Category 3: Foreign exchange, money markets and derivatives
MT305 Foreign Currency Option Confirmation
Written and maintained by ZagTrader. Last reviewed . How this page is sourced and checked
The MT305 is the Swift message the buyer and seller of a vanilla foreign currency option send each other to confirm it: call or put, style, underlying and counter amounts, strike, expiry, premium and where the premium is paid. It also confirms amendments, cancellations and the close-out of the option; exotic options use the MT306 instead.
- Message type
- MT305
- Category
- 3
- Structure
- 6 sequences, 48 fields listed
- ISO 20022
- No direct equivalent
When MT305 is used
Party A and party B, the two institutions or corporates that agreed a currency option, exchange MT305s to confirm it, each from its own point of view. An agent can send it on behalf of a client (94A AGNT) and a money broker can confirm to both sides (94A BROK). The MT305 only covers the contract and the premium: the premium payment itself goes by MT202 or similar, quoting the common reference, and an exercised option becomes an FX deal confirmed with an MT300 carrying 22A EXOP and the MT305’s field 20 in field 21.
The MT305 keeps an older layout than the other FX confirmations. Field 21 holds NEW for a new contract. Field 22 combines the function (NEW, AMEND, CANCEL or CLOSEOUT) with the common reference, whose four digits come from the strike in field 36. Field 23 packs four answers into one line: BUY or SELL, CALL or PUT, A (American) or E (European) and the underlying currency, for example BUY/CALL/E/EUR. Dates in fields 30, 31C, 31G, 31E and 34a have six digits (YYMMDD).
Expiry and settlement: 31G gives the expiry date, cut-off time and location (such as 1000 USNY for the New York cut), 31C the earliest exercise date of an American option, and 31E the latest settlement date of the resulting FX deal. Field 26F says whether exercise exchanges the full amounts (PRINCIPAL) or only the net difference (NETCASH). The economic terms are the underlying amount (32B), strike (36), counter amount (33B), premium price (37K, as PCT or points) and premium payment (34P if the sender bought the option and pays, 34R if it sold and receives), followed by the premium settlement parties 53a, 56a and 57a.
Non-deliverable and other cash-settled vanilla options are confirmed with 17F Y, a settlement currency in 32E, at least one rate source in 14S (EMT00 for currency pairs under EMTA templates) and 26F NETCASH. For options under the ISDA additional provisions for cash-settled options in deliverable currencies, 77H carries ISDACS, and 26K may name the calculation agent. The expiry date in 31G is then also the valuation date.
A close-out (surrender of the option to the seller for compensation) is a new MT305 with a new field 20, field 21 pointing to the original confirmation, CLOSEOUT in field 22, the opposite BUY or SELL in field 23, the date agreed in field 30, the closed amounts in 32B and 33B (the full amounts, or the closed part for a partial close-out) and the surrender payment in 34a. A close-out must be matched against a close-out from the other side. Amendments and cancellations agreed bilaterally use AMEND and CANCEL.
MT305 or MT306? The MT305 is for vanilla options only. The MT306 covers barrier, binary, average rate and strike options and forwards, and vanilla options with extra clauses such as optional early termination. It uses the newer layout (22A, 22C, eight-digit dates) and identifies a close-out with 22K CLST instead of a code in field 22. A vanilla cash-settled option goes in an MT305; if it has a barrier or another feature the MT305 cannot express, it moves to the MT306. An option confirmed with an MT306 must also be closed out with an MT306.
MT305 format: sequences and fields
Sequence AGeneral InformationMandatory
The whole option, its premium and how the premium is paid, in one sequence.
