Business Cancellation Request Sample by xpm19870

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									S&R Reverse Engineering –
IC update

Karine Taquet
Alexandre Kech
SWIFT Standards Securities
                             Slide 1
WARNING

 Industry Consultation is still on, so feedback on
  the decisions in this document is still welcome
 Detailssuch as ISO 20022
  message/component/element names may
  change




                                                 Slide 2
1. One Settlement Instruction and One
Confirmation
Decision
   Following the analysis of all issues and for
    consistency point of view across all S&R messages,
    1 settlement instruction and 1 settlement
    confirmation is the more logical way to go.
   Indicators will provide information about the type of
    instruction (RVP, DVP, RF, DF)
   Mapping to ISO 15022 4 messages will be based on
    message type + instruction type. Not considered a
    major coexistence issue.
   To be further validated.


                                                        Slide 3
1. One Settlement Instruction and One
Confirmation

          A                          B                            CSD                             Z

  SettlementInstruction           SettlementInstruction           SettlementInstruction
  ReceiveDelivery: RECE or DELI   ReceiveDelivery: RECE or DELI   ReceiveDelivery: RECE or DELI
  Payment: APMT or FREE           Payment: APMT or FREE           Payment: APMT or FREE


  SettlementConfirmation          SettlementConfirmation          SettlementConfirmation
  ReceiveDelivery: RECE or DELI   ReceiveDelivery: RECE or DELI   ReceiveDelivery: RECE or DELI
  Payment: APMT or FREE           Payment: APMT or FREE           Payment: APMT or FREE




                                                                                                  Slide 4
2. Listed derivatives functionality
Decision
   All agree that it should be removed from Settlement
    and confirmation messages.
   Specific notification messages (and logical suite)
    should be build or reuse of post-trade.
   Coordinate with post-trade and/or derivative projects.
   Minimum requirement: have an ISO 20022 solution to
    cover the current ISO 15022 derivatives functionality.
   Scope to be clarified during the detailed analysis
    phase.

                                                          Slide 5
3&4. Cancellation request and advice (issue 4)
Decision
   Create 2 types of Cancellation messages
     – Cancellation request
     – Cancellation advice
   Cancellation request from AO to AS
   Cancellation advice from AS to AO
   Cancellation request are rejectable, cancellation
    advice are not
   S&R and CA will have their own
   But cancellation messages should be structurally the
    same accross business areas

                                                       Slide 6
3&4. Cancellation request

     A             B                 CSD   Z

     MT 541 NEWM       MT 541 NEWM


     MT 541 CANC       MT 541 CANC




     MT 524 NEWM       MT 524 NEWM


     MT 524 CANC       MT 524 CANC




                                           Slide 7
3&4. Cancellation request

        A                              B                                CSD   Z

       SettlementInstruction              SettlementInstruction


       CancellationRequest                CancellationRequest




  IntraPositionMovementInstruction   IntraPositionMovementInstruction


        CancellationRequest                CancellationRequest




                    Applies to instructions from
                    AccOwn to AccSer that
                    can be cancelled

                                                                              Slide 8
3&4. Cancellation advice

     A             B                 CSD                 Z

     MT 508 NEWM                           MT 578 NEWM


     MT 508 CANC                           MT 578 CANC




     MT 545 NEWM       MT 545 NEWM         MT 536 NEWM


     MT 545 CANC       MT 545 CANC         MT 536 CANC




                                                         Slide 9
3&4. Cancellation advice

        A                        B                        CSD                        Z

   IntraPositionMovementAdvice                              SettlementAllegement


       CancellationAdvice                                    CancellationAdvice




      SettlementConfirmation     SettlementConfirmation     StatementofTransaction


       CancellationAdvice            CancellationAdvice       CancellationAdvice




             Applies to messages from
             AccSer to AccOwn that
             can be cancelled

                                                                                     Slide 10
3&4. Cancellation request and advice (issue 4)
Content of the cancellation message
M   Reference to the object to be cancelled
 Limited list of business data to be defined
  during detailed analysis.
   – Based on mandatory info in object to be
     cancelled
   – Based on 10 common elements?



                                                Slide 11
3&4. Cancel and replace (issue 3)
Decision
   Have 2 ``modification messages´´
     – Transaction Processing Command for PROCESSING data
     – New Replace message for modification of BUSINESS data
       (e;g.: units, amounts)
   The replace message would contain a complete settlement
    instruction, not only the modified data, to ease processing
    and audit trail.
   Would contain a reference to the replaced object and
    optionaly the same limited number of data that would exist
    in the cancellation.
   During coexistence, 20022 to 15022 possible, not the
    opposite. Acknowledged by IC group members


                                                            Slide 12
3&4. Cancellation and replace (issue 3)

     A              B                 CSD   Z

     MT 541 NEWM        MT 541 NEWM


     MT 541 CANC        MT 541 CANC


     MT 541 NEWM        MT 541 NEWM




      MT 541 NEWM       MT 541 NEWM


      MT 530 NEWM       MT 530 NEWM




                                            Slide 13
3&4. Cancellation and replace (issue 3)

        A                          B                            CSD   Z

      SettlementInstruction          SettlementInstruction


        ReplaceInstruction             ReplaceInstruction




      SettlementInstruction          SettlementInstruction


  TransactionProcessingCommand   TransactionProcessingCommand




                                                                      Slide 14
5. Status reporting
Decision
 Settlement   Transaction Status Advice
 Intra-Position   Status Advice
 Request   for Status/Statement Status Advice
 Processing   Change Command Status Advice
 Cancellation   Request Status Advice




