SWIFT MT Message Categorization
Category 1 consists of the following types of customer related payment messages:
customer credit transfers
customer debit transfers
The messages in this category deal with payments, or information about payments, in which the ordering party or the beneficiary, or both, are not financial institutions.
Category 2 consists of four types of messages exchanged between and on behalf of financial institutions. These are:
financial institution transfers, which are orders for the movement of funds, originated by a financial institution, in favour of itself or another financial institution.
notice to receive, which notifies a financial institution of funds which are to be received for the Sender’s account.
payment messages issued by financial institutions to claim funds from SWIFT member banks.
cheque truncation messages, to debit, obtain credit or inform of non-payment of truncated cheques.
The messages in this category deal with payments, or information about payments, in which all parties in the transaction are financial institutions.
Category 3 Treasury Markets – Foreign Exchange, Money Markets and Derivatives includes messages exchanged for the processing of four types of deals. These messages provide details on the:
The four types of deals are:
foreign exchange contracts, that is, the buying and selling of currencies
foreign currency option contracts, that is, the buying and selling of options on currencies
the placement of money in connection with loan/deposit business
interest rate derivatives including forward rate agreements, single and cross currency interest rate derivatives, caps, floors and collars.
In each of the above types of deals, the details of the contract are agreed to by the dealers of the two contracting financial institutions by telephone, telex or other electronic means. After this agreement, a mutual exchange of confirmations takes place. Careful verification of the exchanged messages is required.
The confirmation messages within this category are confirmations of information already known to both parties. They handle only the contract part of the business and are not used for the transfer of funds, which takes place by other means.
Category 4 consists of messages that are exchanged between banks in the handling of documentary and clean collections, for example, cheque collections, as well as cash letters.
The following guideline applies when sending/receiving messages within this category:
no provision is made to handle multi-currency collections in any of the message types in this category, except for the MT 430.
Category 5 consists of messages which are exchanged among financial institutions involved in securities transactions.
Messages in this category include:
trading instructions and confirmations
settlement instructions and confirmations
registration instructions and confirmations
information about corporate actions and events
capital and income advice
statement and portfolio management information
information about securities lending transactions
information about collateral management transactions
There is also a special volume Category 5 Securities Markets Message Usage Guidelines explaining the use of the Trade Initiation and Confirmation messages and also the Settlement & Reconciliation and Corporate Action messages.
In response to a request from the community, Standards developed two new messages for the distribution of standing settlement instructions (SSIs), which today is done by fax, e-mail, telephone and SWIFT broadcast messages. These methods lack structure, are difficult to automate and are not secure. The quality of SSI data held by financial institutions is therefore less than precise and leads to incorrect and rejected payments.
The SWIFT broadcast messages MT 074 and MT 094 carry SSI information today but these messages were not designed for this purpose and therefore lack the appropriate structure to facilitate automatic processing of the data. They are also not authenticated and this issue is addressed by the new solution.
The solution consists of an SSI update notification request message (MT 670) and an SSI update notification message (MT 671). The MT 670 is sent to SWIFT by the party wishing to send an update of its (or its client’s) SSIs, and the MT 671 is sent by SWIFT to the SSI recipients, as specified in the MT 670.
The messages are structured, validated, distributed and authenticated
They cater for multiple currency updates in a single message and contain currency specific field rules
The sender of the MT 670 is able to choose to distribute the message to all BICs on the network, to all the BICs in one or more countries or to a list of specific BICs (max. 100 BICs)
For confidentiality, the MT 671 will not contain the distribution list
End-to-end integrity of the data carried in these two message types requires a different authentication mechanism to that of other authenticated messages
The new messages do not require RMA authorisation
Category 7 supports messages which are exchanged between banks involved in the documentary credit and guarantee business.
Applying the principles of the ICC UCP, the rules and basic text of these message types are given in English. Users are however, free to use any language they choose for individual credits and parts thereof.
When sending messages in this category, the following general rules apply:
the cancellation of a documentary credit, an authorisation to reimburse, or a guarantee, take the form of an amendment. An MT 792 Request for Cancellation must therefore not be used, but rather an MT 707 Amendment to a Documentary Credit, MT 747 Amendment to an Authorisation to Reimburse, or MT 767 Guarantee Amendment, respectively.
Category 8 supports messages which are exchanged between issuers and remitting agents, selling agents, and refund agents in the handling of travellers cheques. Included in this category are messages which relate to travellers cheques sales and settlement, refunds, and inventory administration.
Exchange of these messages is subject to bilateral agreements between issuers and their SWIFT member/submember selling agents, remitting agents, and refund agents (that is, these messages may only be sent and received after prior arrangements between an issuer and its member/submember agent(s)).
Category 9 consists of five types of messages exchanged between financial institutions, either on behalf of themselves, other financial institutions, or customers. These are:
balance reporting messages, which provide both cash management and nostro reconciliation information (balance and transaction details).
an interest rate change(s) message, which provides a means of advising interest rate change(s) to the Receiver of the message.
netting messages (sent between financial institutions and netting systems), which enable financial institutions to receive balances and details about transactions which are included in the netting process.
status messages, which provide a mechanism for requesting and responding to business-related information about customers or institutions.
bilateral key exchange messages, which enable financial institutions to request, exchange and cancel authenticator keys with other financial institutions.
The common group consists of messages which are common to all message categories, that is, each of the common group messages may be used in each of the message categories.
The category digit ‘n’ will be assigned to the category which best encompasses the business purpose of the message. Allocation of the appropriate category number as the first digit of the message type serves several purposes:
routing to the appropriate business unit of the Receiver,
interpretation and response to the message.