| Tag | Name | Status | Format | Meaning |
|---|---|---|---|---|
| 15A | New Sequence | M | Empty field | Opens sequence A. Only the tag is sent. |
| 20 | Transaction Reference Number | M | 16x | The sender’s unique reference for this confirmation. A close-out, amendment or cancellation gets its own new reference. |
| 21 | Related Reference | M | 16x | The code NEW for a new contract. Otherwise field 20 of the earlier MT305 being amended, cancelled or closed out, which is normally the sender’s own earlier reference. After a chain of amendments, quote the last one. |
| 22 | Code/Common Reference | M | 8a/4!a2!c4!n4!a2!c | The function of the message, a slash, then the common reference. Codes: NEW, AMEND, CANCEL or CLOSEOUT (surrender of the option for compensation). The reference joins the sender’s and receiver’s BICs without country code, in alphabetical order, around four digits from the strike in field 36 (rightmost non-zero digit and the three before it, zero filled). |
| 23 | Further Identification | M | 16x | Four parts separated by slashes (4a/4a/1!a/3!a): BUY or SELL (from the sender’s point of view), CALL or PUT, A (American) or E (European) style, and the underlying currency, which must be the currency of 32B. Example: BUY/CALL/E/EUR. |
| 94A | Scope of Operation | O | 4!c | BILA (principals, the default), AGNT (on behalf of a third party) or BROK (money broker). |
| 82a | Party AOptions A or J | M | A: [/1!a][/34x] 4!a2!a2!c[3!c] J: 5*40x | One legal party to the option, usually the sender or the institution it acts for. Option A with a BIC is preferred. |
| 87a | Party BOptions A or J | M | A: [/1!a][/34x] 4!a2!a2!c[3!c] J: 5*40x | The counterparty, usually the receiver or the institution it acts for. |
| 83a | Fund or Beneficiary CustomerOptions A or J | O | A: [/1!a][/34x] 4!a2!a2!c[3!c] J: 5*40x | The fund or customer for which a fund manager or agent dealt. |
| 30 | Date Contract Agreed/Amended | M | 6!n | The trade date (YYMMDD), or the date a bilateral change or close-out was agreed. Note the six-digit date, unlike the eight-digit dates of the MT300 and MT306. |
| 31C | Earliest Exercise Date | C | 6!n | The first date the buyer may exercise. Only for American style options (A in field 23). |
| 31a | Expiry DetailsOptions G or W | M | G: 6!n/4!n/12a W: 6!n/4!c | Option G: expiry date, time (HHMM) and location code, for example 270120/1000/USNY for 10:00 New York. For a cash-settled option the expiry date is also the valuation date. The SR 2025 structure also lists an option W (date and a four-character code). |
| 31E | Final Settlement Date | M | 6!n | The latest value date of the FX deal that results if the option is exercised. |
| 26F | Settlement Type | M | 9a | PRINCIPAL when both currency amounts are exchanged at exercise, NETCASH when only the difference is paid in the counter currency (used for non-deliverable and cash-settled options). |
| 39M | Payment Clearing Centre | O | 2!a | ISO country code of the clearing centre for an offshore currency, for example HK for offshore CNY. |
| 17F | Non-Deliverable Indicator | O | 1!a | Y for a non-deliverable or cash-settled option, where the seller pays the buyer the in-the-money amount, if any. N or absent: deliverable. |
| 14S | Settlement Rate SourceRepeatable | C | 3!a2n[/4!n/4!c] | The rate source used to value a cash-settled option, with optional time and location, for example EMT00 for EMTA template terms. At least one is mandatory when 17F is Y; up to two for a cross. |
| 32E | Settlement Currency | C | 3!a | The currency in which a cash-settled option settles. Mandatory when 17F is Y, not allowed otherwise. |
| 35C | Digital Token Identifier | C | 9x[/30x] | A digital token identifier for a cash-settled option against a digital token. Only with 17F Y and the code XXX in 32B or 33B. |
| 26K | Calculation Agent | C | 4!c | ISDA, JOIN, PTYA or PTYB. Optional when 17F is Y, not allowed otherwise. |
| 32B | Underlying Currency and Amount | M | 3!a15d | The underlying currency (the one named in field 23) and amount. |
| 36 | Strike Price | M | 12d | The exchange rate at which the underlying is exchanged for the counter currency on exercise. Field 22 takes four digits from it. |
| 33B | Counter Currency and Amount | M | 3!a15d | The counter currency and amount, normally the underlying amount times the strike. |
| 37K | Premium Price | M | 3!a12d | The premium as a percentage (currency code PCT, for example PCT1,2) or as points per unit of a currency (that currency’s code). |