                                                 Slide 15
5. Status reporting

     A              B                        CSD                        Z

      MT 541 NEWM        MT 541 NEWM               MT 541 NEWM


      MT 548 INST        MT 548 INST                MT 548 INST




      MT 524 NEWM                                    MT 549

           ?                                   MT 548 INST :25D::SPRC

                            MT 530

                    MT 548 INST :25D::TPRC
                                                   MT 541 CANC


                                                     MT 548 CAST




                                                                        Slide 16
5. Status reporting

          A                               B                               CSD                                Z

         SettlementInstruction               SettlementInstruction              SettlementInstruction


  SettlementTransactionStatusAdvice   SettlementTransactionStatusAdvice    SettlementTransactionStatusAdvice




   IntraPositionMovementInstruction                                            RequestForStatement

     IntraPositionMvtStatusAdvice                                          RequestForStatementStatusAdvice

                                         ProcessingChangeCommand

                                       ProcesChangeComStatusAdvice               CancellationRequest


                                                                            CancellationRequestStatusAdvice




                                                                                                          Slide 17
6. Negative sign in ISO 15022
Decision
 Align with Corporate Action logic, that is,
  posting quantity and amount with mandatory
  credit/debit information.
        detailed analysis needed for
 Further
  implementation
 Incorporate   open item 14 (DWP)




                                                Slide 18
6. Negative sign in ISO 15022
Illustration
   For Settlement Instruction and confirmation (as per
    issue 1 decision), settlement instruction type would be
    qualified as it is today in statements
     – Receive/Deliver with RECE and DELI code
     – Payment with APMT and FREE code
     – Credit/Debit at posting amount and quantity level.




                                                        Slide 19
6. Negative sign in ISO 15022
Illustration
Delivery Against Payment (543)   ReceiveDeliveryIndicator: DELI
                                 PaymentIndicator: APMT
                                 SettlementQuantity: 1000,
                                 CreditDebitIndicatior: DEBI
                                 SettlementAmount: USD2000,
                                 CreditDebitIndicator: CRED
Receipt Against Payment (541)    ReceiveDeliveryIndicator: RECE
                                 PaymentIndicator: APMT
                                 SettlementQuantity: 1000,
                                 CreditDebitIndicatior: CRED
                                 SettlementAmount: USD2000,
                                 CreditDebitIndicator: DEBI

                                                                  Slide 20
6. Negative sign in ISO 15022
Illustration
Delivery with Payment (item 14)   ReceiveDeliveryIndicator: DELI
                                  Payment Indicator: APMT
                                  Settlement Quantity: 1000,
                                  CreditDebitIndicatior: DEBI
                                  Settlement Amount: USD2000,
                                  CreditDebitIndicator: DEBI
Receipt with Payment (item 14)    ReceiveDeliveryIndicator: RECE
                                  PaymentIndicator: APMT
                                  SettlementQuantity: 1000,
                                  CreditDebitIndicatior: CRED
                                  SettlementAmount: USD2000,
                                  CreditDebitIndicator: CRED


                                                                   Slide 21
6. Negative sign in ISO 15022
Illustration
Receive Free (540)     ReceiveDeliveryIndicator: RECE
                       PaymentIndicator: FREE
                       SettlementQuantity: 1000,
                       CreditDebitIndicator: CRED

Delivery Free (542)    ReceiveDeliveryIndicator: DELI
                       PaymentIndicator: FREE
                       SettlementQuantity: 1000,
                       CreditDebitIndicator: DEBI




                                                        Slide 22
7. IDs and References in S&R
Issues with the current ISO 15022 logic
   :20C::SEME is a “catch all” field (mis)used for
    message, instruction or transaction
    identification.
   Not in line with CA
   Unclear so numerous usage.




                                                 Slide 23
7. IDs and References in S&R
Decision
   Align with the CA concept of corporate action id.
   Creation of a Settlement Tx ID identifying, at the
    instructing party level, a settlement transaction from
    creation to end of life.
   Each message/document exchanged in the framework
    of this settlement transaction has its identification
   Other optional identifications and references (such as
    common id, trade id, processing id for each party, etc)
    remains possible as today.


                                                             Slide 24
7. IDs and References in S&R

   The difference between an identification and a
    reference is as follows:
     – An Identification is a string of characters
       identifying a object (eg, transaction, instruction…).
     – A Reference is a string of characters identifying an
       object in another object (eg, a transaction B in a
       transaction A, an instruction in a status advice, …)
   Identification must be unique to the party creating it.



                                                              Slide 25
7. IDs and References in S&R
Illustration
 Taking    a plain vanilla settlement
 The settlement transaction is identified by party
  A as AA, by party B as BB, by the CSD as CC
  and by cpty Z as ZZ.
 In   bold are the mandatory ids and refs
 Left   aligned are IDs, right aligned are Refs.



