holding y, the right to vote, to
                                          announce a shareholders meeting. It provides information on
                                          the participation details and requirements for the meeting,
                                          the vote parameters and the resolutions.

seev.002.001.01   MeetingCancellation     Sent by the party that sent the MeetingNotification message
                                          to the original receiver. It is sent to cancel the previous
                                          MeetingNotification message previously sent or to advise the
                                          cancellation of a meeting.

seev.003.001.01   MeetingEntitlement       Sent by an account servicer t to an issuer, its agent, an
                  Notification             intermediary or an account owner to advise the entitlement
                                           in relation to a shareholders meeting.

seev.004.001.01   MeetingInstruction      Sent by a party holding the right to vote to an intermediary,
                                          the issuer or its agent to request the receiving party to act
                                          upon one or several instructions. The MeetingInstruction
                                          message is used to register for a shareholders meeting,
                                          request blocking or registration of securities. It is used to
                                          assign a proxy, to specify the names of meeting attendees
                                          and to relay vote instructions per resolution electronically.

seev.005.001.01   MeetingInstruction      Sent by the same party that sent the MeetingInstruction
                  CancellationRequest     message. It is sent to request the cancellation of all
                                          instructions included in the original the MeetingInstruction
                                          message.
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MX Identifier        MX Name                    Purpose
seev.006.001.01      MeetingInstructionStatus   Sent by the Receiver of the MeetingInstruction or
                                                MeetingInstructionCancellationRequest to the Sender of
                                                these messages. The message gives the status of a
                                                complete message or of one or more specific instructions
                                                within the message. It can also be used used as a
                                                reminder to request voting instructions.

seev.007.001.01      MeetingVoteExecution       Sent by an issuer, its agent or an intermediary to confirm
                     Confirmation               to the Sender of the MeetingInstruction message, the
                                                execution of their voting instruction. This message is sent
                                                after the meeting has taken place.

seev.008.001.01      MeetingResult              The MeetingResultDissemination message is sent by
                     Dissemination              an issuer, its agent or an intermediary to another
                                                intermediary, to a party holding the right to vote, to a
                                                registered security holder or to a beneficial holder to
                                                provide information on the voting results of a
                                                shareholders meeting. It may also provide information on
                                                the level of participation. This message is also used to
                                                notify an update.



Securities Management

MX Identifier        MX Name                    Purpose
semt.001.001.02 SecuritiesMessage               Rejects a previously received message on which action
                Rejection                       cannot be taken

semt.002.001.02 CustodyStatement                Provides detailed quantity and availability information for
                OfHoldings                      financial instrument holdings of a portfolio.

semt.008.001.01 RegulatoryTransaction           Reports the transaction details of securities trades that
                Report                          have been executed on or off-exchange.

semt.009.001.01 RegulatoryTransaction     Used to request the cancellation of one or more or all
                ReportCancellationRequest previously sent individual transactions reports.

semt.010.001.01 RegulatoryTransaction           Used to provide the status of one or more or all
                ReportStatus                    previously received individual transactions reports.

semt.011.001.01 RegulatoryTransaction           Used to provide the status of one or more or all
                ReportCancellationStatus        previously received individual transactions reports
                                                cancellations requests.
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Treasury

MX Identifier     MX Name                  Purpose
trea.001.001.02   CreateNonDeliverable     Sent by a participant to a central system or to a
                  ForwardOpening           counterparty to notify the opening of a non deliverable
                                           trade.

trea.002.001.02   AmendNonDeliverable      Sent by a participant to a central system or to a
                  ForwardOpening           counterparty to notify the amendment of the opening of a
                                           non deliverable trade previously confirmed by the sender.

trea.003.001.02   CancelNonDeliverable     Sent by a participant to a central system or to a
                  ForwardOpening           counterparty to notify the cancellation of the opening of a
                                           non deliverable trade previously confirmed by the sender.

trea.004.001.02   CreateNonDeliverable     Sent by a participant to a central system or to a
                  ForwardValuation         counterparty to notify the valuation of a non deliverable
                                           trade.

trea.005.001.02   AmendNonDeliverable      Sent by a participant to a central system or to a
                  ForwardValuation         counterparty to notify the amendment of the valuation of a
                                           non deliverable trade previously confirmed by the sender.

trea.006.001.02   CancelNonDeliverable     Sent by a participant to a central system or to a
                  ForwardValuation         counterparty to notify the cancellation of the valuation of a
                                           non deliverable trade previously confirmed by the sender.

trea.007.001.02   NonDeliverable           Sent by a central system to a participant to provide details
                  ForwardNotification      of a non deliverable forward trade.

trea.008.001.02   StatusNotification         Sent by a central system to a participant to notify the
                                           current status of a foreign exchange option trade in the
                                           system.

trea.009.001.02   CreateForeign            Sent by a participant to a central system or to a `
                  ExchangeOption           counterparty to confirm a foreign currency option contract.
                                           This message is only suitable for Simple (i.e. not Barrier)
                                           Vanilla (i.e. not Binary, Digital, Notouch) Foreign Exchange
                                           Options.

trea.010.001.02   AmendForeign             Sent by a participant to a central system or to a
                  ExchangeOption           counterparty to notify the amendment of a foreign currency
                                           option contract. This message is only suitable for Simple
                                           (i.e. not Barrier) Vanilla (i.e. not Binary, Digital, Notouch)
                                           Foreign Exchange Options.

trea.011.001.02   CancelForeign            Sent by a participant to a central system or to a
                                           counterparty to notify the cancellation of a foreign currency
                                           option contract. This message is only suitable for Simple
                                           (i.e. not Barrier) Vanilla (i.e. not Binary, Digital, Notouch)
                                           Foreign Exchange Options.

trea.012.001.02   ForeignExchange          Sent by a central system to a participant to notify the
                  OptionNotification       current status of a trade in the system.

trea.013.001.01   WithdrawalNotification   Sent by a central system to notify the withdrawal of a trade
                                           which was previously notified to the receiver
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Payments exception and Investigation - Case assignment
There is one specific ‘case assignment’ message for each of the four business activities:
MX Identifier          MX Name                Purpose
camt.008.002.02        RequestTo              Sent by a case creator/case assigner to a case assignee.
                       CancelPayment          It requests the cancellation of an original payment instruction.

camt.007.002.02        RequestTo              Sent by a case creator/case assigner to a case assignee.
                       ModifyPayment          It requests the modification of characteristics of an original
                                              payment instruction.

camt.026.001.02        UnableToApply          Sent by a case creator/case assigner to a case assignee. It
                                              initiates an investigation of a payment instruction that cannot
                                              be executed or reconciled.

camt.027.001.02        ClaimNonReceipt        Sent by a case creator/case assigner to a case assignee. It
                                              initiates an investigation for missing funds at the creditor
                                              (missing credit entry to its account) or at an agent along the
                                              processing chain (missing cover for a received payment
                                              instruction).



These messages are exchanged between case assigners and case assignees. They
support the following payment-related investigation activities.