| 34a | Premium PaymentOptions P or R | M | P: 6!n3!a15d R: 6!n3!a15d | Premium value date, currency and amount. The letter gives the direction from the sender’s point of view: 34P when the sender bought the option and pays, 34R when it sold the option and receives. On a close-out it carries the surrender payment. |
| 53a | Sender's CorrespondentOptions A or J | O | A: [/1!a][/34x] 4!a2!a2!c[3!c] J: 5*40x | Where the premium payer’s funds come from, used when the sender pays the premium. |
| 56a | IntermediaryOptions A or J | O | A: [/1!a][/34x] 4!a2!a2!c[3!c] J: 5*40x | An intermediary for the premium payment. |
| 57a | Account With InstitutionOptions A or J | M | A: [/1!a][/34x] 4!a2!a2!c[3!c] J: 5*40x | Where the premium payee receives the premium: the institution and, when needed, the account. Option J also takes /NOSI/ codes for standing instructions or netting. |
| 77H | Type, Date, Version of the Agreement | O | 6a[/8!n][//4!n] | The master agreement (for example ISDA, DERV, AFB, ICOM, ISDACN, ISDACS for cash-settled options in deliverable currencies, OTHER), with optional signing date and version. |
| 14C | Year of Definitions | O | 4!n | Which FX and Currency Option Definitions apply. Absent means 1998. |
| 72 | Sender to Receiver Information | O | 6*35x | Additional information in the /8c/ code format. |
Sequence BReporting InformationOptional
Trade repository reporting data. The repeating block B1 comes first, then the fields under "Reporting Information, continued".
| Tag | Name | Status | Format | Meaning |
|---|---|---|---|---|
| 15B | New Sequence | M | Empty field | Opens sequence B. At least one other field must follow. |
Sequence B1Reporting PartiesOptional, repeatable
| Tag | Name | Status | Format | Meaning |
|---|---|---|---|---|
| 22L | Reporting Jurisdiction | M | 35x | The regulator or regime the trade is reported to, for example ESMA, FCA or CFTC; OTHR with the name in 77A. |
| 91a | Reporting PartyOptions A, D or J | O | A: [/1!a][/34x] 4!a2!a2!c[3!c] D: [/1!a][/34x] 4*35x J: 5*40x | The party responsible for reporting. |
Sequence B1aUnique Transaction IdentifierOptional, repeatable
| Tag | Name | Status | Format | Meaning |
|---|---|---|---|---|
| 22M | UTI Namespace/Issuer Code | M | 30x | Issuer part of the UTI, often the LEI of the entity that generated it. |
| 22N | Transaction Identifier | M | 32x | Identifier part of the UTI; both parties report the same value. |
Sequence B1a1Prior Unique Transaction IdentifierOptional, repeatable
| Tag | Name | Status | Format | Meaning |
|---|---|---|---|---|
| 22P | PUTI Namespace/Issuer Code | M | 30x | Issuer part of a prior UTI. |
| 22R | Prior Transaction Identifier | M | 32x | Identifier part of a prior UTI. |
Sequence BReporting Information, continuedOptional
Partial list: the common fields. The sequence also has optional fields 96a, 22S, 22T, 17E, 35B, 17P, 17W, 17Y, 17L, 17M, 17Q, 17S and 17X, as in the MT300 reporting sequence.
| Tag | Name | Status | Format | Meaning |
|---|---|---|---|---|
| 81a | Central Counterparty Clearing House (CCP)Options A, D or J | O | A: [/1!a][/34x] 4!a2!a2!c[3!c] D: [/1!a][/34x] 4*35x J: 5*40x | The CCP clearing the trade. |
| 89a | Clearing BrokerOptions A, D or J | O | A: [/1!a][/34x] 4!a2!a2!c[3!c] D: [/1!a][/34x] 4*35x J: 5*40x | The clearing broker of a cleared trade. |
| 22U | Unique Product Identifier | O | 12x | The product identifier, 12 characters since SR 2024 for ISO 4914 identifiers (6 letters before). |
| 17H | Allocation Indicator | O | 1!a | A (post-allocation), P (pre-allocation) or U (unallocated). |
| 22V | Execution Venue | O | 35x | Where the trade was executed: a BIC, LEI or MIC. |
| 98D | Execution Timestamp | O | 8!n6!n[,3n][/[N]2!n[2!n]] | Execution date and time in UTC. |
| 17Z | Collateral Portfolio Indicator | O | 1!a | Y when collateralised on a portfolio basis; 22Q is then mandatory. |
| 22Q | Collateral Portfolio Code | C | 10x | The collateral portfolio code, required when 17Z is Y. |
| 34C | Commission and FeesRepeatable | O | 4!c/[N]3!a15d | A commission or fee type with currency and amount, or PCT and a rate. |
| 77A | Additional Reporting Information | O | 20*35x | Further information the regulator needs. |
Format notation: n digits, a upper-case letters, c upper-case letters and digits, x any character of the Swift character set, d a decimal number with a comma, ! fixed length, [ ] optional, 4*35x up to 4 lines of 35 characters. M mandatory, O optional, C conditional (a rule decides).
