Settlement transaction types
COLI: Collateral In
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COLI marks a collateral movement seen from the collateral taker or its agent. The taker uses it both when collateral comes in and when it goes back to the giver.
- Code
- COLI
What COLI means
Collateral moves behind margin calls on OTC derivatives, securities loans, cleared positions and other secured exposures. The party that receives and holds the collateral is the taker, and its instructions carry COLI. The code describes which side of the collateral arrangement you are on, not the direction of the movement: when the taker returns excess collateral, its delivery still says COLI.
The giver’s side is COLO. Collateral delivered to a national central bank for credit operations has its own code, CNCB. Repos are financing deals rather than collateral transfers, so their legs use REPU or RVPO even though the securities act as collateral. The exposure the collateral covers can be added with :22F::COLA// in sequence E, for example SLEB (securities lending and borrowing), OTCD (OTC derivatives) or CCPC (CCP collateral).
When you see it
- On MT540 receipts of collateral after a margin call, and on MT542 deliveries when the taker returns excess collateral.
- In Singapore, where LuxCSD’s 2014 notice maps COLI to collateral in or margin in on equity instructions.
- Linked to the margin call or collateral agreement with
:20C::COLR(collateral reference) in sequence A1.
What to do next
- Use COLI on every movement you make as collateral taker, in both directions. Under EU CSDR, CSDs report settlement fails per type of transaction (purchase or sale, collateral management, securities lending and borrowing, repo, other), and custodians such as BNY pass the instructed SETR code to the CSD for that reporting. A financing or collateral movement sent as TRAD lands in the wrong bucket.
- In T2S markets the transaction type is not one of the matching fields, so the code on your instruction does not stop it matching. Some markets do match on it: Clearstream states that for KDPW (Poland) the SETR indicator is a mandatory matching criterion. There, agree the code with your counterparty, or both instructions stay unmatched with reason SETR (see unmatched settlement instructions).
- If a triparty agent manages the collateral, the movements come from the agent; check whether your custodian still expects you to instruct.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT540, MT541, MT542 and MT543: sequence E (SETDET), field 22F,
:22F::SETR//COLI. The SETR qualifier is mandatory, so every instruction carries one code (format:4!c/[8c]/4!c; with a data source scheme a proprietary code may be sent instead). - Repeated in the confirmations MT544, MT545, MT546 and MT547 (sequence E,
:22F::SETR//COLI) and in the MT548 status advice (sequence B, where SETR is mandatory when the sequence is present). - Optional in the statements: MT536 subsequence B1a2 and MT537 subsequences B2b and C2.
MX (ISO 20022)
Questions
- What is the difference between COLI and COLO?
- COLI is used by the collateral taker (the party that receives and holds collateral) and COLO by the collateral giver. Each side keeps its code whether the collateral is being delivered or returned.
- Does the collateral taker use COLO when it returns collateral?
- No. The code reflects the taker’s role, so the return delivery still carries COLI. The giver’s receipt of the returned collateral carries COLO.