                                                    Slide 26
7. Settlement Process

          AA                              BB                              CC                                   ZZ

  SettlementInstruction               SettlementInstruction               SettlementAllegment
  SettlementTranID: AA                SettlementTranID: BB                SettlementAllegementID: ALLEC1
  SettlementInstructionID: INXA1      SettlementInstructionID: INXB1      AccServSettlementTranID: CC



  SettlementInstructionStatus         SettlementInstructionStatus         SettlementInstruction
  SettlementTranID: AA                SettlementTranID: BB                SettlementTranID: ZZ
  SettlementStatusAdvID: STATB1       SettlementStatusAdvID: STATC1       SettlementInstructionID: INXZ1
  AccServSettlementTranID: BB         AccServSettlementTranID: CC

     SettlementInstructionID: INXA1      SettlementInstructionID: INXB1    SettlementInstructionStatus
                                                                           SettlementTranID: ZZ
                                                                           SettlementStatusAdvID: STATC1
                                      TransactionProcesCom (Hold)          AccServSettlementTranID: CC
                                      SettlementTranID: BB
                                      TransactionProcesComID: COM1            SettlementInstructionID: INXZ1


                                      TransactionProcesComStatus
                                      SettlementTranID: BB
                                      TranProcComStatAdvID: TPCSA1
                                      AccServSettlementTranID: CC

                                       TransactionProcesComID: COM1



                                                                                                               Slide 27
7. Settlement Process

         AA                             BB                              CC                                 ZZ

                                     TransactionProcesCom (Release)
                                     SettlementTranID: BB
                                     TransactionProcesComID: COM2


  SettlementConfirmation             SettlementConfirmation             SettlementConfirmation
  SettlementTranID: AA               SettlementTranID: BB               SettlementTranID: ZZ
  SettlementConfirmID: CONFB1        SettlementConfirmID: CONFC1        SettlementConfirmID: CONFC1
  AccServSettlementTranID: BB        AccServSettlementTranID: CC        AccServSettlementTranID: CC

    SettlementInstructionID: INXA1     SettlementInstructionID: INXB1     SettlementInstructionID: INXZ1




                                                                                                           Slide 28
7. Cancellation Process

          AA                           BB                           CC                                ZZ

  SettlementInstruction            SettlementInstruction            SettlementAllegment
  SettlementTranID: AA             SettlementTranID: BB             SettlementAllegementID: ALLEC1
  SettlementInstructionID: INXA1   SettlementInstructionID: INXB1   AccServSettlementTranID: CC



                                                                    CancellationAdvice
  CancellationRequest              CancellationRequest              CancellationAdviceID: CANCC1
  SettlementTranID: AA             SettlementTranID: BB             AccServSettlementTranID: CC
  CancellationRequestID: CANCA1    CancellationRequestID: CANCB1
                                                                     SettlementAllegementID: ALLEC1

  CancellationStatusAdvice         CancellationStatusAdvice
  SettlementTranID: AA             SettlementTranID: BB
  CancelStatusAdvID: CSTATB1       CancelStatusAdvID: CSTATC1
  AccServSettlementTranID: BB      AccServSettlementTranID: CC

   CancellationRequestID: CANCA1   CancellationRequestID: CANCB1




                                                                                                      Slide 29
7. Cancellation process

   Pending question:
    – Should it be possible to request
    1. either :
       – the cancellation of an instruction (eg, if one
         settlement transaction is made of more than one
         instructions)
       – or the cancellation of the settlement transaction
    2. or only to cancel the settlement
       transaction?

                                                        Slide 30
7. Status request process
Request for transaction status     Request for instruction status         Request for cancellation status



           AA BB                              AA BB                                 AA BB
  SettlementInstruction              SettlementInstruction                  CancellationRequest
  SettlementTranID: AA               SettlementTranID: AA                   SettlementTranID: AA
  SettlementInstructionID: INXA1     SettlementInstructionID: INXA1         CancellationRequestID: CANCA1


  RequestForStatus                   RequestForStatus                       RequestForStatus
  RequestID: REQA1                   RequestID: REQA2                       RequestID: REQA3
  SettlementTranID: AA
                                         SettlementInstructionID: INXA1       CancellationRequestID: CANCA1

  SettlementInstructionStatus        SettlementInstructionStatus            CancellationStatusAdvice
  SettlementTranID: AA               SettlementTranID: AA                   SettlementTranID: AA
  SettlementStatusAdvID: STATB1      SettlementStatusAdvID: STATB1          CancelStatusAdvID: CSTATB1
  AccServSettlementTranID: BB        AccServSettlementTranID: BB            AccServSettlementTranID: BB

                                       SettlementInstructionID: INXA1         CancellationRequestID: CANCA1




                                                                                                            Slide 31
7.Intra-position movement
         Acc Own initiated                            Acc Serv initiated




           AA                              BB          AA                       BB

  IntraPositionInstruction                      IntraPositionMovement advice
  IntraPositionID: AA                           AccServIntraPositionID: BB
  IntraPositionInstructionID : INXA1            IntraPositionMovAdvID : ADVB2



  IntraPositionInstructionStatus
  IntraPositionID: AA
  IntraPositionStatusID : STATUSB1
  AccountServicerIntraPositionID: BB

      IntraPositionInstructionID : INXA1


  IntraPositionMovement advice
  IntraPositionID: AA
  IntraPositionMovAdvID : ADVB1
  AccountServicerIntraPositionID: BB

      IntraPositionInstructionID : INXA1




                                                                                     Slide 32
7. Block-trade settlement

           AA1,                           BB1
                                                                     CC                               ZZ
           2, 3                           ,2, 3
  SettlementInstruction (parent)    SettlementInstruction            SettlementAllegment
  SettlementTranID: AA1             SettlementTranID: BB1            SettlementAllegementID: ALLEC1
  SettlementInstructionID: INXA1    SettlementInstructionID: INXB1   AccServSettlementTranID: CC
  Pool ID: 1234
  SettlementInstruction (child 1)
  SettlementTranID: AA2
  SettlementInstructionID: INXA2                                     SettlementInstruction
  Pool ID: 1234                                                      SettlementTranID: ZZ
                                                                     SettlementInstructionID: INXZ1
  SettlementInstruction (child 2)
  SettlementTranID: AA3
  SettlementInstructionID: INXA3
  Pool ID: 1234




