Publications

ENG

WHAT IS SWIFT CONFIRMATION MT799 / MT760

BI-1010 Capital Markets

WHAT IS SWIFT MT799 / MT760 IN BANK INSTRUMENTS..?

The MT 799 is a swift message used between banks to communicate in written form, and is usually referred to as pre-advice. For example, Bank A may send a MT 799 to Bank B stating: We confirm XXX amount on deposit and are ready to block this amount via MT 760 in favor of account XXX at your bank. Please confirm readiness and receipt. Typically, the MT 799 will be needed directly before the MT 760 is issued, and there may be small fees. Despite what most brokers may claim, the MT 799 is NOT used as collateral, and can NOT be used to enter a private placement program. Now that we know about the MT 799, lets take a look at its cousin, the Swift MT 760. The MT 760 is a swift message used to block funds in favor of someone other than the owner, collateralizing the asset via this message, while allowing for loans and liens against it. For example, most private placements require the investor to send a MT 760 to the traders account, allowing the trader to use this swift as a collateral guarantee for their bank. Again, despite what many brokers may claim, this is NOT everything you need to know about the MT 760. First and foremost, the fees for blocking a large amount of funds via MT 760 can be more than you would expect. In most cases, your bank will charge 1-2% of the value being blocked for this service. For example, on a 100M bank instrument this can be 12M that the owner must come out of their pocket with, unless they have a special relationship with their bank.

www.aacapital.com.mx

Publications

ENG

WHAT IS SWIFT CONFIRMATION MT799 / MT760

BI-1010 Capital Markets

WHAT IS SWIFT MT799 / MT760 IN BANK INSTRUMENTS..?

If you complete the MT 760 and pay the fees, you should observe everything very closely from that point on, when instrument will be used for trading. Once the MT 760 has hit the account of the trader, the line of credit should become available within 72 hours. At that time, the trader should be able to make their first bank instrument purchase, and give you a DEFINITE TIMELINE for your first profit disbursement. When blocked in someones favor, the MT 760 collateralizes assets in the form of a swift guarantee, and by doing so, allows the beneficiary to draw credit against it. This means, if the loan to the trader was defaulted on, the bank would seize the collateral and you would be out of your money! Though this scenario is possible, I would consider it rare for two reasons In todays world, no bank will loan Millions of dollars to someone they havent vetted, no matter what collateral is on hand. Second, the MT 760 is quite rare, and this usually draws attention to the beneficiary of the swift. WHEN AN INSTRUEMNT IS USED AT PPPs In summary, the MT 760 can be safe. As always, the key is having a real trader and most importantly, getting your payments as scheduled. If the trader makes a statement about yields and a time line, they must ALWAYS keep in line with their promises.

www.aacapital.com.mx