What is the difference between MT540 and MT541?

Both receive securities. An MT541 pays cash in exchange (receive versus payment); an MT540 receives free of payment, with no cash moving through the settlement system.

Do I need an MT540 if the other side sends an MT542?

In most CSDs yes: a free delivery must be matched by a free receipt. Without your MT540, the delivery stays unmatched and your custodian may only report it to you as an allegement.

Which fields of an MT540 must match the MT542?

In T2S: the ISIN, trade date, settlement date, quantity, the delivering and receiving agents and the CSD of each. The direction and the free of payment type come from the message types. A common reference (20C::COMM) is compared only when both sides send it.

What confirms that an MT540 settled?

An MT544 receive free confirmation, after MT548 status messages. In ISO 20022 the instruction is a sese.023 with movement type RECE and payment type FREE.

Category 5: Securities markets

MT540 Receive Free (Receive Free of Payment)

Written and maintained by ZagTrader. Last reviewed 21 October 2026. How this page is sourced and checked

The MT540 is the instruction an account owner sends to its custodian to receive securities from another party without paying for them through the settlement system (free of payment). It is used for incoming portfolio transfers, collateral and lending returns and other movements without a cash leg, and it must match the delivering side’s MT542 at the CSD.

Message type: MT540
Category: 5
Structure: 12 sequences, 65 fields listed
ISO 20022: sese.023, sese.024, sese.025

When MT540 is used

An MT540 tells the account servicer to expect securities into an account and to match the counterparty’s delivery, with no cash leg. Typical cases: a portfolio arriving from another custodian, collateral received, a securities loan returned, or a trade whose cash is paid outside the CSD. Without it, an incoming free delivery usually stays unmatched and is reported to you as an allegement.

The four settlement instructions form a two-by-two grid. Direction: receive or deliver. Cash: free of payment (FOP) or against payment (DVP for a delivery, RVP for a receipt). MT540 is receive free, MT541 receive against payment, MT542 deliver free and MT543 deliver against payment. A trade settles with one instruction from each side: the seller’s custodian receives an MT543 and the buyer’s custodian an MT541, and the CSD matches the two settlement instructions they produce. A free transfer pairs an MT542 with an MT540 in the same way.

The sender is the account owner and the receiver its account servicer. The account owner can be a broker-dealer or an asset manager with an account at its custodian, or a global custodian instructing its local sub-custodian on behalf of a client. The account servicer checks the instruction, turns it into a settlement instruction in the local CSD (or the ICSD) and reports back with MT548 status messages and, once the securities move, the MT544 confirmation.

Send the instruction on trade date, as soon as the trade is confirmed or affirmed, and before the account servicer’s cut-off, which sits ahead of the CSD’s own matching and settlement deadlines. Early instructions give both sides time to fix a mismatch before the intended settlement date. In the US the standard cycle has been T+1 since May 2024, and in the EU late settlement costs cash penalties under the CSD Regulation, so an instruction sent on the evening before settlement date is often already too late. A status reason LATE (market deadline missed) or ADEA (servicer deadline missed) in the MT548 tells you the instruction arrived after a cut-off.

Field 23G says what the message does. NEWM is a new instruction. CANC cancels an instruction sent earlier: put the SEME of the original in 20C::PREV in sequence A1, and repeat the details of the original so the servicer can find it. There is no amendment function: to change a matching field, cancel and send a new instruction with a new reference. Attributes that are not matched, such as a hold or the partial settlement flag, can often be changed with an MT530 transaction processing command where the servicer supports it. PREA pre-advises an instruction that will follow; servicers that support hold and release keep it on hold until a NEWM arrives that quotes it in 20C::PREA (status reason PREA while it waits). Check your servicer’s guide, since support for PREA differs.

The settlement chain sits in sequence E1, one party per occurrence, and is the part most often wrong. PSET is the BIC of the CSD or ICSD where the securities move. DEAG is the counterparty’s participant in that CSD; it is the one party (besides PSET) the network insists on. Further out come the counterparty’s intermediaries and custodian (DEI1, DEI2, DECU) and its client (SELL). Your own side (REAG and BUYR) is optional: the servicer knows it from your safekeeping account. Take the counterparty’s chain from its standing settlement instructions, not from memory.

