05. Mod 5 - Related transactions Flashcards
A financial institution receives a credit transfer from another financial institution one day before settlement and finds out that the beneficiary account is closed. Which related message does the receiver send to the sender?
A : A reject
Rejects are generated by a financial institution (or Payment Service Provider) to inform its customer or another financial institution that an instruction cannot be executed. They are sent before settlement date.
Which of the following statements are correct about the reversal?
B : A reversal can be exchanged between financial institutions.
D : A cancellation request may be transformed into a reversal in certain cases.
A reversal is exchanged between customers and financial institutions or between financial institutions to reverse a credit transfer or a direct debit instruction that has been settled. It is exchanged after the settlement of the initial instruction and results in a funds transfer. The cancellation request of previously sent direct debit results in a reversal if the payment has already been executed.
When a bank receives a MT 103 message, how does it know it is a reject?
B : The MT 103 contains the field 72 Sender to Receiver Information and the code REJT is provided in that field.
To find out if a MT 103 message is a reject, the receiving bank checks if it contains the field 72 Sender to Receiver Information and if the code REJT is provided in that field.
What is the equivalent of a MT 103 reject in the SWIFT MX standard?
A : MX Pacs.002
What is the equivalent of a MT 103 return in the SWIFT MX standard?
B : MX Pacs.004
What are differences between the Reject and the Return messages?
B : The return is sent when the initial instruction has already been booked. The reject is sent when the initial instruction has not yet been booked.
D : In the MX standard, there are more reject reason codes than return reason codes.
The reject code or the return code is provided in the first line of the field 72. The return is sent when the initial instruction has already been booked. The reject is sent when the initial instruction has not yet been booked. Fees can be charged to a return or to a reject. In the MX standard, there are more reject reason codes than return reason codes.
In which field does the sending bank provide information about charges applied to a MT 103 return?
In the field 72 Sender to receiver information
The sending bank provides information about charges applied to a MT 103 return in the field 72 Sender to receiver information.
Which of the following statements are correct about a return MT message?
A : The Sender of the initial instruction becomes the Receiver in the return message.
B : The Receiver of the initial instruction becomes the Sender in the return message.
The Sender of the initial instruction becomes the Receiver in the return message, and the Receiver of the initial instruction becomes the Sender in the return message. The Ordering customer of the initial instruction remains the ordering customer in the return message and the Beneficiary customer remains the beneficiary customer in the return message.
For which reasons can a Corporation send a request for cancellation message?
A : Because the initial instruction was a duplicate.
B : Because the initial instruction was not justified.
C : Because the initial instruction contained a wrong amount.
D : Because the initial instruction was of Fraudulent Origin.
A cancellation request contains a reason code indicating why the payment should be cancelled. List of all possible reason codes are available in the standards MT and MX documentation.
After sending a cancellation request, a financial institution receives a MT 196 with a pending response. What did the sender of the MT 196 do?
B : It forwarded the cancellation request to the next party and is waiting for the response.
When an agent sends a MT 196 with pending response, it means, it forwarded the cancellation request to the next party and is waiting for the response.
A financial institution sends a MX pacs.008 with 10 transactions to its correspondent, then realizes that two out of the 10 transactions were duplicates. How does it request the cancellation of these transactions?
C : It sends one cancelation request for each of the duplicate transactions.
The financial institution must send one cancelation request for each of the duplicate transactions.
A financial institution receives a cancellation request from another financial institution and sends a MT 196 with the Pending Cancellation Request code (PDCR). What does it mean?
A : The cancellation request has been received and is being examined.
B : A final response will be sent after the investigation is completed.
If A financial institution receives a cancellation request from another financial institution and sends a MT 196 with the pending answer, it means 1) The cancellation request has been received and is being examined and 2) A final response will be sent after the investigation is completed.
In case an instruction is settled with the cover method, what is the recommended best practice for the cancellation request?
C : The sending bank should send a cancellation request on the announcement message and on the cover message.
In case an instruction is settled with the cover method, the sending bank should send a cancellation request on the announcement message and on the cover message.
A MT 103 or MX Pacs.008 has been executed by all the parties and the creditor account has been credited. Which of the following parties can send the response to the cancellation request?
A : The creditor bank
In case a MT 103 or MX Pacs.008 has been executed by all the parties and the creditor account has been credited, it is the creditor bank that can send the response to the cancellation request. It may consult the creditor or not.
An instruction is settled with the serial method. What can the sending bank do to cancel the instruction if it does not have an RMA relationship with the beneficiary bank?
It can send the MT 992 directly to the beneficiary bank.
If possible, it is recommended that the Debtor bank sends the MT192 directly to the Creditor Bank if they have an RMA relationship. If not, the 992 can be used as sending it does not require RMA permissions.