Rules worth knowing
- Field 31C may only be present for an American style option, that is when field 23 contains A (rule C1, error C79).
- The currency in field 23 must be the currency of field 32B (rule C2, error C88).
- If 17F is Y, field 32E and at least one 14S are mandatory and 26K is optional. If 17F is N or absent, 32E and 26K are not allowed and 14S is optional (rule C6, error C87). Field 35C needs 17F Y and the code XXX in 32B or 33B (rule C7).
- Sequence B must contain at least one field besides 15B (C98); mandatory fields of an optional sequence or subsequence must be present when it is used (C32); 17Z Y requires 22Q (C56).
- The common reference in field 22: sender’s and receiver’s BIC codes in alphabetical order (T95, T96) around four digits from the strike in field 36 (T22).
- Changes to the amount, strike, premium, exercise date or settlement details require a new confirmation; a bilateral amendment or cancellation is agreed by both sides exchanging AMEND or CANCEL confirmations.
- Commodity options do not use the MT305: they are confirmed with the MT601.
MT305 example
On 20 October 2026 ZagTrader Test Bank, Dubai (ZAGTAEADXXX) buys from BANKGB2LXXX a European EUR call / USD put on EUR 5,000,000.00 at a strike of 1,095, expiring on 20 January 2027 at 10:00 New York time, with settlement on 22 January 2027. The premium is 1.2% of the EUR amount, EUR 60,000.00, paid on 22 October 2026 to BANKGB2L’s account at BANKDEFFXXX.
{1:F01ZAGTAEADAXXX0000000000}{2:I305BANKGB2LXXXXN}{4:
:15A:
:20:ZTOP2610200021
:21:NEW
:22:NEW/BANK2L1095ZAGTAD
:23:BUY/CALL/E/EUR
:94A:BILA
:82A:ZAGTAEADXXX
:87A:BANKGB2LXXX
:30:261020
:31G:270120/1000/USNY
:31E:270122
:26F:PRINCIPAL
:32B:EUR5000000,
:36:1,095
:33B:USD5475000,
:37K:PCT1,2
:34P:261022EUR60000,
:57A:BANKDEFFXXX
:77H:ISDA/20150612//2002
:14C:1998
:15B:
:22L:FCA
:22M:549300ZAGTTEST000001
:22N:ZTOP261020000021
-}Decode this example in the parserLine by line
| Line | What it says |
|---|---|
| {1:F01ZAGTAEADAXXX0000000000}{2:I305BANKGB2LXXXXN}{4: | Sender ZAGTAEADXXX, input MT305 to BANKGB2LXXX. |
| :15A: | Start of sequence A. |
| :20:ZTOP2610200021 | ZagTrader’s reference for this confirmation. |
| :21:NEW | New contract. |
| :22:NEW/BANK2L1095ZAGTAD | Function NEW and the common reference: BANK2L and ZAGTAD around 1095, from the strike 1,095. |
| :23:BUY/CALL/E/EUR | ZagTrader buys a European call on EUR, the underlying currency. |
| :94A:BILA | Sender and receiver are the principals. |
| :82A:ZAGTAEADXXX | Party A: ZagTrader. |
| :87A:BANKGB2LXXX | Party B: the option seller. |
| :30:261020 | Date the contract was agreed (YYMMDD). |
| :31G:270120/1000/USNY | Expiry on 20 January 2027 at 10:00 New York. |
| :31E:270122 | Settlement date of the FX deal if exercised. |
| :26F:PRINCIPAL | On exercise both currencies are exchanged in full. |
| :32B:EUR5000000, | Underlying currency and amount; same currency as field 23. |
| :36:1,095 | Strike: USD 1.095 per EUR. |
| :33B:USD5475000, | Counter amount: 5,000,000 x 1.095. |
| :37K:PCT1,2 | Premium price: 1.2% of the underlying amount. |
| :34P:261022EUR60000, | ZagTrader bought the option, so it pays (P) EUR 60,000.00 value 22 October 2026. |
| :57A:BANKDEFFXXX | Where BANKGB2L receives the premium. |
| :77H:ISDA/20150612//2002 | ISDA master agreement. |
| :14C:1998 | 1998 FX and Currency Option Definitions. |
| :15B: | Sequence B: reporting information. |
| :22L:FCA | Reportable to the UK FCA. |
| :22M:549300ZAGTTEST000001 | UTI namespace (fictitious LEI). |
| :22N:ZTOP261020000021 | UTI identifier, the same in both sides’ reports. |
| -} | End of block 4. |
BICs, references, LEI and UTI are made up.