What the CSD compares. In T2S (the ECB’s matching guide) the mandatory matching fields are: payment type (free or against payment) and direction (receive or deliver), both given by the message type; the ISIN (35B); trade date (98a::TRAD); intended settlement date (98a::SETT); quantity (36B::SETT); the delivering and receiving parties (95a::DEAG and REAG); the CSD of each party (PSET or derived from the account); and, for against payment, the currency and settlement amount (19A::SETT), within a tolerance. Additional matching fields, which must match once either side fills them, are the opt-out indicator (22F::STCO//NOMC) and the cum or ex indicator (22F::TTCO with CCPN or XCPN). Optional matching fields, compared only when both sides send them, are the common reference (20C::COMM), the client of each participant and their securities accounts. Other CSDs use similar lists. When the two sides differ, the MT548 reports NMAT with a reason such as DDAT, DQUA, DSEC, DMON, DEPT or ICAG; see why an instruction is unmatched.

After sending, expect a chain of MT548 messages: accepted (PACK) or rejected (REJT), then matched (MACH) or unmatched (NMAT), then pending (PEND) or failing (PENF) with a reason such as CMIS (no matching instruction from the counterparty), and finally the MT544 confirmation on settlement. A cancellation request is answered with CAND (cancelled) or CANP (cancellation pending). The settlement lifecycle guide walks through the whole flow.

For a transfer, use the same 22F::SETR code as the delivering side: OWNE when the owner stays the same and the securities move between two account servicers, OWNI between two accounts at the same servicer, PORT when a portfolio moves from one investment manager to another. Some markets also want 22F::BENE to say whether the beneficial owner changes.

MT540 format: sequences and fields

Sequence AGeneral InformationMandatory

Identifies the instruction and says what to do with it (new, cancel, pre-advice).

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	GENL	Opens the General Information block.
20C	SEME	Sender's Message Reference	M	:4!c//16x	Your own unique reference for this instruction (16 characters at most). The account servicer quotes it in every MT548 status message and in the MT544 confirmation, so it must be unique per instruction. Do not reuse the reference of a cancelled instruction for its replacement.
23G		Function of the Message	M	4!c[/4!c]	NEWM for a new instruction, CANC to cancel one sent earlier, PREA to pre-advise an instruction that will follow. An optional subfunction marks a copy (COPY), a duplicate (DUPL) or a copy of a duplicate (CODU). Many servicers ask for no subfunction on a live instruction.
98a	PREP	Preparation Date/Time	O	A: :4!c//8!n C: :4!c//8!n6!n E: :4!c//8!n6!n[,3n][/[N]2!n[2!n]]	When the message was created, usually as 98C::PREP with date and time.
99B	SETT	Current Settlement Instruction Number	O	:4!c//3!n	Position of this instruction in a set of linked instructions (for example 001 of 003), used with pools and linked settlement.
99B	TOSE	Total of Linked Settlement Instructions	O	:4!c//3!n	How many instructions the set contains. If TOSE is present, 99B::SETT must be present too (network error E90).
16S		End of block	M	GENL	Closes the General Information block.

