An option on a foreign exchange deal may be exercised by the buyer. To confirm the settlement of the exercise of a foreign currency option, an MT 300 Foreign Exchange Confirmation may be used, with the function code EXOP in field 22A and field 21 containing the TRN of the related MT 305.
This message handles only the contract part of a foreign currency option. For the actual transfer of funds or the confirmation of credits and debits relative to the premium payment, other messages outside Category 3 are available, such as an MT 202, 203, 205 and MT 900, 910, 950, respectively.
In all cases, the common reference of the MT 305 must be quoted in the relevant reference field, that is, field 21 of the MTs 202, 203, 205, 900, 910 and field 61, subfield 7 of the MT 950, except in the case of netting agreements when an agreed alternative reference may be used.
The table below shows how the different settlement parties involved in the deal can be identified.
Party A is the sender and party B is the receiver.
Whenever possible, users should use option A to identify institutions in these fields. Use of free text, that is, option D, except when used to specify recognized code words, is strongly discouraged. Option D not only precludes party B from matching and further processing the message automatically but also is contrary to the message text standards which state that option D is only to be used when no other option is available.
The beneficiary is the seller of the premium. It is party A when receiving the premium (34R) and party B when paying the premium (34P).
Party A services account of party B. No separate settlement messages are sent.
 Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| Party A will debit party B's account. |
Party A will credit party B's account |
| :53a: not used |
:53a: not used |
| :56a: not used |
:56a: not used |
| :57a:[/account no of party B]party A |
:57a:[/account no of party B]party A |
Party B services account of party A. No separate settlement messages are sent.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| Party B will credit party A's account |
Party B will debit party A's account |
| :53a: not used |
:53a: not used |
| :56a: not used |
:56a: not used |
| :57a:[/account no of party A]party B |
57a:[/account no of party A]party B |
Beneficiary's account serviced by a financial institution other than party A or party B. The payer sends an MT 202 to its correspondent who will then send an MT 205 or equivalent to the correspondent of the payee.
The correspondent can be a branch of the party.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| Credit to party A's account with that financial institution |
Credit to party B's account with that financial institution |
| [:53a:Correspondent of party B] |
[:53a:Correspondent of party A] |
| :56a: not used |
:56a: not used |
| :57a:[/account no of party A]correspondent of party A |
:57a:[/account no of party B]correspondent of party B |
Beneficiary receives the funds through another institution (for example, BANK x for party x).
The payer sends an MT 202 to its correspondent. The correspondent will then send an MT 205 or equivalent to the correspondent of BANK x, that is, CORR x. CORR x will then send an MT 202 to BANK x who will then send an MT 950 to party x.
Field 56a identifies where BANK x will receive the funds.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| BANK A will receive the funds for party A |
BANK B will receive the funds for party B |
| [:53a:Correspondent of party B] |
[:53a:Correspondent of party A] |
| :56a:[/account no of BANK A]CORR A |
:56a:[/account no of BANK B]CORR B |
| :57a:[/account no of party A]BANK A |
:57a:[/account no of party B]BANK B |
Beneficiary to receive the funds directly through a clearing system.
The payer sends an MT 202 to its correspondent who will then send an MT 202 the payee.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| Party A will receive the funds through clearing |
Party B will receive the funds through clearing |
| [:53a:Correspondent of party B] |
[:53a:Correspondent of party A] |
| :56a: not used |
:56a: not used |
| :57J:/CLRC/party A |
:57J:/CLRC/party B |
The counterparties use their standing settlement instructions.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| :53a: not used |
:53a: not used |
| :56a: not used |
:56a: not used |
| :57D:SSI |
:57D:SSI |
The payment flows are netted based on a bilateral agreement.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| :53a: not used |
:53a: not used |
| :56a: not used |
:56a: not used |
| :57D:NET |
:57D:NET |
There is no payment (amount is zero) or the settlement details are irrelevant.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| :53a: not used |
:53a: not used |
| :56a: not used |
:56a: not used |
| :57D:NONE |
:57D:NONE |
The settlement details are not known at the time the confirmation is issued.
| Party A will RECEIVE the premium from Party B |
Party A will PAY the premium to Party B |
|---|---|
| :53a: not used |
:53a: not used |
| :56a: not used |
:56a: not used |
| :57D:UNKNOWN |
:57D:UNKNOWN |
Note: It is only necessary to quote an account number when multiple accounts are serviced for the same institution.