                                                                                                      Slide 33
7. Block-trade settlement

           AA1,                            BB1
                                                                          CC                                 ZZ
           2, 3                            ,2, 3
   SettlementInstructionStatus (p)     SettlementInstructionStatus        SettlementInstructionStatus
   SettlementTranID: AA1               SettlementTranID: BB1              SettlementTranID: ZZ
   SettlementStatusAdvID: STATB1       SettlementStatusAdvID: STATC1      SettlementStatusAdvID: STATC1
   Pool ID: 1234                       AccServSettlementTranID: CC        AccServSettlementTranID: CC
   AccServSettlementTranID: BB1
                                         SettlementInstructionID: INXB1     SettlementInstructionID: INXZ1
      SettlementInstructionID: INXA1

   SettlementInstructionStatus (c1)
   SettlementTranID: AA2
   SettlementStatusAdvID: STATB2
   Pool ID: 1234
   AccServSettlementTranID: BB2

      SettlementInstructionID: INXA2

  SettlementInstructionStatus (c2)
  SettlementTranID: AA3
  SettlementStatusAdvID: STATB3
  Pool ID: 1234
  AccServSettlementTranID: BB3

     SettlementInstructionID: INXA3




                                                                                                             Slide 34
7. Block-trade settlement

           AA1,                           BB1,                           CC                                 ZZ
           2, 3                           2, 3
  SettlementConfirmation (Parent)     SettlementConfirmation             SettlementConfirmation
  SettlementTranID: AA1               SettlementTranID: BB1              SettlementTranID: ZZ
  SettlementConfirmID: CONFB1         SettlementConfirmID: CONFC1        SettlementConfirmID: CONFC1
  Pool ID: 1234                       AccServSettlementTranID: CC        AccServSettlementTranID: CC
  AccServSettlementTranID: BB1
                                        SettlementInstructionID: INXB1     SettlementInstructionID: INXZ1
     SettlementInstructionID: INXA1

  SettlementConfirmation (Child1)
  SettlementTranID: AA2
  SettlementConfirmID: CONFB2
  Pool ID: 1234
  AccServSettlementTranID: BB2

     SettlementInstructionID: INXA2

  SettlementConfirmation (Child2)
  SettlementTranID: AA3
  SettlementConfirmID: CONFB3
  Pool ID: 1234
  AccServSettlementTranID: BB3

     SettlementInstructionID: INXA3




                                                                                                            Slide 35
7. Reporting process

    Pending question: in case of multiple pages
     for a statement,
1.   is the statement number + page number
     sufficient (see slides 37) or
2.   should there be a page/message identification
     (see slides 38).




                                                   Slide 36
7. Reporting process (1)
                Pull Mode                                    Push Mode
                                                             Pull Mode


         BankA                 BankB                  BankA                 BankB


RequestForStatement
                                               StatementofTransaction
RequestID: REQA4
                                               StatementID: 12345
               StatementOfTransaction
StatementType: 536
                                               Page: 1/More

 StatementofTransaction                                   SettlementTranID: AA
 StatementofTransaction
 StatementIDr: 12345                                      SettlementTranID: AA2
 StatementID: 12345
 StatementofTransactionID: STAT1                          SettlementTranID: AA3
 Page: 1/More                                             SettlementTranID: AA4
                            RequestID: REQA4
                            RequestID: REQA4

            SettlementTranID: AA
             SettlementTranID: AA
            SettlementTranID: AA2
            SettlementTranID: AA2
            SettlementTranID: AA3
            SettlementTranID: AA3              StatementofTransaction
            SettlementTranID: AA4
            SettlementTranID: AA4              StatementID: 12345
                                               Page: 2/Last
                                                            SettlementTranID: AA5
                                                            SettlementTranID: AA6
 StatementofTransaction                                     SettlementTranID: AA7
 StatementID: 12345                                         SettlementTranID: AA8
 Page: 2/Last
              SettlementTranID: AA5
              SettlementTranID: AA6
              SettlementTranID: AA7
              SettlementTranID: AA8



                                                                                    Slide 37
7. Reporting process (2)
                Pull Mode                                     Push Mode
                                                              Pull Mode


         BankA                 BankB                   BankA                 BankB


RequestForStatement
                                                StatementofTransaction
RequestID: REQA4
                                                StatementID: 12345
               StatementOfTransaction
StatementType: 536
                                                StatementPageID: STAT1
                                                Page: 1/More
 StatementofTransaction
 StatementofTransaction
 StatementIDr: 12345                                       SettlementTranID: AA
 StatementID: 12345
 StatementofTransactionID: STAT1                           SettlementTranID: AA2
 StatementPageID: STAT1                                    SettlementTranID: AA3
 Page: 1/More                RequestID: REQA4              SettlementTranID: AA4
                             RequestID: REQA4
              SettlementTranID: AA
             SettlementTranID: AA
             SettlementTranID: AA2
            SettlementTranID: AA2
             SettlementTranID: AA3              StatementofTransaction
            SettlementTranID: AA3
             SettlementTranID: AA4              StatementID: 12345
            SettlementTranID: AA4               StatementPageID: STAT2
                                                Page: 2/Last
                                                             SettlementTranID: AA5
 StatementofTransaction                                      SettlementTranID: AA6
 StatementID: 12345                                          SettlementTranID: AA7
 StatementPageID: STAT2                                      SettlementTranID: AA8
 Page: 2/Last
              SettlementTranID: AA5
              SettlementTranID: AA6
              SettlementTranID: AA7
              SettlementTranID: AA8

                                                                                     Slide 38
8. Linkages

 Not to be confused with referencing
Decision
 Keep current ISO 15022 logic
 Investigate need for soft linkage indicator
 Investigate need for differentiation between
  transaction linking (this DF must be executed
  with this RF) and document linking (this
  message/doc must be processed before this
  message/doc).