Sequence A1LinkagesOptional, repeatable

One occurrence per reference. Field 20C is mandatory in every A1; each 20C row below is one qualifier to choose from. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	LINK	Opens the Linkages block.
22F	LINK	Linkage Type Indicator	O	:4!c/[8c]/4!c	How this instruction depends on the linked one: WITH (settle together), BEFO (settle this one first), AFTE (settle this one after) or INFO (link for information only). Not every servicer or CSD supports every code.
13a	LINK	Linked Message	O	A: :4!c//3!c B: :4!c/[8c]/30x	The message type of the linked message in option A, for example `:13A::LINK//542` when two instructions form a back-to-back.
20C	PREV	Previous Message Reference	M	:4!c//16x	The SEME of the instruction you want to cancel. When 23G is CANC, at least one A1 must be present and exactly one of them must carry 20C::PREV (network error E08).
20C	RELA	Related Message Reference	M	:4!c//16x	Reference of a related message, for example a linked instruction or the account servicer’s own reference.
20C	PREA	Preadvice Message Reference	M	:4!c//16x	The SEME of the PREA message that this NEWM follows up. Servicers that hold pre-advised instructions use this link to release them.
20C	COMM	Common Reference	M	:4!c//16x	A reference both counterparties agreed on, such as a trade ID from a confirmation platform. In T2S it is an optional matching field: it may be blank on one side, but if both sides send it, it must be equal.
20C	POOL	Pool Reference	M	:4!c//16x	Groups several instructions that belong together, for example the deliveries that make up one large trade.
20C	TRRF	Deal Reference	M	:4!c//16x	The trade or deal reference from the order or trading system.
36B	PAIR	Quantity of Financial Instrument to be Paired-off	C	:4!c//4!c/15d	Quantity to pair off against the linked instruction. Allowed only when 22F::SETR is PAIR or TURN (network error C50). 36B::TURN works the same way for a turnaround.
16S		End of block	M	LINK	Closes the Linkages block.

Sequence BTrade DetailsMandatory

Dates, price and the security. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	TRADDET	Opens the Trade Details block.
94a	TRAD	Place of TradeRepeatable	O	B: :4!c/[8c]/4!c[/30x] L: :4!c//18!c2!n	Where the trade was done: EXCH with the market identifier code of the exchange, OTCO for over the counter, PRIM or SECM for primary or secondary market.
98a	SETT	Settlement Date/Time	M	A: :4!c//8!n B: :4!c/[8c]/4!c C: :4!c//8!n6!n	Intended settlement date as YYYYMMDD. A mandatory matching field in T2S and in other CSDs. Option B with the code WISS (when and if issued) is for securities that do not exist yet.
98a	TRAD	Trade Date/Time	O	A: :4!c//8!n B: :4!c/[8c]/4!c C: :4!c//8!n6!n E: :4!c//8!n6!n[,3n][/[N]2!n[2!n]]	Trade date. Optional in the standard, but T2S treats it as a mandatory matching field and the European matching standards do too, so send it on every trade. T2S compares the date only, not the time.
90a	DEAL	Deal Price	O	A: :4!c//4!c/[N]15d B: :4!c//4!c/3!a15d	The price agreed: 90A with PRCT (percentage of face value, for bonds) or YIEL, 90B with ACTU and a currency (amount per unit, for shares). Not a matching field in T2S, but some markets compare it.
99A	DAAC	Number of Days Accrued	O	:4!c//[N]3!n	Number of days of accrued interest, for bonds, as three digits (for example 052).
35B		Identification of the Financial Instrument	M	[ISIN1!e12!c] [4*35x]	The security: the word ISIN, a space and the ISIN, optionally followed by up to four lines of description. Use the ISIN whenever one exists. A wrong ISIN shows up as reason DSEC in the status message.
22F	TTCO	Trade Transaction Condition IndicatorRepeatable	O	:4!c/[8c]/4!c	Conditions of the trade, for example CCPN or XCPN (cum or ex coupon) and CDIV or XDIV (cum or ex dividend). T2S uses only CCPN and XCPN for matching, as an additional matching field.
25D	MTCH	Matching Status	O	:4!c/[8c]/4!c	MACH says the trade was already matched outside the CSD, for example by a central counterparty or a matching utility; NMAT says it was not. Mostly used by CSD participants. T2S turns an already matched instruction into two instructions.
70E	SPRO	Settlement Instruction Processing Narrative	O	:4!c//10*35x	Free-text processing instructions. Many account servicers route any instruction with narrative to manual handling, so keep it out of automated flows.
16S		End of block	M	TRADDET	Closes the Trade Details block.