Payments exception and Investigation - Case management

MX Identifier          MX Name                Purpose
camt.028.001.02        Additional             Sent by an account servicing institution to an account owner.
                       PaymentInformation     It provides additional or corrected information on a payment
                                              instruction or statement entry, in order to allow reconciliation.

camt.029.001.02        ResolutionOf           Sent by a case assignee to a case creator/case assigner.
                       Investigation          It informs of the resolution of a case, and optionally provides
                                              details about the corrective action undertaken by the case
                                              assignee.

camt.030.001.02        NotificationOf         Sent by a case assignee to a case creator/case assigner.
                       CaseAssignment         It informs the case assigner of further action that is
                                              undertaken by the case assignee to process the case, eg, the
                                              assignment of the case to a next case assignee.

camt.033.001.02        RequestFor             Sent by the case assignee to the case creator/case assigner.
                       DuplicateInstruction   It requests a copy of the original payment instruction
                                              considered in the case.

camt.034.001.02       DuplicateInstruction    Used by financial institutions, with their own offices, and/or
                                              with other financial institutions with which they have
                                              established bilateral agreements. It allows the exchange of
                                              duplicate payment instructions.

camt.031.001.02        RejectCase             Sent by a case assignee to a case creator/case assigner.
                       Assignment             It is used to reject a case.

camt.032.001.01       CancelCase              Sent by a case creator/case assigner to a case assignee. It
                                              requests the cancellation of a case.
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MX Identifier     MX Name               Purpose
camt.038.001.01   CaseStatusReport      Sent by a case creator/case assigner to a case assignee.
                  Request               It requests the status of a case.

camt.039.001.02   CaseStatusReport      Sent by a case assignee to a case creator/case assigner. It
                                        reports on the status of a case.

camt.036.001.01   DebitAuthorisation    Sent by an account owner to its account servicing
                  Response              institution. It is used to approve or reject a debit authorisation
                                        request.

camt.037.001.02   DebitAuthorisation    Sent by an account servicing institution to an account
                  Request               owner. It requests authorisation to debit an account.

camt.035.001.01   ProprietaryFormat     Used by financial institutions, with their own offices,
                  Investigation         and/or with other financial institutions with which they have
                                        established bilateral agreements. It is used as an envelope for
                                        a non standard message. It provides means to manage an
                                        exception or investigation which falls outside the scope or
                                        capability of any other formatted message. It also allows
                                        financial institutions to use message types which are awaiting
                                        live implementation in the Exceptions & Investigations solution



The above activities are supported by the case management messages.


Funds - Account Management

MX Identifier     MX Name               Purpose
camt.028.001.02   AccountOpening        Open an account directly or indirectly with the account
                  Instruction           servicer or an intermediary.

acmt.002.001.02   AccountModification Modify the details of an existing account.
                  Instruction

acmt.003.001.02   AccountDetails        Confirm the opening of an account, modification
                  Confirmation          of an account or the provision of information requested in a
                                        previously sent Get Account Details message.

acmt.004.001.02   GetAccountDetails     Query all or some of the account details for a given account
                                        held with an account servicer.

acmt.005.001.02   RequestForAccount     Request the processing status of a previously sent
                  ManagementStatus      Account Opening Instruction message or Account
                  Report                Modification Instruction message for which a Account Details
                                        Confirmation message has not yet been received

acmt.006.001.02   AccountManagement Provides the processing status of a previously received
                  StatusReport      Account Opening Instruction or of an Account Modification
                                    Instruction message.



Account management messages are used to manage investment account opening and
modifications to registered account information.
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                                         Account Opening Instruction

                                       Account Modification Instruction

                                        Account Details Confirmation

                                             Get Account Details
      Account                                                                                   Account
       Owner                                                                                    Servicer
                                Request for Account Mangaement Status Report

                                     Account Management Status Report




Funds - Order, confirmation and cancellation messages
Order messages are used to instruct the executing party to subscribe, to redeem or to
switch a given amount/quantity of a specified financial instrument.
As the processes are different for many institutions, there is a need to differentiate at
message type level.
These messages can be grouped into three categories:
— Subscription,
— Redemption,
— Switch.
Orders in the funds industry may be given according to different scenarios, eg, some
players group orders before sending them to the next party in the chain.


MX Identifier       MX Name                   Purpose
setr.001.001.03     RedemptionBulkOrder       Bulks several individual redemption orders for one financial
                                              instrument into one bulk order for multiple accounts.

setr.002.001.03     RedemptionBulkOrder       Requests the cancellation of a previously sent
                    CancellationRequest       RedemptionBulkOrder message. The message may request
                                              the cancellation of one, many or all redemption orders
                                              contained in a previously sent RedemptionBulkOrder
                                              message.

setr.003.001.03     RedemptionBulk            Confirms the execution of a previoulsy received
                    OrderConfirmation         RedmptionBulkOrder message. The message may confirm
                                              one, many or all redemption orders contained in a previously
                                              received RedemptionBulkOrder message.

setr.004.001.03     RedemptionOrder           Instructs the redemption of one or more financial instruments
                                              for one investment fund account.

setr.005.001.03     RedemptionOrder           Requests the cancellation of a previously sent
                    CancellationRequest       RedemptionOrder message. The message may request the
                                              cancellation of one, many or all redemption orders contained
                                              in a previously sent RedemptionOrder message.
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MX Identifier     MX Name                 Purpose
setr.006.001.03   RedemptionOrder         Confirms the execution of a previously received
                  Confirmation            RedemptionOrder message. The message may confirm the
                                          execution of one, many or all redemption orders contained in
                                          a previously received RedemptionOrder message.

setr.007.001.03   SubscriptionBulkOrder   Bulks several individual subscription orders for one financial
                                          instrument into one bulk order for multiple accounts.

setr.008.001.03   SubscriptionBulkOrder   Requests the cancellation of a previously sent
                  CancellationRequest     SubscriptionBulkOrder. The message may request the
                                          cancellation of one, many or all subscription orders
                                          contained in a previously received SubscriptionBulkOrder
                                          message.

setr.009.001.03   SubscriptionBulkOrder   Confirms the execution of a previously received
                  Confirmation            SubscriptionBulkOrder message. The message may confirm
                                          the execution of one, many or all subscription orders
                                          contained in a previously received subscriptionBulkOrder
                                          message.

setr.010.001.03   SubscriptionOrder       Instructs the subscription of one or more financial
                                          instruments for one investment fund account.

setr.011.001.03   SubscriptionMultiple    Requests the cancellation of a previously sent
                  OrderCancellation       SubscriptionOrder message. The message may
                  Request                 request the cancellation of one, many or all subscription
                                          orders contained in a previously sent SubscriptionOrder
                                          message.

setr.012.001.03   SubscriptionOrder       The SubscriptionOrderConfirmation message confirms
                  Confirmation            the execution of a previously received SubscriptionOrder
                                          message. The message may confirm the execution of one,
                                          many or all subscription orders contained in a previously
                                          received SubscriptionOrder message.

setr.013.001.03   SwitchOrder             Instructs a switch transaction from a financial instrument or
                                          multiple financial instruments to a different specified financial
                                          instrument or instruments for a specified amount/quantity.

setr.014.001.03   SwitchOrder             Requests the cancellation of a previously sent SwitchOrder
                  Cancellation Request    message. The message may request the cancellation of one,
                                          many or all switch orders contained in a previously sent
                                          SwitchOrder message.