                                                  Slide 39
9. COPY/CODU/DUPL
Decision
 Keep   current ISO 15022 logic
 Clarify   usage to avoid confusions




                                        Slide 40
9. COPY/CODU/DUPL

                              A                          B                           CSD   Z

                        SettlementInstruction 123        SettlementInstruction 456

                        SettlementInstruction 123
                                 DUPL
                             SettlementInstruction 123
 SettlementInstruction 123

                                      CODU
          COPY




                                      D

                                                                                           Slide 41
10&21. Hold and release
Decision
 Implement     the SMPG agreed market practice
 Hold   indicator in settlement instruction
 Processing    change command for release/hold
  instruction




                                               Slide 42
11. REPO and other securities financing
Decision
   General agreement that it should be removed from Settlement and
    confirmation messages.
   Specific securities financing messages (and needed suite) should be
    build.
   Covering all two legs transactions:
     – Repo and reverse repo
     – Securities lending and return
     – Securities Borrowing and return
     – Collateral in, opening and closing
     – Collateral out, opening and closing
   Coordinate with any existing collateral settlement project.
   Pure settlement actvities remain covered by the settlement messages.

                                                                     Slide 43
11. REPO and other securities financing
                                             B
        A                                (servicer)                       CSD   Z

   SecuritiesFinancingInstruction         SettlementInstruction 1

  SecuritiesFinancingStatusAdvice   SettlementTransactionStatusAdvice 1

                                          SettlementInstruction 2

  SecuritiesFinancingStatusAdvice   SettlementTransactionStatusAdvice 2


                                        SettlementConfirmtation 1
  SecuritiesFinancingConfirmation

   SecFinModificationInstruction         ReplacementInstruction 2


  SecuritiesFinancingStatusAdvice   SettlementTransactionStatusAdvice 2


  SecuritiesFinancingConfirmation        SettlementConfirmation 2




                                                                                Slide 44
12. Settlement transaction generated by account
servicer

   Original proposal was to keep ISO 15022 newly
    agreed logic
Decision
   All IC participants want a specific message to cover
    that process.
   The new advice would contain the settlement
    transaction details + reason for creation and current
    status.
   Once created, it becomes a normal settlement
    transaction subject to the plain vanilla settlement flows


                                                          Slide 45
12. Settlement transaction generated by account
servicer

         A                        B                             CSD   Z

  MT 548 INST :25D::IPRC//CGEN   MT 548 INST :25D::IPRC//CGEN


      MT 541 NEWM/RECO               MT 541 NEWM/RECO




          MT 548 INST                    MT 548 INST


         MT 545 NEWM                    MT 545 NEWM




                                                                      Slide 46
12. Settlement transaction generated by account
servicer

            A                               B                                  CSD   Z

 GeneratedSettlementTransactionAdvice   GeneratedSettlementTransactionAdvice




  SettlementTransdactionStatusAdvice     SettlementTransdactionStatusAdvice


       SettlementConfirmation                 SettlementConfirmation




                                                                                     Slide 47
13. Delivery Versus Delivery

 For   example, for collateral substitutions
Decision
 Keep the ISO 15022 logic, that is, link a receipt
  on securities 1 with delivery on securities 2
 Rejectof a specific message as it would lead to
  unnecessary work for a process correctly
  covered today with two plain vanilla DF and
  RF.

                                                 Slide 48
13. Delivery Versus Delivery

          A                    B                   CSD                     Z

  SettlementInstruction    SettlementInstruction   SettlementInstruction
  ReceiveDelivery: RECE    ReceiveDelivery: RECE   ReceiveDelivery: DELI
  Payment: FREE            Payment: APMT or FREE   Payment: APMT or FREE


  SettlementInstruction   vSettlementInstruction   SettlementInstruction
  ReceiveDelivery: DELI    ReceiveDelivery: DELI   ReceiveDelivery: RECE
  Payment: FREE            Payment: APMT or FREE   Payment: APMT or FREE




                                                                           Slide 49
15. MEOR, MERE, ACOW

Decision
 Keep the existing ISO 15022 logic but with
  usage clarification
 Document  all existing scenarios to avoid
  confusion on what when to use MEOR/MERE
  versus ACOW.




                                               Slide 50
16. Settlement Parties
Issues with ISO 15022
 Addition of intermediaries between
  BUYR/SELL and REAG/DEAG is complex
 Party names do not correspond to what they
  are effectively used for.
   – Place of settlement is not always the place
     of settlement…
   – Buyer is not always the buyer, eg, when two
     settlement parties are provided only.
   – …
                                             Slide 51
16. Settlement Parties
Decision
 Name    settlement parties for what they
  effectively are: Levels in a settlement chain
 Easy   inclusion of additional levels
 “Place   of settlement” to be a party in the chain




                                                  Slide 52
16. Settlement Parties: Delivery logic

       ISO 20022         ISO 15022 (plain vanilla
                         usage involving a CSD)
ReceivingParty1         PSET
ReceivingParty2         REAG
ReceivingParty3         REI2
ReceivingParty4         REI1
ReceivingParty5         RECU
ReceivingParty6         BUYR




                                               Slide 53
16. Settlement Parties: Delivery logic
        ISO 20022                                                Definition
ReceivingParty1                         First receiving party in the settlement chain. In a plain vanilla
                                        settlement, it is the Central Securities Depository where the
                                        receiving counterparty requests to receive the financial instrument.