Sequence B1Financial Instrument AttributesOptional

Optional details about the security. The account servicer normally knows them from the ISIN, and some servicers ignore this block. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	FIA	Opens the Financial Instrument Attributes block.
12a	CLAS	Classification Type	O	A: :4!c/[8c]/30x C: :4!c//6!c	Type of instrument, for example the six-letter CFI code in option C.
11A	DENO	Currency of Denomination	O	:4!c//3!a	Currency in which the security is denominated.
98A	MATU	Maturity Date	O	:4!c//8!n	Maturity date of a debt instrument.
92A	INTR	Interest Rate	O	:4!c//[N]15d	Current coupon rate of a bond, as a percentage.
92A	CUFC	Current Factor	O	:4!c//[N]15d	Current pool factor of an amortising instrument such as a mortgage-backed bond. The factor links the face amount (FAMT) to the amortised value (AMOR).
16S		End of block	M	FIA	Closes the Financial Instrument Attributes block.

Sequence CFinancial Instrument/AccountMandatory

Quantity and the account. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	FIAC	Opens the Financial Instrument/Account block.
36B	SETT	Quantity of Financial Instrument to be SettledRepeatable	M	:4!c//4!c/15d	Quantity to settle: UNIT for shares and fund units, FAMT (face amount) for bonds, AMOR (amortised value) for factor-bearing debt. It may appear twice only as one FAMT plus one AMOR (network error C71). A mandatory matching field.
95a	ACOW	Account Owner	O	P: :4!c//4!a2!a2!c[3!c] R: :4!c/8c/34x	The owner of the safekeeping account, when the account number alone does not identify it, for example on an omnibus account.
97a	SAFE	Safekeeping Account	M	A: :4!c//35x B: :4!c/[8c]/4!c/35x	Your securities account at the account servicer, the account the securities are received into. It must be an open account that the servicer holds for you: a wrong or closed account is rejected with reason SAFE.
97a	CASH	Cash Account	O	A: :4!c//35x E: :4!c//34x	A cash account at the servicer, for example for fees. Rarely needed on a free of payment instruction.
94a	SAFE	Place of SafekeepingRepeatable	O	B: :4!c/[8c]/4!c[/30x] C: :4!c//2!a F: :4!c//4!c/4!a2!a2!c[3!c] L: :4!c//18!c2!n	Where the servicer holds the securities, for example `:94F::SAFE//NCSD/CSDXAEADXXX` (a national CSD) or ICSD with the ICSD’s BIC. Needed only when the servicer holds the security in more than one place.
16S		End of block	M	FIAC	Closes the Financial Instrument/Account block.

Sequence C1Quantity BreakdownOptional, repeatable

Breaks the quantity into lots, mainly for tax lot or cost reporting. Use it only where the market or servicer asks for it.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	BREAK	Opens the Quantity Breakdown block.
36B	LOTS	Quantity of Financial Instrument In The Lot	O	:4!c//4!c/15d	Quantity that belongs to this lot.
98a	LOTS	Lot Date/Time	O	A: :4!c//8!n C: :4!c//8!n6!n E: :4!c//8!n6!n[,3n][/[N]2!n[2!n]]	Date the lot was acquired.
90a	LOTS	Book/Lot Price	O	A: :4!c//4!c/[N]15d B: :4!c//4!c/3!a15d	Price at which the lot was acquired.
16S		End of block	M	BREAK	Closes the Quantity Breakdown block.

Sequence DTwo Leg Transaction DetailsOptional

Only for one leg of a two-leg deal: a repo, reverse repo, buy-sell back or securities loan (22F::SETR such as REPU, RVPO, BSBK, SECL). Many servicers ignore it for plain trades. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	REPO	Opens the Two Leg Transaction Details block.
98a	TERM	Closing Date/Time	O	A: :4!c//8!n B: :4!c/[8c]/4!c C: :4!c//8!n6!n	Date of the closing leg, or the code OPEN in option B for an open-ended deal.
20C	SECO	Second Leg Reference	O	:4!c//16x	Reference of the instruction for the other leg.
92a	REPO	Repurchase Rate	O	A: :4!c//[N]15d	Repo rate agreed for the deal.
19A	TRTE	Termination Transaction Amount	O	:4!c//[N]3!a15d	Amount due on the closing leg.
16S		End of block	M	REPO	Closes the Two Leg Transaction Details block.