BANKGB2L’s confirmation has itself as party A, SELL/CALL/E/EUR in field 23 and 34R for the premium it receives, with the same common reference.
If ZagTrader exercises on 20 January 2027, both sides confirm the resulting EUR/USD deal with an MT300 carrying 22A EXOP and this MT305’s field 20 in field 21.
Common errors and rejects
Earliest exercise date on a European option (C79)
Field 31C is only allowed when field 23 says A (American). Remove it for a European option, or correct the style.
Currency in field 23 differs from 32B (C88)
The last part of field 23 names the underlying currency, and 32B must be in that currency. If the call is on the dollar, 23 ends in USD and 32B is the USD amount.
Cash-settled option fields inconsistent (C87)
With 17F Y, add 32E and at least one 14S. Without 17F Y, remove 32E and 26K. For a cash-settled option also check 26F is NETCASH and 31G gives the valuation date.
Wrong code in field 22 (T47)
The MT305 uses NEW, AMEND, CANCEL and CLOSEOUT, not the four-letter NEWT, AMND or CANC of the MT300 and MT306. Field 21 must also say NEW on a new contract.
Confirmations do not match on premium direction
Each side writes the premium from its own view: the buyer sends 34P (pays), the seller 34R (receives), and field 23 shows BUY on one side and SELL on the other. Two 34P confirmations, or a 34P from the seller, point to a booking error on one side.
Common reference wrong (T22, T95, T96)
The four digits come from the strike in field 36, not from a rate or amount elsewhere; the BIC codes are the sender’s and receiver’s, without country code and in alphabetical order.
ISO 20022
Swift’s MT and MX equivalence tables (May 2024) list no ISO 20022 equivalent for the MT305. Treasury confirmations (category 3) were not part of the CBPR+ migration that ended MT/MX coexistence for cross-border payment instructions on 22 November 2025, and the MT305 remains in use on FIN.
The premium payment and any settlement after exercise are ordinary payments, which on Swift now travel as pacs.009 between financial institutions.
MT305 questions
- What is an MT305?
- The Swift Foreign Currency Option Confirmation. Buyer and seller of a vanilla FX option exchange it to confirm the option’s terms and premium, and later its amendment, cancellation or close-out.
- What is the difference between MT305 and MT306?
- The MT305 confirms vanilla options in an older layout (field 22 with NEW or CLOSEOUT, six-digit dates). The MT306 confirms exotic options such as barriers, binaries and average rate options, and vanilla options with extra clauses, using 22A, 22C and 22K. An option confirmed with an MT306 is closed out with an MT306.
- What does field 23 of an MT305 contain?
- Four parts: BUY or SELL from the sender’s point of view, CALL or PUT, A or E for American or European style, and the underlying currency, for example SELL/PUT/A/USD.
- How is the exercise of an option confirmed?
- With an MT300 confirming the resulting FX deal, with 22A EXOP and field 20 of the MT305 in field 21.
- What is the difference between 34P and 34R?
- Both carry the premium date, currency and amount. 34P means the sender pays the premium (it bought the option); 34R means the sender receives it (it sold the option).
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