setr.015.001.03   SwitchOrder             Confirms the execution of a previously received
                  Confirmation            SwitchOrder message. The message may confirm the
                                          execution of one, many or all switch orders contained in a
                                          previously received SwitchOrder message.
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In order to cater for this, two sub-categories have been created for the subscription and
the redemption types of messages.
— Bulk order: A bulk message is typically a message containing a series of individual
  order transactions from different accounts, but for the same financial instrument with
  the same intermediary details. The order will result in a single cash settlement (not
  settlement per individual order) executed using one single method. This order is sent
  by a concentrator or a party collecting orders and bulking them to relay the
  transactions to the transfer agent or another intermediary.
— Order: An order message is typically a message containing a single order or multiple
  orders (list of orders related to several financial instruments) for the same account. It is
  a ‘shopping list’ for one account. This type of order is typically sent by financial
  advisers or banks that are managing a portfolio for a particular account.
In short, a bulk is "1 financial instrument-n accounts"; and an order is "1 account-1
financial instrument" if it is a single order and "1 account-n financial instruments" if it is a
multiple order.
No specific order category has been created for cross or ‘bed and breakfast’ orders. In
some countries, for legal reasons, these must appear as separate orders, while in others,
the two orders may be given together. Therefore, no specific order has been created for a
bed and breakfast order, as this transaction is the combination of a redemption and a
subscription linked together. Limit and forward orders are not covered, as these are not
common in the Funds industry.
For each category, below main flows are covered:
— the order,
— the order confirmation,
— the order cancellation instruction.
There is no order amendment message, as the agreed philosophy is ‘cancel and replace’.
In addition, messages for 2 new flows are now available. They are:
— the order confirmation amendment,
— the order confirmation cancellation.
These messages cover the cases where one or several details in the order confirmation
message need to be amended or when the entire order confirmation message needs to
be cancelled.
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Funds - Order status reporting messages

MX Identifier     MX Name                    Purpose
setr.016.001.03   OrderInstruction           Reports the status of a subscription, redemption or switch
                  StatusReport               order prior to execution.

setr.017.001.03   OrderCancellation          Reports the status of an order cancellation request
                  StatusReport               that was previously received.

setr.018.001.03   RequestForOrder            Requests the status of one or more order instruction
                  StatusReport               or order cancellation request messages.

setr.047.001.01   SubscriptionOrder          Cancels one or more previously sent subscription
                  ConfirmationCancellation   order confirmations.
                  Instruction

setr.048.001.01   SubscriptionOrder          Amends a previously sent subscriptionOrderConfirmation
                  ConfirmationAmendment      message.

setr.049.001.01   SubscriptionBulkOrder      Cancels one or more previously sent subscription order
                  ConfirmationCancellation   confirmations.
                  Instruction

setr.050.001.01   SubscriptionBulkOrder      Amends a previously sent
                  ConfirmationAmendment      SubscriptionBulkOrderConfirmation message.

setr.051.001.01   RedemptionOrder            Cancels one or more previously sent redemption order
                  ConfirmationCancellation   confirmations.
                  Instruction

setr.052.001.01   RedemptionOrder            Amends a previously sent RedemptionOrderConfirmation
                  ConfirmationAmendment      message.

setr.053.001.01   RedemptionBulkOrder        Cancels a previously sent
                  ConfirmationCancellation   RedemptionBulkOrderConfirmation. The message may be
                  Instruction                used to cancel one, many or all redemption order
                                             confirmations contained in a previously sent
                                             RedemptionBulkOrderConfirmation message.

setr.054.001.01   RedemptionBulkOrder        Amends a previously sent
                  ConfirmationAmendment      RedemptionBulkOrderConfirmation message.

setr.055.001.01   SwitchOrderConfirmation Cancels one or more previously sent switch order
                  CancellationInstruction confirmations.

setr.056.001.01   SwitchOrder                Amends a previously sent switchOrderConfirmation
                  ConfirmationAmendment      message.

setr.057.001.01   OrderConfirmation          Reports the status of an order confirmation or an order
                  StatusReport               confirmation amendment.

setr.058.001.01   RequestForOrder          Requests the status of one or several order confirmations.
                  ConfirmationStatusReport
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The Request For Order Status Report message covers the message flow between an
instructing party and an executing party.
This message requests the status of an order message or an order cancellation
instruction message.
The Order Instruction Status Report message covers the message flow between an
executing party and an instructing party. This message informs the instructing party of the
status of its order message, ie, SubscriptionOrder,
SubscriptionBulkOrder, RedemptionOrder, RedemptionBulkOrder or SwitchOrder.
The OrderCancellationStatusReport message covers the message flow between an
executing party and an instructing party. This message informs the instructing party of the
status of its order cancellation request message, ie,
SubscriptionOrderCancellationRequest, SubscriptionBulkOrderCancellationRequest,
RedemptionOrderCancellationRequest, RedemptionBulkOrderCancellationRequest or
SwitchOrderCancellationRequest.
Two new messages are now available: the RequestForOrderConfirmationStatusReport
and the OrderConfirmationStatusReport. They cover cases where the status of a
confirmation needs to be communicated by the instructing party to the executing party
(ie, the requesting party).



Funds - Order status reporting messages

MX Identifier       MX Name             Purpose
camt.040.001.03 FundEstimatedCash       Reports the estimated cash incomings and outgoings of
                ForecastReport          one or more investment funds on one or more trade dates.

camt.041.001.03 FundConfirmedCash       Confirms the cash incomings and outgoings of one or more
                ForecastReport          investment funds on one or more trade dates.

camt.042.001.03 FundDetailedEstimated   Reports the estimated cash incomings and outgoings,
                CashForecastReport      sorted by criteria defined by the user of one or more
                                        investment funds on one or more trade dates.

camt.043.001.03 FundDetailedConfirmed   Reports the cash incomings and outgoings, sorted by
                CashForecastReport      criteria defined by the user of one or more investment funds
                                        on one or more trade dates.

camt.044.001.02 FundConfirmedCash       The FundConfirmedCashForecastReportCancellation
                ForecastReport          message cancels a previously sent
                Cancellation            FundConfirmedCashForecastReport message.

camt.045.001.02 FundDetailedConfirmed   Cancels a previously sent
                CashForecastReport      FundDetailedConfirmedCashForecastReport message.
                Cancellation



The fund cash forecast reporting messages are used to provide a report of the cash
incomings and outgoings per investment fund. The cash incomings and outgoings result
from redemption, subscription and switch transactions.
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Funds – Statements

MX Identifier   MX Name                 Purpose
semt.003.001.02 AccountingStatement     Provides valuation detail
                OfHoldings

semt.004.001.02 CustodyStatementOf      Cancels a previously sen CustodyStatementOfHoldings
                HoldingsCancellation    message.

semt.005.001.02 AccountingStatementOf   Cancels a previously sent AccountingStatementOfHoldings
                HoldingsCancellation    message.

semt.006.001.02 StatementOfInvestment   Reports detailed transactions (increases and decreases) of
                FundTransactions        holdings which occurred during a specified period of time.

semt.007.001.02 StatementOfInvestment   Cancels a previously sent
                FundTransactions        StatementOfInvestmentFundstransactions message.
                Cancellation



Statement messages are used to report the holdings of or transactions on a specific
account or sub-account on a specified date or period.
These messages can be grouped into three categories:
— Accounting holdings statement,
— Custody holdings statement,
— Transactions statement.


For each category, two main flows are covered:
— the statement
— the statement cancellation
Additional messages, eg, request for statement message or statement of pending
transactions will be available in the next phases of the standards initiative.
These messages are grouped into two categories.
— Estimated report: contains estimated cash forecasts, ie, cash flows calculated with an
estimated price, usually the price of the previous trade date.
— Confirmed report: contains confirmed cash forecasts, ie, cash flows calculated with
the definitive price on a specific trade date.
Each category is divided into two sub-categories:
— Short report: contains incoming and outgoing cash flows.
— Detailed report: contains incoming and outgoing cash flows. These may be sorted
according to predefined or user defined criteria and breakdown information may be given.
Estimated cash forecast messages do not need to be cancelled and replaced, as an
estimated message overwrites the previous estimated message. Confirmed cash forecast
reports may be cancelled and for this reason, two cancellation messages exist.
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Funds - Price Reporting messages (NAV: Net Asset Value)

MX Identifier       MX Name               Purpose
reda.001.001.03 PriceReport               Reports the net asset value and price information for one or
                                          more financial instruments on specific trade dates and,
                                          optionally, to quote price variation information.

reda.002.001.03 PriceReportCancellation   Cancels a previouslysent PriceReport message.

reda.003.001.03 PriceReportCorrection     Corrects specific price information included in a previously
                                          sent PriceReport message.