Sequence ESettlement DetailsMandatory

Indicators for how the instruction settles. 22F::SETR is the only mandatory field. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	SETDET	Opens the Settlement Details block.
22F	SETR	Type of Settlement Transaction Indicator	M	:4!c/[8c]/4!c	What kind of business the movement settles: TRAD for a trade, OWNE or OWNI for account transfers (between two account servicers, or within one), PORT for a portfolio move between managers, REPU or RVPO for repos, SECL or SECB for securities lending and borrowing, COLI or COLO for collateral. Some markets compare it during matching, and a code the servicer does not support is rejected with reason SETR.
22F	STCO	Settlement Transaction Condition IndicatorRepeatable	O	:4!c/[8c]/4!c	Conditions such as NPAR (no partial settlement), PART (partial settlement allowed), NOMC (no automatic market claim, an additional matching field in T2S), DLWM (delivery without matching, only where the CSD offers it) or PHYS (physical delivery). Repeat the field for several conditions.
22F	RTGS	Securities Real-Time Gross Settlement Indicator	O	:4!c/[8c]/4!c	YRTG to settle in the real-time gross process, NRTG to settle in the non-RTGS (batch) process, in markets that offer both.
22F	DBNM	Settlement Standing Instruction Database Indicator	O	:4!c/[8c]/4!c	Tells the servicer to take the settlement chain from a standing instruction database instead of sequence E1: INTE (the servicer’s own database), BRKR (the broker’s) or VEND (a vendor’s). With DBNM, E1 no longer needs PSET and DEAG, but a SELL party is required (network error E70), and with VEND a vendor in sequence F (D71).
22F	STAM	Stamp Duty Indicator	O	:4!c/[8c]/4!c	Stamp duty treatment in markets that charge it, usually with a market code list in the data source scheme part of the field.
22F	BENE	Beneficial Ownership Indicator	O	:4!c/[8c]/4!c	YBEN or NBEN: whether the beneficial owner changes. Some markets ask for it on free of payment transfers, to tell a change of owner from a move between custodians.
16S		End of block	M	SETDET	Closes the Settlement Details block.

Sequence E1Settlement PartiesMandatory, repeatable

One occurrence per party, each holding one 95a party field (the field is mandatory in every occurrence; the qualifier is your choice). Network rules decide which parties must appear across the occurrences. The delivering chain runs from the CSD outwards: PSET, DEAG, DEI1, DEI2, DECU, SELL. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	SETPRTY	Opens the Settlement Parties block.
95a	PSET	Place of Settlement	M	C: :4!c//2!a P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x	The CSD or ICSD where the securities move, identified by its BIC in option P (for example `:95P::PSET//CSDXAEADXXX`). Unless 22F::DBNM is used, one E1 must hold PSET and another must hold DEAG (network error E93). The occurrence with PSET must not carry 97a::SAFE (E52). A place of settlement that differs from the counterparty’s gives reason DEPT.
95a	DEAG	Delivering Agent	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The counterparty’s participant at the place of settlement, the one that delivers the securities: a BIC in option P, or the local participant code in option R with the CSD’s scheme. Mandatory unless 22F::DBNM is used (E93). A mandatory matching field: a wrong agent gives reason ICAG.
95a	REAG	Receiving Agent	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	Your side’s participant at the place of settlement, normally your account servicer or its sub-custodian. Not required by the network, but some markets and servicers ask for it, and the counterparty’s instruction will quote it as their REAG.
95a	DEI1	Deliverer's Intermediary 1	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	A party between the DEAG and the counterparty’s custodian. If DEI2 is present, DEI1 must be present; if DEI1 is present, DECU must be present (network error E86). DEI2 works the same way one level further out.
95a	DECU	Deliverer's Custodian	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The counterparty’s custodian, when the DEAG is a sub-custodian acting for it. If DECU is present, SELL must be present too (E86).
95a	BUYR	Buyer	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The party that ends up with the securities, usually you or your client. Many servicers fill it from the safekeeping account and do not need it.
95a	SELL	Seller	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The party that delivers the securities: the counterparty’s client. T2S compares the client of each participant as an optional matching field; which MT party carries it depends on the chain and the CSD’s mapping. Required when 22F::DBNM is used (E70).
97a	SAFE	Safekeeping Account	C	A: :4!c//35x B: :4!c/[8c]/4!c/35x	Account of the party in the same occurrence, for example the counterparty’s account at the CSD in the DEAG occurrence. Not allowed in the PSET occurrence (E52). In T2S the securities account of each party is an optional matching field.
20C	PROC	Processing Reference	O	:4!c//16x	A reference for the party in this occurrence, for example the counterparty’s own reference.
70a	PACO	Party Narrative	O	:4!c//4*35x	Free text about the party (70C). Usually means manual handling.
16S		End of block	M	SETPRTY	Closes the Settlement Parties block.

