4 February 2014

Latest news about MT Category 7 enhancements

Since making changes based on individual CRs was not cost effective, it was preferred to combine them and make them available to the SWIFT Community in one to two years.

The Category 7 WG (Working group) was formed in July-August 2013 to achieve the following objectives:

  • significantly enhance MTs of Category 7 that include interbank Documentary Credits and Guarantees / Standbys messages
  • enhance MT 798 guidelines for corporate-to-bank messages incorporating the Category 7 enhancements and earlier MT 798 deferred enhancements
  • prepare necessary Change Requests (CR) and submit them to TFMWG by 1st of June 2014

The rationale for this initiative was that TFMWG (Trade Finance Maintenance Working Group) had postponed the majority of the CRs submitted by the Swift Community as part of the yearly maintenance cycle. Since making changes based on individual CRs was not cost effective, it was preferred to combine them and make them available to the SWIFT Community in one to two years.

The majority of participants in Category 7 WG are also the members of the TFMWG. To ensure that this important effort included input from the entire SWIFT Community, the TFMWG called for volunteers and a number of additional specialists was added to the group. In the coming months, the Category 7 WG is also planning to reach out to other parties including but not limited to seeking legal advice and input from application vendors.

The participants to the Category 7 WG include (in alphabetical order):

  • Corinne Babok (Société Générale)
  • Patrick Boiteau (Crédit Agricole)
  • Tommy Chong (Standard Chartered Bank)
  • David Curling (Barclays)
  • Francesco Cusenza (Associazione Bancaria Italiana)
  • Ingrid De Trogoff (Crédit Agricole)
  • Michael Fenyk (Deutsche Bank)
  • Giovanni Forcati (Banca Popolare di Vicenza)
  • Kate Han or Craig Murray (HSBC)
  • Roland Hasenaecker (Commerzbank)
  • Egbert Jansen (ING)
  • David Ondo (PNC Financial Services)
  • Guosheng Wang or Shen Ma (Bank of China)
  • Janna Webskowski (U.S. Bank)
  • Debra Whittaker (JP Morgan Chase)

The participants from SWIFT include:

  • David Dobbing
  • Robert Marchal
  • Angeline Tan

The Category 7 WG meets bi-weekly via conference calls and webinars. The in-person kick-off meeting took place at Swift HQ in Belgium on 1-2-3 October 2013. A follow up in-person meeting is scheduled in March 2014.

The proposals for change that the Category 7 WG is working on are based on CRs submitted over the course of the last two to three years. It also includes proposals and ideas that have been discussed in national communities but were not submitted as formal change requests. The intent is to plan these changes over the next Standards Releases (SR 2015, 2016), based on the size of the changes, and subject to consultation with the industry. However, if new MTs are proposed, or if some of the existing MTs are significantly changed, the proposed changes will be implemented as part of the SR 2016 and not as part of SR 2015. More details about proposed CRs will be available for initial review by National Member Groups, target April 2014.

The Category 7 WG is actively progressing with its analysis and deliberations on a number of topics, including the following:

  • re-design of the MT 707 and continuation message
  • re-design of the MT 760 (and 767) into a fully structured message
  • addition of Discounting Conditions to MT 700 series
  • addition of fields to reference attachments in MT 76x
  • further structuring of party fields (like 50 and 59)
  • creation of a message similar to MT 799 using a number of coded and structured fields
  • addition of a field to specify in MT 7xx the language of documents to be presented
  • enforcement of use of MT 760 (and series) for Demand Guarantees / Standby Letters of Credit

In addition, Category 7 WG intends to develop a number of new MT messages, the following are under consideration:

For Demand Guarantees / Standby Letters of Credit:

  • Demand (incorporating Extend or Pay)
  • Demand Refusal
  • Undertaking Amendment Response
  • Advice of Transfer
  • Non-extension Request
  • Non-extension Notification

For Commercial Letters of Credit:

  • Advice of Non-conforming Reimbursement Claim

 

SWIFT contacts:
David Dobbing at david.dobbing@swift.com
Robert Marchal at robert.marchal@swift.com