SEC green lights Swift trade confirmation messages

Source: Swift

SWIFT, the financial messaging provider for more than 9,000 financial institutions and corporations in 209 countries, announced today that its request to the U.S.SEC for "no-action" relief regarding the MT515 electronic trade confirmation message format has been granted. Currently, the MT515 is used by sell-side firms to confirm the details of a securities trade with their buy-side counterparty. The "no-action" relief provides broker-dealers in the U.S. market with the confidence that the SWIFT electronic trade confirmation message can be used to comply with SEC Rule 10b-10, which requires broker-dealers to include certain information about a trade when sending confirmations to buy-side counterparties.

"The SEC granting 'no action' relief to SWIFT's MT515 message means that broker-dealers have more options for delivering Rule 10b-10 compliant confirmations," said Thomas Murphy - Managing Director, Citigroup Global Markets Inc. "This allows the efficient delivery of critical trade confirmation details to our counterparties by eliminating more costly paper-based processes. More importantly, we can reuse existing standards and operational infrastructures."

As a result of the "no-action" relief, it is anticipated that the SWIFT MT515 message format will be used to replace paper-based and other non-automated confirmation processes for non-DTCC eligible securities and for cross-border trades. In all cases, the sender and recipient remain responsible for data retention under regulations applicable to them.

Chris Church, SWIFT's CEO of the Americas and Global Head of Securities said: "This is a key milestone for SWIFT as we continue to broaden our reach in the US securities market. The SEC "no action" letter provided to SWIFT allows our customers to reuse their SWIFT infrastructure to send trade confirmations electronically thus reducing costs and increasing the rate of straight-through processing (STP) amongst counterparties."

Dayle Scher, Research Director, Securities & Investments, Tower Group, added: "Electronic trade confirmations that meet the Rule 10b-10 requirements provide asset managers and brokers the means to reduce the costs associated with producing, delivering and storing paper confirmations, and to decrease manual processes across trading counterparties."

In addition, users of the MT 515 message formats for trade confirmations will benefit from an international message standard already recognized in many major markets around the globe. The standardized message can be easily integrated into existing systems so that the data can be seamlessly created, sent and processed by the relevant systems requiring this information.

To support the the proper use of the MT515 format, SWIFT Standards has created an interim solution document that explains how to provide the information required by Rule 10b-10 using the MT515 electronic trade conformation. To download and review a copy of the interim solution document, please click here. In addition, SWIFT will provide customers with training, consulting services and implementation assistance.

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