The price reporting messages cover the message flows between a report provider and a
report user.
The price messages are used to:
— communicate the price of an investment fund,
— correct a price that was previously sent,
— cancel a previously sent PriceReport.
A report provider, eg, a transfer agent, fund accountant or market data provider, sends
the PriceReport message to the report recipient, eg, a fund management company,
transfer agent, market data provider, regulator or other interested party to provide the net
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Funds - Transfer, confirmation and cancellation messages

MX Identifier     MX Name                 Purpose

sese.001.001.02 TransferOutInstruction    The TransferOutInstruction message instructs the delivery
                                          of a financial instrument, free of payment, to another of the
                                          instructing parties own accounts or to a third party.

sese.002.001.02 TransferOutCancellation   The TransferOutCancellationRequest message requests the
                Request                   cancellation of a previously sent TransferOutInstruction
                                          message.

sese.003.001.02 TransferOutConfirmation   The TransferOutConfirmation message confirms the
                                          execution of a previously received TransferOutInstruction
                                          message.

sese.004.001.02 ReversalOfTransferOut     The ReversalOfTransferOutConfirmation message reverses
                Confirmation              (cancels) a previously sent TransferOutConfirmation
                                          message.

sese.005.001.02 TransferInInstruction     The TransferInInstruction message instructs the receipt of a
                                          financial instrument, free of payment, from another
                                          account, either owned by the instructing party or by a third
                                          party.

sese.006.001.02 TransferInCancellation    The TransferInCancellationRequest message requests the
                Request                   cancellation of a previously sent TransferInInstruction
                                          message.

sese.007.001.02 TransferInConfirmation    The TransferInConfirmation message confirms the
                                          execution of a previously received TransferInInstruction
                                          message.

sese.008.001.02 ReversalOfTransferIn      The ReversalOfTransferInConfirmation message reverses
                Confirmation              (cancels) a previously sent TransferInConfirmation
                                          message.



The functions involving changes in the fund register due to a change of record keeper
(with or without changing the beneficial owner).
An instructing party, eg, an investment manager or its authorised representative, sends
the Transfer message to the executing party, eg, a transfer agent, to instruct the receipt
or delivery of a financial instrument, free of payment, on a given date from a specified
party. This message may also be used to instruct the receipt of a financial instrument, free
of payment, from another of the instructing parties own accounts or from a third party.
Transfer messages are used to instruct the transfer of a given amount/quantity of a
specified financial instrument from one account to another own account or to a third party
account.
These messages can be grouped into two categories:
— Transfer out,
— Transfer in.
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Specific messages have been created for transfer out and transfer in. As processing of
transfers is different for many institutions, there is a need to differentiate at message type
level. For each category, four main flows are covered:
— the transfer instruction,
— the transfer cancellation request,
— the transfer confirmation,
— the reversal of the transfer confirmation.



Funds - Transfer status messages and request for transfer status message

MX Identifier       MX Name                  Purpose

sese.009.001.02 RequestForTransferStatus The RequestForTransferStatusReport message requests
                Report                   the status of a previously instructed transfer or the status of
                                         a previously sent cancellation of transfer request.

sese.010.001.02 TransferCancellationStatus The TransferCancellationStatusReport message reports the
                Report                     status of a transfer in or transfer out cancellation request.

sese.011.001.02 TransferInstructionStatus    The TransferInstructionStatusReport message reports the
                Report                       status of a previously received TransferInInstruction or
                                             TransferOutInstruction message.



These transfer status report messages allow to report on the status of transfer messages
and transfer cancellation instruction messages, and to request a status report.
The TransferInstructionStatusReport message covers the message flow between an
instructing party and an executing party. It informs the instructing party on the status of its
transfer message, ie, TransferOutInstruction or TransferInInstruction.
The TransferCancellationStatusReport message covers the message flow between an
instructing party and an executing party. It informs the instructing party on the status of its
transfer cancellation instruction message, ie, TransferOutCancellationRequest or
TransferInCancellationRequest.
The RequestForTransferStatusReport message covers the message flow between an
instructing party and an executing party. It requests the status of a transfer message or a
transfer cancellation instruction message.
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Funds - PEP or ISA or Portfolio transfer messages

MX Identifier   MX Name                Purpose

sese.012.001.02 PEPOrISAOrPortfolio    The PEPOrISAOrPortfolioTransferInstruction message
                TransferInstruction    instructs the transfer of financial instruments from the
                                       clients account at the old plan manager to the clients
                                       account at the new plan manager through a nominee
                                       account.

sese.013.001.02 PEPOrISAOrPortfolio    The PEPOrISAOrPortfolioTransferConfirmation message
                TransferConfirmation   confirms the execution of a previously received
                                       PEPOrISAOrPortfolioTransferInstruction message. The
                                       message may be used to confirm the execution of one,
                                       many or all transfers contained in a previously received
                                       PEPOrISAOrPortfolioTransfer message.

sese.014.001.02 PEPOrISAOrPortfolio    The PEPOrISAOrPortfolioTransferCancellationRequest
                TransferCancellation   message requests the cancellation of a previously sent
                Request                PEPOrISAOrPortfolioTransferInstruction message. The
                                       message requests the cancellation of all transfer
                                       instructions contained within a previously sent
                                       PEPOrISAOrPortfolioTransferInstruction message.

sese.018.001.01 PEPOrISAOrPortfolio    The PEPOrISAOrPortfolioInformation message provides
                Information            information about one or more PEP or ISA or portfolio
                                       products held in a client’s account.

sese.019.001.01 RequestForPEPOrISAOr   The RequestForPEPOrISAOrPortfolioInformation message
                PortfolioInformation   requests information about one or more PEP or ISA or
                                       portfolio products held in a client’s account for which a
                                       transfer will be instructed at a later time.



PEP/ISA transfer messages are used to instruct the transfer of one or more assets from
an investor’s account at an old plan manager to an account with the new plan manager.
In addition, 2 new messages are now available to request information and provide
information about a particular PEP or ISA or Portfolio. These messages are the request
for PEP or ISA or portfolio information and the PEP or ISA or portfolio information.



Funds - Rejection Message

MX Identifier   MX Name                Purpose

admi.002.001.01 MessageReject          Sent by a central system to notify the rejection of a
                                       previously received message. It provides specific
                                       information about the rejection reason.
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Funds – FPP (Funds Processing Passport)

MX Identifier       MX Name                Purpose

reda.004.001.01 FundProcessingPassport    Used to convey the key reference data for financial
                Report                    instruments needed to facilitate trading.

reda.005.001.01 RequestForInvestment      Used to request a funds processing passport report. It may
                FundReport                also be used to request other investment funds reports,
                                          such as a fund cash forecast report. The request message
                                          may also be used to request statements, such as the
                                          statement of investment fund transactions.