ReceivingParty2                         Receiving party that interacts with the Receiving Party 1.

ReceivingParty3                         Receiving party that interacts with the Receiving Party 2.

ReceivingParty4                         Receiving party that interacts with the Receiving Party 3.

ReceivingParty5                         Receiving party that interacts with the Receiving Party 4.

ReceivingParty6                         Receiving party that interacts with the Receiving Party 5.


ReceivingParty1 open question
• For physical settlement, choice between:
       - it is the country of the party that will physically receive the physical securities (No MP change). OR
       - It is the party that will physically receive the physical securities (change in MP).
• For internal transfer, choice between:
       - It is the central securities depository where the receiving party would receive the securities if
       settlement takes place at CSD (no MP change) OR
       - it is the party in the settlement chain where the transfer will effectively take place (change in MP).

                                                                                                         Slide 54
16. Settlement Parties: Delivery logic (3 receiving
parties involved)

        ISO 20022                   ISO 15022
ReceivingParty1             PSET
ReceivingParty2             REAG
ReceivingParty3             BUYR




                                                      Slide 55
16. Settlement Parties: Delivery logic (4 receiving
parties involved)

        ISO 20022                   ISO 15022
ReceivingParty1             PSET
ReceivingParty2             REAG
ReceivingParty3             RECU
ReceivingParty4             BUYR




                                                      Slide 56
16. Settlement Parties: Receive logic

        ISO 20022       ISO 15022 (plain vanilla
                        usage involving a CSD)
DeliveringParty1       PSET
DeliveringParty2       DEAG
DeliveringParty3       DEI2
DeliveringParty4       DEI1
DeliveringParty5       DECU
DeliveringParty6       SELL




                                              Slide 57
16. Settlement Parties: Need to identify the
beneficiary or ordering customer?

           ISO 20022                ISO 15022
Investor                    INVE in sequence F

 During  the IC meeting, it was suggested that
  the “side” of the investor be provided.
 Today, it is not easy to identify whether the
  investor provided is on the receive or delivery
  side.
 Proposal     (to be aligned in ISO 15022?) would
  become:
                                                  Slide 58
16. Settlement Parties: Need to identify the
beneficiary or ordering customer?

         ISO 20022                 ISO 15022
ReceivingInvestor          RINV in sequence F
DeliveringInvestor         DINV in sequence F




                                                Slide 59
16. Settlement Parties: Current Market Practice?

   For plain vanilla settlement (90 % cases), MP does
    not change
   Minimum 3 levels in the settlement chain
      MP for delivery           ISO 20022 Delivery
    CSD of Cpty’s receiving       ReceivingParty1
            agent
      Receiving agent            ReceivingParty2

    Client of receiving agent    ReceivingParty3


                                                         Slide 60
16. Settlement Parties: What if more than one
depository

   Existing Market practice applies

        MP for delivery           ISO 20022 Delivery
    CSD of Cpty’s receiving            ReceivingParty1
            agent
        Receiving agent                ReceivingParty2
    Client of receiving agent          ReceivingParty3
     Place of safekeeping              DeliveringParty1


                                                          Slide 61
16. Settlement Parties: What if more than 2
depositories

CL D        CSD1                                                  CSD3         CL R
                       CSD1         CSD2           CSD3
Part        Part                                                  Part         Part



ISO 20022 Delivery     MP for delivery          MP for receipt        ISO 20022 Receipt

 ReceivingParty1            CSD 3                   CSD 1              DeliveringParty1

 ReceivingParty2      CSD 3 Participant       CSD 1 Participant        DeliveringParty2

 ReceivingParty3     Client Receiving Part   Client Delivering Part    DeliveringParty3

 DeliveringParty1           CSD 1                   CSD 3             ReceivingDepository


      As agreed at ECSDA, CSD1 and CSD 3, with the above
       info, should know that they need to go to CSD 2.

                                                                                      Slide 62
16. Settlement Parties: Physical Delivery logic (MP
change proposed)

        ISO 20022                   ISO 15022
ReceivingParty1             REAG
ReceivingParty2             BUYR

    ReceivingParty1 is the party receiving the
     physical certificates
    More (or less) parties may be involved




                                                  Slide 63
16. Settlement Parties: Internal Transfer
   Suggested during IC that the current MP for internal
    transfers should be changed.
     – ReceivingParty1 and DeliveringParty1 should be the
       party that will effectively book the transfer.
   Current logic is to always provide the settlement chain
    down to the CSD, even if the settlement takes place
    earlier in the settlement chain. Why?
     – avoid a specific settlement chain for internal transfer
       when in facts, it may end up being a normal
       settlement (eg, custodian account segregation at
       CSD).
     – limit the number of party combination scenarios

                                                              Slide 64
16. Settlement Parties: Internal Transfer logic (MP
not change)

ISO 20022 Delivery   MP for delivery      MP for receipt     ISO 20022 Receipt
 ReceivingParty1           CSD                 CSD            DeliveringParty1
 ReceivingParty2     CSD’s participant   CSD’s participant    DeliveringParty2
                          ABC                 ABC
 ReceivingParty3          Client              Client          DeliveringParty3
                     Acc at ABC: 1234    Acc at ABC: 4321