Sequence E2Cash PartiesOptional, repeatable

Rarely used in a free of payment instruction, since no cash moves against the securities. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	CSHPRTY	Opens the Cash Parties block.
95a	ACCW	Account With Institution	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	A cash party, for example where charges should be booked. One of ACCW, BENM, DEBT, INTM or PAYE per occurrence.
97a	CHAR	Charges Account	O	A: :4!c//35x E: :4!c//34x	Account for charges linked to the transfer.
16S		End of block	M	CSHPRTY	Closes the Cash Parties block.

Sequence E3AmountOptional, repeatable

Optional in a free of payment instruction. When used, each E3 carries one 19A amount qualifier and the same qualifier cannot appear twice (network error E87). Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	AMT	Opens the Amount block.
19A	BOOK	Book Value	M	:4!c//[N]3!a15d	Book (cost) value of the securities, used on transfers so the receiving side can keep the cost history.
19A	DEAL	Trade Amount	M	:4!c//[N]3!a15d	Value of the underlying deal, for information when no cash settles through the CSD.
92B	EXCH	Exchange Rate	O	:4!c//3!a/3!a/15d	Rate used to convert an amount. If present, 19A::RESU must be in the same E3 (E62).
16S		End of block	M	AMT	Closes the Amount block.

Sequence FOther PartiesOptional, repeatable

Parties that do not take part in the settlement chain but must be named or reported. Common qualifiers only.

Tag	Qualifier	Name	Status	Format	Meaning
16R		Start of block	M	OTHRPRTY	Opens the Other Parties block.
95a	INVE	InvestorRepeatable	M	C: :4!c//2!a P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The investor, or in option C the investor’s country. Some markets require it for certain securities or for foreign ownership limits.
95a	BRKR	Broker	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The broker that executed the trade, when the servicer needs it for reporting.
95a	VEND	Vendor	M	P: :4!c//4!a2!a2!c[3!c] Q: :4!c//4*35x R: :4!c/8c/34x	The provider of the standing instruction database, required when 22F::DBNM//VEND is used (network error D71).
97A	SAFE	Safekeeping Account	C	:4!c//35x	Account of the party in the same occurrence. Not allowed when the party is a stock exchange (EXCH) or trade regulator (TRRE) (E63).
16S		End of block	M	OTHRPRTY	Closes the Other Parties block.

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

Sequences A, B, C and E are mandatory, and E1 must occur at least once. A1, B1, C1, D, E2 and F are optional. E3 (amounts) is optional in a free of payment instruction. There is no E1a: the party chain is built by repeating E1.
Unless 22F::DBNM is present in sequence E, one E1 occurrence must contain 95a::DEAG and another must contain 95a::PSET (network error E93).
With 22F::DBNM present, an E1 occurrence must contain 95a::SELL (E70); with 22F::DBNM//VEND, sequence F must contain 95a::VEND (D71).
Each party qualifier (BUYR, SELL, DEAG, REAG, DECU, RECU, DEI1, DEI2, REI1, REI2, PSET in E1, the cash parties in E2, and the parties of sequence F except INVE) may appear only once in the message (E84).
The chain must be complete going outwards: DEI2 needs DEI1, DEI1 needs DECU, DECU needs SELL; on the receiving side REI2 needs REI1, REI1 needs RECU, RECU needs BUYR (E86).
The E1 occurrence that holds PSET cannot also hold 97a::SAFE (E52).
When 23G is CANC, at least one A1 must be present and 20C::PREV must appear in exactly one of them (E08).
No amount qualifier may appear in more than one E3 (E87). An exchange rate (92B::EXCH) requires 19A::RESU in the same E3 (E62).
36B::SETT may appear at most twice, and then once with FAMT and once with AMOR (C71). A quantity in sequence A1 (36B::PAIR or TURN) is allowed only with 22F::SETR//PAIR or TURN (C50). If 99B::TOSE is present, 99B::SETT must be present (E90).
The rule numbers (C1, C2 and so on) differ between MT540, MT541, MT542 and MT543 and between standards releases, so search for the error code, not the rule number. Newer releases added further rules, for example on the LEI options of 94a and 95a.