FundProcessingPassportReport - A report provider, eg, a fund promoter, fund
management company, transfer agent, or market data provider, sends the
FundProcessingPassportReport message to the report recipient, eg, a professional
investor, investment fund distributor, market data provider, regulator or other interested
party to provide the key reference data for financial instruments to facilitate trading.
RequestForInvestmentFundReport - A report user, eg, a professional investor, investment
fund distributor, market data provider, regulator or other interested party sends the
RequestForInvestmentFundReport message to the report provider, eg, a fund promoter,
fund management company, transfer agent, or market data provider to request a report.
The RequestForInvestmentFundReport message can be used to request the following
reports and statements:
— Fund cash forecast report, eg, a FundDetailedConfirmedCashForecastReport
— FundProcessingPassportReport
— PriceReport
— Statement, eg, AccountingStatementOfHoldings
— User defined report


Administration

MX Identifier       MX Name               Purpose

admi.001.001.01       Report               Used for general application level data reporting. A
                                           message may contain either a full report or one single
                                           tranche (part) of a report split in multi-tranches (multi-
                                           parts). The message contains a mechanism to support
                                           the correct reassembling of the reporting data by an
                                           application.

admi.002.001.01 MessageReject             Sent by a central system to notify the rejection of a
                                          previously received message. It provides specific
                                          information about the rejection reason.

admi.004.001.01 SystemEventNotification   Sent by a central system to notify the occurrence of an
                                          event in a central system.
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The SecuritiesMessageRejection message is used to reject any securities message. An
account servicer, eg, a registrar, transfer agent or custodian bank, sends the
SecuritiesMessageRejection message to an account owner, eg, an investor or its
authorised agent, to reject a previously received message on which action cannot be
taken.
The message may also be sent by the executing party, eg, transfer agent to the
instructing party, eg, investment manager or its authorised representative to reject a
previously received message on which action cannot be taken.

A.3. FpML Standards
The FpML messages are listed according to the business area in which they have been
defined.
Syndicated Loans

MX Name                         Purpose
DrawdownNotice         After the agent bank received a written drawdown request,
(also used for a       it calculates the amount of principal due from each lender based on their share of
RateSetNotice)         the underlying unutilised commitment. The agent bank creates a
                       DrawdownNotice for each of the lenders. The interest rate to be applied to the
                       contract is not always known at the time that the drawdown notice is sent out.
                       The agent bank therefore sends out the notice without interest rate information.
                       This information is then provided in a separate RateSetNotice.

InterestPaymentNotice After the agent bank requested the borrower to make an interest payment, the
                      agent bank calculates each lender’s interest amount. An InterestPaymentNotice
                      is then sent to each lender to communicate this information.

RepaymentNotice        The agent bank requests the borrower to make a principal repayment. The
                       borrower makes a payment to the agent bank. The agent bank then calculates
                       each lender’s principal amount. A RepaymentNotice is sent to each lender. This
                       is the position when a scheduled principal repayment is made. Due to the nature
                       of credit agreements, the borrower can make two additional categories of
                       repayments against any outstanding contracts:
                       • unscheduled Mandatory Principal Repayments
                       • unscheduled Voluntary Principal Repayments.

OnGoingFeeNotice       The agent bank requests the borrower to make a fee payment according to the
                       credit agreement, upon which the fee is paid. The agent bank then calculates
                       each lender’s fee amount and sends an OnGoingFeeNotices to each lender. The
                       fee types included in this specification are as follows:
                       • Commitment Fee: Calculated as a percentage of the unutilised portion of the
                       facility.
                       • Utilisation Fee: Calculated as a percentage of the utilised portion of the facility.
                       This fee type is subject to banding rule, that is different portions of the utilisation
                       amount may be subject to different percentages.
                       • Facility Fee: Calculated as a percentage of the global commitment amount of a
                       facility.
                       • Letter of Credit Fee: Calculated as a percentage of the outstanding Letter of
                       Credit exposure within a facility.
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MX Name                     Purpose

OneOffFeeNotice             The agent bank requests the borrower to make a fee payment according to the
                            credit agreement, upon which the fee is paid. The agent bank then calculates
                            each lender’s fee amount and sends OneOffFeeNotices to each lender. The
                            following fee types are included in this specification:
                            • Amendment Fee: A fee charged to the borrower for an amendment being made
                            to the originally agreed credit agreement. The fee is based on a rate (as stated in
                            the agreement) applied to the current commitment level.
                            • Waiver Fee: This fee represents any fee paid by the borrower to the syndicate
                            lenders or agent bank for accepting or processing a waiver request. The
                            borrower sends a waiver request to obtain approval from the syndicate lenders
                            for any requirement outside of the terms of the agreement.
                            • Upfront Fee: Also known as participation fee or arrangement fee. It represents
                            compensation to the members of the lending syndicate in return for their
                            commitment of capital.
                            • Facility Extension Fee: Represents any fee paid by the borrower to the
                            syndicate lenders for extending an existing facility.
                            • Funding Fee: Fee associated with the funding requirements of a given facility.



                                                 Drawdown Notice

                                            Interest Payment Notice

                                           Principal Repayment Notice                               Market
   Investment                                                                                   Infrastructure
    Manager                              On-Going Fee Payment Notice                            (DTCC/EOC)
                                                                                                       or
                                          One-Off Fee payment Notice                             Loan Agent



The release 2.0 (FpML 4.5) will be delivered at later date.



OTC Derivatives

Business Process                    Definition

Notification of a new Contract      After a contract is agreed and allocated between the asset manager
                                    and the dealer, the asset manager informs its custodians about the
                                    details of the contract. The notification can be done either before or
                                    after the contract is confirmed between the dealing counterparties.

Notification of an Increase         The asset manager notifies the custodian of an increase of the
                                    contract notional.

Notification of a Novation          The asset manager notifies the custodian of a full or partial novation of
                                    an existing contract.

Notification of a Partial           The asset manager notifies the custodian of a partial termination of an
Termination                         existing contract.

Notification of a Full Termination The asset manager notifies the custodian of a full termination of an
                                   existing contract.
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Notification of a Cancellation     The asset manager notifies the custodian of the cancellation of the
                                   notification of a new contract.

Notification of the cancellation   The asset manager notifies the custodian that an increase of the
of an Increase                     contract notional is cancelled.

Notification of the cancellation   The asset manager notifies the custodian that a full or partial novation
a Novation                         is cancelled.

Notification of the cancellation   The asset manager notifies the custodian that a partial termination is
a Partial Termination              cancelled.

Notification of the cancellation   The asset manager notifies the custodian that a full termination.
a Full Termination                 is cancelled.

Confirm a new trade                After a trade has been agreed between buy-side and sell side, both
                                   parties confirm the elements of the trades from their respective point of
                                   view.

Modify an already confirmed        One or both parties send a modification to update or correct elements of
trade                              the trade.

Cancel an already confirmed        One or both parties cancel an already sent confirmation.
trade

Initiate a Credit Transfer on      The asset manager sends the CustomerCreditTransferInitiation message
behalf of a fund                   to the custodian. This message requests movement of funds from the
                                   debtor’s account to a creditor.

Provide the status of a            The custodian sends the PaymentStatusReport message to the asset
payment instruction                manager. This message informs this party about the positive or negative
                                   status of an instruction. It can also report on a pending instruction.

Cancel a payment instruction       The asset manager sends the PaymentCancellationRequest message to
                                   the custodian. This message requests the cancellation of an instruction
                                   previously sent.

Reverse a payment instruction      The asset manager sends the CustomerPaymentReversal message to
                                   the custodian. This message reverses a payment previously executed.

Request the collection of funds The asset manager sends the CustomerDirectDebitInitiation message to
                                the custodian. This message requests single or bulk collection(s) of
                                funds from one or various debtor’s account(s) for a creditor.
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A.4 FIX Standards
FIX – Pre-trade Trade

Name                            Purpose

Indication of Interest          Unsolicited list of offerings from the sell-side, sent from the executing
                                party (e.g. Broker / Dealer) to the IM.

