Thursday, November 9, 2017

Standard MT Release 2017 - Category 3 messages for NDF and NDO

The MT 300 is used to confirm trades in several FX products, including Non-Deliverable Forwards (NDF).  NDFs
are also supported by the MT 304 and Non-Deliverable Options (NDO) by the MT305.  As part of SR 2017, mandatory standards changes have been made to the way that NDFs and NDOs are supported in these messages.
NDFs and NDOs have long been supported using code-words in free format fields.
This has led to poor usage by many senders, which in-turn has caused operational and settlement overheads and risks.
Non-deliverable trades (MT 300, MT 304, MT 305): Addition of new fields to be used for nondeliverable trades
(NDF and NDO). These fields replace the existing use of codes in free format fields and from SR 2017 messages containing the codes will receive a NAK. OTC Derivatives (MT 300, MT 304, MT 305, MT 306, MT 340, MT 341, MTs 360 – 365):  
• Addition of optional field 35B in which an ISIN can be specified • Addition of several new reporting jurisdiction
codes MT 300 Foreign Exchange Confirmation and MT 304 Advice/Instruction of a Third Party Deal: Addition of an optional field for use in the context of market infrastructures, to allow the sender to specify the session or service in which the trade should
be processed.
MT 305 Foreign Currency Option Confirmation: Addition of text to clarify that for a nondeliverable option the
valuation date is the same is the expiry date.

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