MT540 example

The receiving side of the transfer shown on the MT542 page: the asset manager (FUNDGB2LXXX) tells its new custodian, ZagTrader Test Bank Luxembourg (ZAGTLULLXXX), to receive EUR 1,000,000 nominal XS00ZAGT0021 from the old custodian (CUSTGB2LXXX) at the ICSD (ICSDLULLXXX), free of payment.

{1:F01FUNDGB2LAXXX0000000000}{2:I540ZAGTLULLXXXXN}{4:
:16R:GENL
:20C::SEME//FM540261020012
:23G:NEWM
:98C::PREP//20261020160500
:16R:LINK
:20C::COMM//PTX20260117
:16S:LINK
:16S:GENL
:16R:TRADDET
:98A::TRAD//20261020
:98A::SETT//20261022
:35B:ISIN XS00ZAGT0021
ZAGTRADER DEMO FRN 2029
:16S:TRADDET
:16R:FIAC
:36B::SETT//FAMT/1000000,
:97A::SAFE//ZAG-SAFE-0107
:16S:FIAC
:16R:SETDET
:22F::SETR//OWNE
:22F::BENE//NBEN
:16R:SETPRTY
:95P::DEAG//CUSTGB2LXXX
:97A::SAFE//98765
:16S:SETPRTY
:16R:SETPRTY
:95P::REAG//ZAGTLULLXXX
:97A::SAFE//54321
:16S:SETPRTY
:16R:SETPRTY
:95P::PSET//ICSDLULLXXX
:16S:SETPRTY
:16S:SETDET
-}

Decode this example in the parser

Line by line

Line	What it says
{1:F01FUNDGB2LAXXX0000000000}{2:I540ZAGTLULLXXXXN}{4:	Sender FUNDGB2LXXX, receiver ZAGTLULLXXX (the receiving custodian).
:16R:GENL
:20C::SEME//FM540261020012	Sender’s reference.
:23G:NEWM
:98C::PREP//20261020160500
:16R:LINK
:20C::COMM//PTX20260117	Same common reference as in the MT542.
:16S:LINK
:16S:GENL
:16R:TRADDET
:98A::TRAD//20261020	Same trade date as the delivering side.
:98A::SETT//20261022	Same settlement date.
:35B:ISIN XS00ZAGT0021
ZAGTRADER DEMO FRN 2029
:16S:TRADDET
:16R:FIAC
:36B::SETT//FAMT/1000000,	Same face amount.
:97A::SAFE//ZAG-SAFE-0107	The fund’s new account at ZagTrader Test Bank.
:16S:FIAC
:16R:SETDET
:22F::SETR//OWNE	External account transfer.
:22F::BENE//NBEN	No change of beneficial ownership.
:16R:SETPRTY
:95P::DEAG//CUSTGB2LXXX	Delivering agent: the old custodian. Mandatory (E93) and a matching field.
:97A::SAFE//98765	The old custodian’s account at the ICSD.
:16S:SETPRTY
:16R:SETPRTY
:95P::REAG//ZAGTLULLXXX	Receiving agent: the new custodian itself.
:97A::SAFE//54321
:16S:SETPRTY
:16R:SETPRTY
:95P::PSET//ICSDLULLXXX	Place of settlement: the ICSD.
:16S:SETPRTY
:16S:SETDET
-}

When the securities arrive, ZAGTLULLXXX sends the asset manager an MT544 receive free confirmation.