Quote Request                   Unsolicited inquiry for bids wanted from the buy-side.Unsolicited; can
                                also be used to identify an instrument based on attributes, learn a
                                security identifier or to calculate size pre-trade. It is sent by the IM to the
                                executing party.

Quote                           This is sent by the executing party back to the IM in response to a Quote
                                Request.

New Order Single or Multi-Leg   This can be sent unsolicited by the IM to the executing party, or in
                                response to a Quote or firm Offering.

Execution Report                This is sent by the executing party to the IM immediately in response to
                                New Order and each time the state of the order changes.

FIX – Post trade/Pre-settlement

Name                            Purpose

Allocation Instruction          This is sent by the IM to the executing party, and follows up New Order
                                before or after the trade is filled. It is used to indicate how a trade is
                                allocated into specific accounts.

Allocation Instruction Ack      This is sent by the executing party to the IM to acknowledge receipt of
                                the allocation instruction, but not yet accepted, or can report errors in
                                the allocation instruction message.

Allocation report               This is sent by the executing party to the IM to accept and confirm the
                                allocation instruction, and conveys data for each sub-account (i.e. net
                                money, accrued interest, etc.).

Allocation report Ack           This is sent by the IM to the executing party to confirm the allocation
                                report and its calculations or to reject the allocation report.



B. What is in it for you? - Calculating your business case for SWIFT
As an IM, ask yourself the following questions:
      Are your business volumes fluctuating?
      Fluctuating volumes make it very hard for institutions to adequately staff up for peak
      volumes. With SWIFT messaging, you can reduce the manual effort and thus reduce
      the dependency on volumes.
      Quote from an IM already using SWIFT: Our transaction volumes vary significantly
      from one day to the next. However, the effort involved in generating our SWIFT based
      settlement instructions that are sent to custodians is limited given the high level of
      automation we have achieved in this area – we therefore barely notice the volume of
      settlement instructions sent from day-to-day.
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Are you using several proprietary terminals?
Proprietary terminals often look like the most cost-effective way of communicating
with counterparties. There is however an important hidden cost in terms of training
and re-keying data. SWIFT estimates (based on feedback from a number of IMs) that
the cost of a proprietary terminal averages EUR 25,000 per year.
Quote from an IM already using SWIFT: Before we had SWIFT, we had proprietary
terminals all over the office. Staff needed to be trained on all these different systems,
and data was re-keyed all day long. Now, we simply have one system.

Are you still sending and receiving a lot of faxes?
Faxes are labour intensive. Even if you are using an autofax facility, the counterparty
will still be faced with manual input. This manual input increases the cost and the risk
of faxes. Now that more and more industry players are starting to surcharge for faxes
received, there is an increased need to look at alternative communication channels.
Quote from an IM already using SWIFT: If we were to report everything over fax, we
would probably need twice as many people to do this. We have increased our traffic
by tenfold without really increasing the headcount.


Do you need to talk to several different brokers, custodians, banks…and a multitude
of other counterparties?
Setting up and maintaining communication channels with a multitude of
counterparties is labour intensive and costly. If they all have their own particular way
of communicating, this further increases costs and reduces efficiency. With SWIFT,
you are sure you always communicate using the same language, while adding
another counterparty is done without additional effort or investment.
Quote from an IM already using SWIFT: The cost of SWIFT is insignificant compared
to the cost of other more manual messaging means.

Is reputation one of the most important assets of your institution?
For most IMs, reputation is the single most important asset. Risk reduction is
therefore key to the success of the institution. Guaranteed and timely delivery of your
instructions and other messages will make sure that your good reputation is not
negatively impacted by failing settlements, late reporting, etc.
Quote from an IM already using SWIFT: Without SWIFT we would certainly need to
double the number of operations staff and maybe even more. Fluctuations in
business cycles cause problems because you have to hire temporary staff to handle
additional volumes. This increases risk and further reduces efficiency.
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      Are you using e-mail or the internet for confidential or time critical communication?
      E-mail and internet are certainly the most frequently used communication channels of
      this day and age. The need for follow up, lack of standardisation and increased risk,
      however puts an additional burden on your operations staff. Make sure they can
      focus on customer oriented tasks instead of being bogged down with operational
      issues.
      Quote from an IM already using SWIFT: SWIFT brings intangible benefits as well. By
      automating the operations processes, operations staff can focus on more challenging
      tasks. Job satisfaction increases and staff turnover drops.


      Do you anticipate your trading volumes to grow significantly in the future?
      If you are looking at increasing your volumes, SWIFT will enable you to automate, so
      that doubling your volumes does not necessarily mean doubling your staff.
      Automation is the key to success for increased volumes. SWIFT will help you drive
      automation in your organisation.
      Quote from an IM already using SWIFT: The scalability we get through SWIFT
      automation is huge. We would not have been able to support our growth and stay in
      this business without it.
      If you answered yes to any of the above questions, SWIFT can help you.
      To find out what your costs and potential savings from joining SWIFT will be, contact
      the SWIFT Sales Representative in your region. They can work with you to calculate
      and compare the costs of your existing environment to what it would be if you joined
      SWIFT.
      If you are already an existing SWIFT user, SWIFT can work with you to find out what
      additional costs (if any) you will incur, and increased potential savings you can attain,
      through greater use of SWIFT.

Note: please refer to official source documentation provided by SWIFT for updates.
                                                                                                             175

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C. Roadmap by Asset class and business function

                    Order w/     Execution      Trade confirmation   Allocation  Matching         Settlement
                    Custodian    with Brokers   with Brokers         with Broker with Broker      with Custodian

Currency exchange

FX                  MT 380/381   N/A            MT 300               MT 303      Accord           MT 304

FX Swaps            N/A          N/A            MT 300               N/A         Accord           MT 304

NDF                 N/A          N/A            MT 300               N/A         Accord           MT 304

Vanilla option      N/A          N/A            MT 305               MT 303      Accord           N

Exotic Option       N/A          N/A            MT 306               N/A         Accord           N

Loan deposit

Fixed loan or       N/A          N/A            MT 320               N/A         Accord           MT 321
deposit

Call Notice         N/A          N/A            MT 330               N/A         Accord           N/A

OTC Derivatives

FRA                 N/A          N/A            MT 340/ MT 341       N/A         Accord           N/A

IRS                 N/A          N/A            MT 36x/ FpML         N/A         Accord planned   FpML
                                                                                 for FpML

Single Currency     N/A          N/A            FpML                 N/A         Accord planned   FpML
Swaptions – SPT

Cap Floors and      N/A          N/A            MT 360/ FpML         N/A         Accord planned   FpML
Collars – CPC                                                                    for FpML

Interest Rate Swaps N/A          N/A            MT 36x/ FpML         N/A         Accord planned   FpML
(including OIS)                                                                  for FpML

CD                  N/A          N/A            FpML                 N/A         Accord planned   FpML

Single Credit
Default Swaps –     N/A          N/A            FpML                 N/A         Accord planned   FpML
CDS

Index Credit
Default Swaps –     N/A          N/A            FpML                 N/A         Accord planned   FpML
CDX

Index Tranche
Credit Default      N/A          N/A            FpML                 N/A         Accord planned   FpML
Swaps – CXT.