    In this case, settlement/transfer takes place at ABC.
    But if ABC had segregated accounts at CSD, it may be
     that ReceivingParty1 and DeliveringParty1 is the CSD,
     not ABC.
    Only an example…


                                                                            Slide 65
16. Settlement Parties: Internal Transfer logic (MP
change suggested)

ISO 20022 Delivery   MP for delivery     MP for receipt    ISO 20022 Receipt
 ReceivingParty1          ABC                ABC            DeliveringParty1
 ReceivingParty2          Client             Client         DeliveringParty2
                     Acc at ABC: 1234   Acc at ABC: 4321


    If ABC have segregated accounts at CSD, ABC will have
     to modify the instruction, before sendout to CSD, to
     change receivingparty1 and deliveringparty1 to become
     CSD.
    With current MP, this is not needed. Better STP
     throughout the settlement chain.



                                                                          Slide 66
17-26 Detailed open issues

   List of detailed gaps that would probably be
    maintained in ISO 15022 and included in ISO 20022
   17. Conditional delivery indicator
     Business case to be clarified
   18. Validity date in settlement instruction
     Business case to be clarified
   19. Settlement Cycle in statements
     Business case to be clarified


                                                    Slide 67
17-26 Detailed open issues

   20. Allegement rejection message
     IC is negative so far
   22. Generic Message Element
     XML Extension should be used
   23. Place of trade : VARI
     Maintenance request to be submitted
   24. Identification of place of settlement with DSS
     Pending settlement parties (open item 16)


                                                         Slide 68
17-26 Detailed open issues

 25.   Qualifier intermediary
   Maintenance request to be submitted
 26.   Ordering customer as payment parties
   Maintenance request to be submitted
   ISO 20022 Payment parties to be reused.
 Other CRs (SR 2009 and 2010) will be
  reviewed as part of the BVG/MWG


                                               Slide 69
Resulting ISO 20022 messages
   +-20 ISO 15022 messages effectively covering +- 90
    instruction type/activity combinations
   +-30 ISO 20022 messages
   Important decisions:
     – MT 540-3  1 Settlement Instruction
     – Listed derivatives and securities financing
       functionalities in dedicated messages
     – One cancellation request and one cancellation
       advice
     – Status reporting per process  +- 5 status
       messages

                                                         Slide 70
Resulting ISO 20022 messages

                                              Settlement &
                Instruction                                                        Reconciliation
                                              Reconciliation


                                                                        Reversal


                     Cancellation
 Modification
                       request




                                                               Confirmation


                                    Removal     Allegement


                                                                                    Cancellation
    Status reporting                                                                  advice




                                                                                                    Slide 71
Resulting ISO 20022 messages
Instruction Process
ISO 15022                                ISO 20022
MT 540 (NEWM)                            Settlement Instruction
MT 541 (NEWM)                            HoldIndicator: N
MT 542 (NEWM)
MT 543 (NEWM)
MT 540 (NEWM) for securities financing   Securities Financing Instruction
MT 541 (NEWM) for securities financing
MT 542 (NEWM) for securities financing
MT 543 (NEWM) for securities financing
MT 540 (NEWM) for listed derivatives     Trade Notification (post-trade project)?
MT 541 (NEWM) for listed derivatives
MT 542 (NEWM) for listed derivatives
MT 543 (NEWM) for listed derivatives


                                                                                    Slide 72
Resulting ISO 20022 messages
Instruction Process
ISO 15022             ISO 20022
MT 540 (PREA)         Settlement Instruction
MT 541 (PREA)         HoldIndicator: Y

MT 542 (PREA)
MT 543 (PREA)
MT 524 (NEWM)         Intra-Position Movement Instruction




                                                            Slide 73
Resulting ISO 20022 messages
Modification Process
ISO 15022                  ISO 20022
MT 530 (NEWM)              Transaction Processing Command
MT 540-3 :23G:CANC         Replace Instruction
MT 540-3 :23G:NEWM
MT 540-3 :23G:CANC         Securities Financing Modification Instruction
MT 540-3 :23G:NEWM
for securities financing




                                                                     Slide 74
Resulting ISO 20022 messages
Cancellation Request Process
ISO 15022                                ISO 20022
MT 540 (CANC)                            Cancellation Request
MT 541 (CANC)
MT 542 (CANC)
MT 543 (CANC)
MT 540 (CANC) for listed derivatives
MT 541 (CANC) for listed derivatives
MT 542 (CANC) for listed derivatives
MT 543 (CANC) for listed derivatives
MT 540 (CANC) for securities financing
MT 541 (CANC) for securities financing
MT 542 (CANC) for securities financing
MT 543 (CANC) for securities financing
MT 524 (CANC)
MT 549 (CANC)
                                                                Slide 75
Resulting ISO 20022 messages
Status Reporting Process
ISO 15022                                  ISO 20022
MT 549 (NEWM)                              Request For Status/Statement
MT 548 (INST) :25D::SPRC                   Request For Status/Statement Status Advice
MT 548 (INST) :25D::IPRC                   Settlement Transaction Status Advice
MT 548 (INST) :25D::IPRC (PREA)            Settlement Transaction Status Advice (trade
                                           details: on hold indicator Y)
MT 548 (INST) :25D::IPRC for listed        Trade Status (Post-Trade project)?
derivatives
MT 548 (INST) :25D::IPRC for securities    Settlement Transaction Status Advice Or
financing                                  Securities Financing Instruction Status
                                           Advice
MT 548 (INST) :25D::TPRC                   Transact. Process. Command Status Advice
MT 548 (INST) :13B::LINK//524 :25D::IPRC   Intra-Position Movement Instruction Status
                                           Advice
MT 548 (CAST) :25D::CPRC                   Cancellation Request Status Advice
MT 548 (CAST) :13B::LINK//524 :25D::CPRC