All BICs, accounts and the ISIN are made up. The ISIN carries a valid check digit.

Common errors and rejects

Network reject: no DEAG or no PSET (E93)
Without 22F::DBNM, one E1 must name the delivering agent and another the place of settlement, or the network rejects the message. Each goes in its own E1; 97a::SAFE is not allowed next to PSET (E52).
Unknown safekeeping account (REJT, SAFE)
In a transfer to a new custodian the receiving account is often opened at the last minute. If the account in sequence C is not open yet, the instruction is rejected with reason SAFE. Open the account first, then instruct.
How to fix it
Wrong delivering agent or place of settlement (ICAG, DEPT)
The old custodian’s participant code or account at the CSD is wrong, or it delivers from a different CSD. The instruction stays NMAT with ICAG or DEPT. Ask the delivering custodian for its exact settlement details.
How to fix it
Quantity or date mismatch (DQUA, DDAT)
Transfers of many lines are often typed by hand, and one wrong quantity or settlement date leaves that line unmatched with DQUA or DDAT. Reconcile the transfer list with the old custodian’s holdings statement before instructing.
How to fix it
SETR differs from the delivering side (SETR)
If you send OWNE and the delivering side sends TRAD in a market that compares the transaction type, or the code is not supported, the status reason is SETR. Agree the code with the other custodian.
How to fix it
No delivery arrives (CMIS) or the instruction is late (LATE)
Until the deliverer instructs, your MT540 stays unmatched with CMIS. An instruction sent after the cut-off is reported with LATE or ADEA and settles later.
How to fix it

MT540 in ISO 20022

In ISO 20022 one message, sese.023 (Securities Settlement Transaction Instruction), replaces all four instructions. The direction and the payment type become data elements: an MT540 is a sese.023 with SttlmTpAndAddtlParams/SctiesMvmntTp = RECE and SttlmTpAndAddtlParams/Pmt = FREE. The status message MT548 becomes sese.024, the confirmation MT544 becomes sese.025, and a cancellation is a separate message, sese.020 (Securities Transaction Cancellation Request), instead of 23G CANC.

Securities messages (category 5) were not part of the November 2025 end of MT/MX coexistence for cross-border payments, and MT540 to MT543 remain in use on FIN alongside their ISO 20022 equivalents. T2S and the CSD participants connected directly to it work in ISO 20022 (sese and semt messages); many custodians and CSDs accept both formats and translate between them. See how the securities migration differs from payments.

MT540 questions

What is the difference between MT540 and MT541?: Both receive securities. An MT541 pays cash in exchange (receive versus payment); an MT540 receives free of payment, with no cash moving through the settlement system.
When is an MT540 used?: For incoming securities without a cash leg: a portfolio transferred from another custodian, collateral received, a securities loan returned, holdings moved between accounts, or a trade whose cash is paid separately.
Do I need an MT540 if the other side sends an MT542?: In most CSDs yes: a free delivery must be matched by a free receipt. Without your MT540, the delivery stays unmatched and your custodian may only report it to you as an allegement.
Which fields of an MT540 must match the MT542?: In T2S: the ISIN, trade date, settlement date, quantity, the delivering and receiving agents and the CSD of each. The direction and the free of payment type come from the message types. A common reference (20C::COMM) is compared only when both sides send it.
What confirms that an MT540 settled?: An MT544 receive free confirmation, after MT548 status messages. In ISO 20022 the instruction is a sese.023 with movement type RECE and payment type FREE.

The trading side of the trade: FIX

Before a settlement instruction is sent, the trade is usually executed, allocated and confirmed over FIX, and the instruction must copy what was agreed there. Read those messages on the free ZagTrader FIX Parser:

From FIX execution to settlement: which FIX field becomes which settlement field, and where breaks start
Allocation Instruction (35=J): how a block trade is split across accounts
Confirmation (35=AK): the confirmed economics per allocation
Settlement Instructions (35=T): standing settlement instructions over FIX

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