Basket Credit
Default Swaps –     N/A          N/A            FpML                 N/A         Accord planned   FpML
CDB

Basket Tranche
Credit Default      N/A          N/A            FpML                 N/A         Accord planned FpML
Swaps – CBT
176

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                   Order w/      Execution      Trade confirmation   Allocation  Matching      Settlement
                   Custodian     with Brokers   with Brokers         with Broker with Broker   with Custodian

Equities and FI, Listed derivatives

Equities                         MT 502/ MT
                                 515 / FIX

Fixed                            MT 502/ MT
Income                           515 / FIX

Commodities

Precious metals                  MT 6xx

Physical and       FpML
non physical



Interest Rate swaps
Cap Floors and Collars – CPC (360) + FpML
Interest Rate Swaps (including OIS) (36x) +FpML

Credit Default Rate swaps
Single Credit Default Swaps – CDS
Index Credit Default Swaps – CDX
Index Tranche Credit Default Swaps – CXT.
Basket Credit Default Swaps – CDB
Basket Tranche Credit Default Swaps – CBT




“None of us is as smart as all of us”
With a big thank you to all the people from the industry and SWIFT who have helped to put this book together
                                                                                                          177

                                                                                 SWIFT for Investment Managers




D. Glossary

Acronym                 Definition

Accord                  SWIFT’s matching and netting service. It provides financial institutions with a
                        complete foreign exchange, money market and derivatives solution.

BIC                     Bank Identifier Code: An International Standardisation Organisation, technical
                        code that uniquely identifies a financial institution. SWIFT is the Registration
                        Authority for BICs. The BIC consists of eight or eleven characters, comprising a
                        financial institution code (four characters), a country code (two characters), a
                        location code (two characters), and for FIN and IFT, an optional branch code
                        (three characters).

CUG                     Closed User Group: A subset of Customers grouped for the purposes of their
                        use of the relevant SWIFT Services and Products when accessing a Service.

FIX                     Financial Information eXchange: A message standard developed to facilitate the
                        electronic exchange of information related to securities transactions.

FIX Connector           A software module positioned between a FIX Engine and the SWIFTNet Link that
                        enables a Financial Information eXchange session to take place over SWIFTNet.

ISO                     International Organisation for Standardisation: Based in Geneva, the ISO is
                        responsible for the development of international standards.

MA-CUG                  Member Administered Closed User Group: A CUG administered by a SWIFT
                        Member (e.g. allowing for communication via SWIFTNet between a Member and
                        the Member’s own customers who are not SWIFT users).

SIPN                    Secure IP Network: SWIFT’s worldwide, highly secure and extremely reliable
                        virtual private network. The SIPN is based on the Internet Protocol (IP) and
                        related technologies and provides transport services required by SWIFTNet
                        services.

SNL                     SWIFTNet Link (SNL) application-to-application access mode ensures technical
                        inter operability between users by providing the minimal functionality required to
                        communicate over the SWIFTNet services.

XML                     Extensible Mark-up Language: A standard for data representation and
                        manipulation. XML is a meta-language subset of SGML (Standard Generalised
                        Mark-up Language) that has been specifically designed for describing and
                        exchanging structured data on the World Wide Web. With XML a document is
                        divided into three parts: structure, content and style.

XML naming conventions for Message Identifiers as follows:
                        The Message is given a Message Identifier, defined by the ISO 20022
                        Registration Authority. The Message Identifier uniquely identifies the message
                        and has the following structure: “xxxx.nnn.aaa.bb”, whereby
                        — xxxx is an alphabetic code in four positions (fixed length) identifying the
                          Business Process,
                        — nnn is an alphanumeric code in three positions (fixed length) identifying the
                          Message Functionality,
                        — aaa is a numeric code in three positions (fixed length) identifying a particular
                          flavour (variant) of Message Functionality,
                        — bb is a numeric code in two positions (fixed length) identifying the version, and
                        — ‘.’ is the delimiter character between elements.
Index
                                                                                           179

                                                                   SWIFT for Investment Managers




Index
Section 1 Introduction
1         Executive summary                                                                 2
1.1        Investment Manager (IM)                                                          2
1.2        SWIFT                                                                            2
1.3        SWIFT in the investment management markets                                       2
1.4        Investment Managers’ needs and how SWIFT can help                                5
1.5        The value of SWIFT to investment managers                                        8


Section 2 SWIFT’s value proposition for investment managers
          SWIFT’s value proposition for investment managers                               11


Section 3 Business areas of an investment manager and SWIFT’s solutions
3         Business areas of an investment manager and SWIFT’s solutions 21
3.1        Overview                                                                       21
3.2        SWIFT solutions per business activities                                        22
3.3        Asset Management                                                               25
3.3.1      Pre-Trade/Trade: Equities, Fixed Income, Listed derivatives                    27
3.3.2      Post/Trade, Pre-settlement: Trade confirmation: Equities, Fixed Income,
           Listed derivatives                                                      29
3.3.3      Post/Trade, Pre-settlement: Trade confirmation: FX, MM and FX options 31
3.3.4      Post Trade/Pre-settlement: Syndicated Loans                                    33
3.3.5      Post/Trade, Pre-settlement: Trade confirmation: Commodities                    36
3.3.6      Post/Trade, Pre-settlement: OTC Derivatives                                    37
3.3.7      Clearing and settlement: Securities                                            39
3.3.8      Clearing and settlement: Forex through SWIFT CLS Third Party Service           40
3.3.9      Securities reporting                                                           42
3.3.10     Asset servicing and administration: Data distribution                          44
3.3.11     Asset servicing and administration: Corporate Actions                          45
3.3.12     Asset servicing and administration: Proxy Voting                               47
3.3.13     Portfolio Administration                                                       49
3.3.14.1   Payments and cash management: Payments initiation                              50
3.3.14.2   Payments and Cash management: Cash Reporting                                   52
3.3.14.3   Payments and Cash management: Exceptions and investigations                    55
3.3.14     Collateral Management                                                          57
3.3.15     Regulatory reporting                                                           59
3.4        Funds                                                                          61
3.4.1      Funds flows                                                                    62
180

SWIFT for Investment Managers




Section 4 Initiatives and solutions
4         Initiatives and initiatives                                  65
4.1             Light connectivity                                     65
4.2             Trade capture                                          66
4.3             Automating FX Allocations                              66
4.4             FX and securities post trade/pre-settlement            66
4.5             Securities Pre-settlement matching: Accord             67
4.6             SSI                                                    67
4.7             Total Portfolio Valuation                              68
4.8             Collateral management and portfolio reconciliation     68
4.9             Securities Financing                                   69
4.10            Commodities                                            70
4.11            Funds distribution                                     70


Section 5 Applications
5         Applications                                                 71
5.1             SWIFT’s Accord matching application                    71
5.2             SWIFT’s Affirmations application                       73
5.3             Securities Market Infrastructures                      75
5.4             Banking Market Infrastructures                         76


Section 6 Standards
6         Standards                                                    77
6.1             Introduction                                           77
6.2             SWIFT Standards                                        77
6.2.1           ISO (International Organisation for Standardisation)   77
6.2.2           The Giovannini Group                                   77
6.2.3           Financial Products Markup Language (FpML)              78
6.2.4           The Financial Information eXchange Protocol (FIX)      78
6.3             Market Practices                                       78
6.3.1           Global Market Practice Groups                          78
6.3.2           Securities Market Practice Groups (SMPG)               78
6.3.3           Payments Market Practice Groups (PMPG)                 79
6.3.4           National Market Practice Group (NMPGs)                 79


Section 7 Messaging
7         Messaging                                                    81
7.1             Transaction exchange                                   81
                                                                                          181