                                                                                     Slide 76
Resulting ISO 20022 messages
Status Reporting Process
ISO 15022                              ISO 20022
MT 548 (INST) :25D::IPRC//CGEN         Generated Settlement Transaction Advice
MT 540 (NEWM/RECO) for generated inx
MT 548 (INST) :25D::IPRC//CGEN
MT 541 (NEWM/RECO) for generated inx
MT 548 (INST) :25D::IPRC//CGEN
MT 542 (NEWM/RECO) for generated inx
MT 548 (INST) :25D::IPRC//CGEN
MT 543 (NEWM/RECO) for generated inx
MT 548 :23G:CAST                       Replace Instruction Status advice Or
MT 548 :23G:INST                       Settlement Transaction Status Advice
MT 548 :23G:CAST                       Securities Financing Modification Instruction
MT 548 :23G:INST                       Status advice Or
for securities financing               Securities Financing Instruction Status
                                       Advice Or
                                       Settlement Transaction Status Advice
                                                                                 Slide 77
Resulting ISO 20022 messages
Confirmation Processes
ISO 15022                                ISO 20022
MT 544 (NEWM)                            Settlement Confirmation
MT 545 (NEWM)
MT 546 (NEWM)
MT 547 (NEWM)
MT 544 (NEWM) for securities financing
MT 545 (NEWM) for securities financing
MT 546 (NEWM) for securities financing
MT 547 (NEWM) for securities financing
MT 544 (NEWM) for listed derivatives     Trade status advice (post-trade project?)
MT 545 (NEWM) for listed derivatives
MT 546 (NEWM) for listed derivatives
MT 547 (NEWM) for listed derivatives
MT 508 (NEWM)                            Intra-Position Movement Advice


                                                                                     Slide 78
Resulting ISO 20022 messages
Reversal Process
ISO 15022           ISO 20022
MT 544 (RVSL)       Reversal Advice
MT 545 (RVSL)
MT 546 (RVSL)
MT 547 (RVSL)




                                      Slide 79
Resulting ISO 20022 messages
Reconciliation processes
ISO 15022                           ISO 20022
MT 549 (NEWM)                       Request For Status/Statement
MT 535 :23G:NEWM :22F::STTY//ACCT   Accounting Statement of Holdings
MT 535 :23G:NEWM :22F::STTY//ACCT   Custody Statement of Holding
MT 536 (NEWM)                       Statement Of Transactions
MT 537 :23G:NEWM :22F::STST//STAT   Statement Of Pending Transactions
MT 537 :23G:NEWM :22F::STST//TRAN
MT 538 (NEWM)                       Statement of Intra-Position Advice
MT 586 (NEWM)                       Statement of Allegements




                                                                         Slide 80
Resulting ISO 20022 messages
Cancellation Advice Process
ISO 15022                     ISO 20022
MT 544 (CANC)                 Cancellation Advice
MT 545 (CANC)
MT 546 (CANC)
MT 547 (CANC)
MT 508 (CANC)
MT 535 (CANC)
MT 536 (CANC)
MT 537 (CANC)
MT 538 (CANC)
MT 578 (CANC)
MT 586 (CANC)




                                                    Slide 81
Resulting ISO 20022 messages
Allegement process
ISO 15022            ISO 20022
MT 578 (NEWM)        Allegement Advice
MT 586 (NEWM/PORT)   Portfolio Transfer Allegement




                                                     Slide 82
Resulting ISO 20022 messages
Removal process
ISO 15022           ISO 20022
MT 578 (REMO)       Removal Advice




                                     Slide 83
Resulting ISO 20022 messages
1.    Settlement Instruction
2.    Securities Financing Instruction
      Trade Notification (post-trade project)?
3.    Intra-Position Movement Instruction
4.    Transaction Processing Command
5.    Replace Instruction
6.    Securities Financing Modification Instruction
7.    Cancellation Request
8.    Cancellation Advice
9.    Request For Status/Statement
10.   Request For Status/Statement Status Advice
11.   Settlement Transaction Status Advice
      Trade Status (Post-Trade project)?


                                                      Slide 84
Resulting ISO 20022 messages
12.   Securities Financing Instruction Status Advice
13.   Transaction Processing Command Status Advice
14.   Intra-Position Movement Instruction Status Advice
15.   Cancellation Request Status Advice
16.   Generated Settlement Transaction Advice
17.   Securities Financing Modification Instruction Status advice
18.   Settlement Confirmation
19.   Intra-Position Movement Advice
20.   Reversal Advice
21.   Accounting Statement of Holdings
22.   Custody Statement of Holding
23.   Statement Of Transactions



                                                                    Slide 85
Resulting ISO 20022 messages
24.   Statement Of Pending Transactions
25.   Statement of Intra-Position Advice
26.   Statement of Allegements
27.   Allegement Advice
28.   Portfolio Transfer Allegement
29.   Removal advice




                                           Slide 86
WARNING

 Industry Consultation is still on, so feedback on
  the decisions in this document is still welcome
 Detailssuch as ISO 20022
  message/component/element names may
  change




                                                Slide 87

								
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