What is the meaning of MT 760?
MT 760 Guarantee MT 760 Scope This message is sent between banks involved in the issuance of a guarantee. It is used to issue a guarantee or to request the Receiver to issue a guarantee. MT 760 Format Specifications MT 760 Guarantee Status Tag Field Name Content/Options No. M 27 Sequence of Total 1!n/1!n 1 M 20 Transaction Reference Number 16x 2 M 23 Further Identification 16x 3 O 30 Date 6!n 4 M 77C Details of Guarantee 150*65x 5 O 72 Sender to Receiver Information 6*35x 6 M = Mandatory O = Optional MT 760 Network Validated Rules There are no network validated rules for this message type. MT 760 Usage Rules When the guarantee falls under the ICC Uniform Rules for Contract Guarantees, this must be clearly stated in field 77C. The definition of this message type does not specify any characteristics or underlying agreements of the actual guaran- tee. Therefore, all specific terms, conditions and details of the guarantee are to be specified in field 77C. Since a SWIFT message is restricted to the maximum input message length, more than one MT 760 may be required to accommodate all the details of the guarantee. MT 760 Field Specifications 1. Field 27: Sequence of Total FORMAT 1!n/1!n (Number) (Total) Standards Release Guide 2003 - Final edition - February 2003172 SWIFT Standards - Category 7MT 760 PRESENCE Mandatory DEFINITION This field specifies the number of this message in the series of messages sent for a guarantee, and the total number of messages in the series. 2. Field 20: Transaction Reference Number FORMAT 16x PRESENCE Mandatory DEFINITION When the message is sent to issue a guarantee, this field must specify the guarantee number. When the message is sent to request the Receiver to issue a guarantee, this field must contain the reference of the request, as assigned by the Sender. NETWORK VALIDATED RULES This field must not start or end with a slash ’/’ and must not contain two consecutive slashes ’//’ (Error code(s): T26). 3. Field 23: Further Identification FORMAT 16x PRESENCE Mandatory DEFINITION This field further identifies the purpose of the message. CODES One of the following codes must be used: ISSUE The message is an issue of a guarantee. REQUEST The message is requesting the issuance of a guarantee. 173Standards Release Guide 2003 - Final edition - February 2003 MT 760SWIFTStandards - Category 7 4. Field 30: Date FORMAT 6!n (Date) PRESENCE Optional DEFINITION When the message is sent to issue a guarantee, this field specifies the issue date of the guarantee. When the message is sent to request the Receiver to issue a guarantee, this field specifies the date of the request. NETWORK VALIDATED RULES Date must be a valid date expressed as YYMMDD (Error code(s): T50). USAGE RULES In the absence of this field, the issue date or request date is the date on which the message was sent. 5. Field 77C: Details of Guarantee FORMAT Option C 150*65x (Narrative) PRESENCE Mandatory DEFINITION This field contains all terms, conditions and details of the guarantee. USAGE RULES If the guarantee falls under the ICC Rules for Contract Guarantees, this must be clearly stated in this field. 6. Field 72: Sender to Receiver Information FORMAT 6*35x (Narrative) In addition to narrative text, structured text with the following line formats may be used: Line 1 /8c/[additional information] Standards Release Guide 2003 - Final edition - February 2003174 SWIFT Standards - Category 7MT 760 Lines 2-6 [//continuation of additional information] or [/8c/[additional information]] PRESENCE Optional DEFINITION This field contains additional information for the Receiver. CODES One or more of the following codes may be used: BENCON The Receiver is requested to advise the beneficiary’s acceptance or non-acceptance of the terms and conditions contained in the guarantee. PHONBEN Please advise/contact the beneficiary by phone. TELEBEN Please advise/contact the beneficiary by the most efficient means of telecommunication. USAGE RULES Any code must be between slashes and must appear at the beginning of a line. Narrative text must not begin with a slash and, if used, must begin on a new line and be the last information in the field.