                                                                  SWIFT for Investment Managers




7.1.1     FIN                                                                            81
7.1.2     FINInform                                                                      81
7.1.3     FINCopy                                                                        82
7.2       Bulk data exchange                                                             82
7.2.1     Fileact                                                                        82
7.3       Interactive services                                                           82
7.3.1     Interact                                                                       82
7.3.2     Browse                                                                         83
7.4       Directories                                                                    83
7.5       Business intelligence                                                          85
7.6       Simulation Testing and Qualification Services (STaQS)                          85


Section 8 Connectivity
8         Connectivity                                                                   87
8.1       Who can connect to SWIFT?                                                      87
8.2       Is my institution eligible to join?                                            88
8.3       Categories of SWIFT User (until September 2009)                                88
8.3.1     SWIFT’s Legal Definition of a Fund Administrator                               91
8.3.2     SWIFT Categories and IMs                                                       92
8.4       Categories of SWIFT User (from September 2009)                                 92
8.5       SWIFT Pricing and Fees                                                         93
8.5.1     Joining and connecting to SWIFT                                                94
8.5.2     Using SWIFT Services and Business Solutions                                    95
8.5.3     Other SWIFT Services                                                           96
8.6       SWIFT Connectivity Solutions                                                   96
8.6.1     Direct Connectivity                                                            98
8.6.2     Indirect Connectivity                                                          99
8.6.3     Interfaces                                                                     99


Section 9 Service
9         Service                                                                       101
9.1       Business Assessment Programme                                                 101
9.2       SWIFT Partner Programme                                                       101
9.2.1     Value Based Partner Segmentation                                              102
9.2.1.1   SWIFT Registered Vendors                                                      102
9.2.1.2   SWIFT Solution Providers                                                      102
9.2.1.3   SWIFT Partners                                                                103
182

SWIFT for Investment Managers




9.2.2           SWIFTReady Certification of Solution Components                   103
9.2.2.1         SWIFTReady Applications                                           103
9.2.2.2         SWIFTReady Services and Expertise                                 103
9.2.2.3         SWIFTReady Connectivity                                           104
9.2.3           Promotion of SWIFT Solution Providers and SWIFT Partners          104
9.2.3.1         Listing                                                           104
9.3             SWIFT Training                                                    105


Section 10 About SWIFT
10         About SWIFT                                                            107
10.1            Community inspired                                                107
10.2            History and Evolution                                             107
10.3            Sibos                                                             109


Appendix
A.       Details of standardised messaging                                        111
A.1.            FIN Standards                                                     111
A.2.            MX Standards                                                      148
A.3.            FpML Standards                                                    169
A.4.            FIX Standards                                                     172
B.              What is in it for you? Calculating your business case for SWIFT   172
C.              Roadmap by Asset class and business function                      175
D.              Glossary                                                          177
                                                                                               183

                                                                       SWIFT for Investment Managers




Further Information
 Further Information
To obtain further information about SWIFT or on any of the SWIFT services and products
please contact your regional account manager.
Alternatively visit SWIFT’s web site at www.swift.com where you can find detailed overviews of
SWIFT’s business solutions under the Products & Services tab.


North & Latin Americas

Brazil                                           United States - New York
Avenida Paulista, 1048                           7 Times Square
3 andar                                          45th floor
01310-100 Sao Paulo SP                           New York, NY 10036
Tel: +55 11 3514 9000                            Tel: +1 212 455 18 00
Fax: +55 11 3514 9001                            Fax: +1 212 455 18 17
SWIFT BIC: SWHQ BR RJ                            SWIFT BIC: SWHQ US 3N

                                                 United States - San Francisco
                                                 50 California Street
                                                 Suite 1601
                                                 San Francisco, CA 94111
                                                 United States
                                                 Tel.: +1 415 277 5401
                                                 Fax: +1 415 277 5403

Asia Pacific

Australia                                        Hong Kong
Suite 3202                                       31/F One International
AMP Centre                                       Finance Centre
50 Bridge Street,                                1 Harbour View Street
Sydney NSW 2000                                  Central
Tel: +61 2 92 25 8100                            Tel: +852 2107 8700
Fax: +612 92 25 8111                             Fax: +852 2107 8733
                                                 SWIFT BIC: SWHQ HK HH

India                                            Japan
Unit No.303, Ceejay House                        2nd floor - AIG Building
Plot No. F, Shivsagar Estate                     1-3 Marunouchi 1-chome
Dr. A.B Road, Worli                              Chiyoda-ku, Tokyo 100
Mumbai 400018                                    Tel: +81 3 5223 7400
Tel: +91-22-66156971                             Fax: +81 3 5223 7439
Fax: +91-22-66156974                             http://www.swift.com/jp
                                                 SWIFT BIC: SWHQ JP JT
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SWIFT for Investment Managers




People’s Republic of China             Shanghai
Units 819 - 821                        Unit 4005-4007, One Lujiazui
8th Floor                              No.68 Central Yincheng Rd
No. 7 Financial Street                 Shanghai 200120
Winland International Finance Centre   Tel: +8621 6182 8300
Xicheng District                       Fax:+8621 6182 8308
Beijing 100034
Tel: +86 10 6658 2900


Singapore
Unit 16-02, 80 Robinson Road
Singapore 068898
Tel: +65 6347 8000
Fax: +65 6347 8099




EMEA

Austria                                HQ & Belgium
SWIFT Austria GmbH                     Headquarters
Fischhof 3/6                           Avenue Adèle 1
Reception: 1st floor                   B-1310 La Hulpe
A-1010 Vienna                          Tel: +32 2 655 31 11
Tel: +43 1 74040 2372                  Fax: +32 2 655 32 26
Fax: +43 1 74040 2379                  SWIFT BIC: SWHQ BE BB


France                                 Germany
Opera Trade Center                     20th Floor, City-Haus I
4 rue Auber                            Friedrich-Ebert-Anlage 2-14
75009 Paris                            60325 Frankfurt am Main
Tel: +33 1 53 43 23 00                 Tel: +49 69 7541 2200
Fax: +33 1 53 43 23 90                 Fax: +49 69 7541 2290



Italy                                  South Africa
Corso G. Matteotti, 10                 Unit 18, 2nd Floor
20121 Milano                           1 Melrose Boulevard
Tel: +39 02 7742 5000                  Gauteng 2076
Fax: +39 02 7742 5090                  Tel: +27 11 250 5346
                                       Fax: + 27 86 644 4670
                                                                              185

                                                      SWIFT for Investment Managers




Spain                             Sweden
Edificio Cuzco IV                 Oxtorgsgatan 4, 7th floor
Paseo de la Castellana 141, 22A   Stockholm
28046 Madrid                      Tel: +46 8 508 95 300
Tel: +34 91 425 1300              Fax: +46 8 508 95 301
Fax: +34 91 425 1310

Switzerland                       United Arab Emirates
Freischützgasse 10                Office 42
8004 Zurich                       Level 15
Tel: +41 43 336 54 00             The Gate Building
Fax: +41 43 336 54 10             P.O. Box 506575
                                  Dubai
                                  Tel: +971 4 425 0900
                                  Fax: +971 4 425 0160

United Kingdom
7th floor, The Corn Exchange
55 Mark Lane
London EC3R 7NE
Tel: +44 20 7762 2000
Fax: +44 20 7762 2222
SWIFT BIC: SWHQ GB 2L
Interested in joining us?                                 SWIFT
Visit our website www.swift.com/careers to apply online   Avenue Adèle, 1




                                                                            55738 - JAN 2009
and discover all our other career opportunities.          B-1310 La Hulpe
                                                          Belgium
Wish to know more about SWIFT?
                                                          +32 2 655 31 11
Browse our website www.swift.com

				
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