The SWIFT MT 760 format is a viable option - one utilized frequently in a wide range of financial transactions, not simply private placement programs. That said, the use of this procedure raises a number of issues of critical importance. Clients considering utilizing this format, therefore, should exercise a measure of caution and restraint. Let's examine some of these issues in turn... Analysis: 1) Nature of SWIFT A SWIFT MT 760 is a bank-responsible guarantee issued by the sender bank, upon instructions of its account holder, in favour of a particular transaction or counter-party. Since banks never put their own money at risk, the clients funds are "blocked" by the bank, and held by the bank as security (collateral) for the issuance of the SWIFT. The SWIFT MT 760, therefore, is more than just an inter-bank message - it is a full-blown cash-backed negotiable instrument! 2) Text The SWIFT MT 760 comes in a variety of shapes and sizes, depending on the precise text employed by the sending bank in the field specifications, particularly Field 77C. When offered a SWIFT MT 760 procedure by a Trade Group, clients should request the complete text of the SWIFT MT 760 message so there can be no "surprises" later on. And don't settle for a watered-down "broker" version of the text; the precise language of the field specifications is of critical importance. 3) Availability U.S. Banks (and some banks in the Far East) have shown a general unwillingness to issue a SWIFT MT 760. Before you can commit to any proposed transaction, therefore, you will need to first confirm that your bank will take instructions to issue the SWIFT message. And if your bank won't cooperate, you may wish to move your funds out of the bank to a more accommodating financial institution! 4) Cost Keep in mind that the bank charges for issuance of a SWIFT MT 760 are not insubstantial. And this is where we will pick up our discussion next week... ____________________________ TO BE CONTINUED ____________________________ Tamika Edmond CEO Edmond Consulting Group, LLC firstname.lastname@example.org Our "core business" is exclusively in the private placement arena. We sponsor various private placement opportunities for high net-worth "quality" clients, utilizing a wide range of banks, formats and procedures. The private placements are conducted quietly and discreetly - and at a very high level in the business. We also offer business colleagues and friends a monthly "newsletter" setting out information and updates concerning our private placement opportunities. If you wish to receive our newsletter, just send us your email address and tell us a little about yourself - and we would be happy to add you to our "mailing list".
MT 799 format SKR
Can any one out there gives some professional advice on this MT 799 format SKR ?... and how to maximise profit without running into legal issues ?
a. SWIFT is a communication system not a settlement system, settlement is done via a different route. b. Category 7 in the SWIFT standards deals with Documentary Credit and Guarantees, so, normally the message you send to the recipient has some significance to either of the above but this doesn't have to be the case. c. MT799 is a free form format; meaning it is used for purposes of delivering a message to the receiving party. It could be to show a copy of your bank statement or just to type them the message. It has no legal standing beside that of a normal email. d. If an MT799 is initialized together with a transfer of an instrument and the Message quotes a legal responsibility such as a Trust Relation, then there needs to be a general trust master relation between the communicating entities and it needs to be confirmed. If either of them is not there, the receiving bank is not bound legally to accept the conditions. e. MT799 is not a standard communication for legal matters and generally only use for comments and in DLC for fast tracking documentary inconsistencies.
f. on an SKR, it only works if it is a Global or American Depositary Receipt which is a transferable security. Since securities settle by Euroclear easier than by messaging by SWIFT and settling on a direct relation it is unusual to use the SWIFT com unit. It uses different departments and alerts compliance of unusaul activities, which result in a complete screening of the process. The current alternative between the big clearing center banks beside Euroclear is CLS (see CLS Bank).
g. an SKR which does not allow the receiving entity to either call on funds or receive funds on the end of term of SKR is of no use when the recipient does not have the liquidity to cover the transaction in itself; evaluation is generally in the range of 1 to 5 basis points for the general calculation of value for address risk in the absence of large liquid or semi liquid portfolios.