Swift MT 760 and MT 799, the Real Story
If you have been in the private placement business for a while, you probably know that there are plenty of acronyms associated with trade programs. As someone new to the business, you may hear phrases like: “MTN”, “BG”, “SBLC”, “PPP”, “DTC”, “CIS”, “POF”, and say, “what the heck are they talking about”? Well, though it is good to know private placement lingo, cool sounding terms do NOT close deals. If you want to protect yourself and succeed in private placement, you MUST understand the 2 most important acronyms of all, the “MT 760” and “MT 799”.
Whether you are a client, broker, consultant, or even just a beginner, the MT 760 and MT 799 are two terms that are critical to learn inside and out!. Many times, if you speak to brokers who claim to have trade programs, you can tell if their investment is real by asking just one question, “Explain the MT 760 and MT 799, what are the risks and fees?” If you get an answer that sounds similar to the explanation we give below, then you may want to dig a little deeper! If you don’t, recognize that these people are less educated than they claim, and may not be the best option. First things first, let’s explain the definition and application of these terms in the modern day private placement business.
The MT 799 is a swift message used between banks to communicate in written form, and is usually referred to as “pre-advice”. For example, Bank “A” may send a MT 799 to Bank “B” stating: “We confirm “XXX” amount on deposit and are ready to block this amount via MT 760 in favor of account “XXX” at your bank. Please confirm readiness and receipt.” Typically, the MT 799 will be needed directly before the MT 760 is issued, and there may be small fees. Despite what most brokers may claim, the MT 799 is NOT used as collateral,and can NOT be used to enter a private placement program. Now that we know about the MT 799, let’s take a look at it’s cousin, the Swift MT 760.
The MT 760 is a swift message used to block funds in favor of someone other than the owner, collateralizing the asset via this message, while allowing for loans and liens against it. For example, most private placements require the investor to send a MT 760 to the trader’s account, allowing the trader to use this swift as a collateral guarantee for their bank. Again, despite what many brokers may claim, this is NOT everything you need to know about the MT 760. Now that you do know the definitions and applications, let’s cover the key points no one ever brings up about the MT 760: the FEES, and the RISKS…
First and foremost, the fees for blocking a large amount of funds via MT 760 can be more than you would expect. In most cases, your bank will charge 1-2% of the value being blocked for this service. For example, on a 100M bank instrument this can be 1-2M that the owner must come out of their pocket with, unless they have a special relationship with their bank. You may say to yourself, “Wow, that is a lot to spend on fees for something I’m not sure will work”! Well, even more importantly, let’s take a look at the risks if you did move forward.
If you complete the MT 760 and pay the fees, you should observe everything very closely from that point on. Once the MT 760 has hit the account of the trader, the line of credit should become available within 72 hours. At that time, the trader should be able to make their first bank instrument purchase, and give you a DEFINITE TIMELINE for your first profit disbursement. You may say, “Why do I need to watch this process so closely?” Well, here is the part that most brokers don’t tell their clients…
When blocked in someone’s favor, the MT 760 collateralizes assets in the form of a swift guarantee, and by doing so, allows the beneficiary to draw credit against it. This means, if the loan to the “trader” was defaulted on, the bank would seize the collateral and you would be out of your money! Though this scenario is possible, I would consider it rare for two reasons… In today’s world, no bank will loan Millions of dollars to someone they haven’t vetted, no matter what collateral is on hand. Second, the MT 760 is quite rare, and this usually draws attention to the beneficiary of the swift.
In summary, the MT 760 can be safe, or it can blow up in your face. As always, the key is having a real trader and most importantly, getting your payments as scheduled. If the trader makes a statement about yields and a time line, they must ALWAYS keep in line with their promises. Over the THOUSANDS of transactions we have been involved in, the only ones that have closed have been smooth from the start, with NO hiccups.
Remember, both RISK and FEES are a part of blocking funds via MT 760!!!! In addition, by understanding the MT 760 and MT 799, you can clear out the TIME WASTING brokers from your network, and work MORE EFFICIENTLY towards your goals.
Let’s face it, very few people know as much as you do after reading this article. Use it to your advantage to qualify the private placement investments you come across, and it will make life a lot easier. Ask yourself, if someone can’t explain the MT 760 and MT 799 in thorough detail, do you think they have ever closed a deal? Then ask yourself, do I want to risk Millions with someone that has NEVER been successful? It’s not hard to see, education is the key!
InsideTrade LLC Staff
(412) 235-2855
[...] This post was Twitted by WeInvestOnline [...]
Can I use blocked funds that I leased, and then enter private placement with them? I am guessing if they are already blocked, I cant block them again? Can someone clear this up.
MT760 is as good as a bank guarantee or cash in your account.
If the issuing bank is of top class rating there shouldnt be any problem for your recipient bank to allow you to monitize it at up to 90% of the value.
Hence, MT760 requirement is for "trader/platform" that DO NOT have a credit line of their own.
Mostly required by swindlers, fraudsters and wannabee trader looking for a free ride.
Anyone who receives a MT760 can be the trader themselve.. using the monitized yield to conduct a buy/sell trade in their name and NOT the investors'. All profits will be pocketed by them, or majority of it, leaving peanuts for the investor.
The chances for default is high. The chances of investor getting any profit is extremely small.
99.99% of MT760s have been plundered leaving the investor without recourse.
MT760 is still used by legitimate traders when, for instance, client's bank is not of good rating and client is not willing to move the funds to his own account in trading bank for internal blocking. On the other hand, if trader is successful and stands behind his words, he will pay for the SWIFT. This is at least what our trader is doing, if needed, though currently he's using mostly MT799 confirming an Administrative Hold which is reserving funds in favor of CLIENT who, in his turn, commits it to trader contractually . Such arrangement, though easier and more comfortable for client, is definitely a higher risk for trader who needs to put up 2 times of his own money to start trading. That's why our trader's attorneys have to do a thorough due diligence on clients and their funds/assets even before the compliance.
[...] needed. In many cases, this is a letter from the investor’s bank confirming they will send a MT 760 upon the request of the client. Without this letter, most real platforms won’t even entertain [...]
MT 760 means something different for every person you talk to because most dont even know what they are talking about, thanks for the great detail in the blog post
Hello,
This post has been very educational.
Few questions if anyone can reply :
I understand that MT760 costs about 0.05-1.5%.
1)What are the costs for sending Mt799??
2)MT799 is generally construed as verification of Proof of funds.
Can MT799 be used for sending verification of Bank instruments? or is it only pertaining to cash funds?
Thanks,
Cost for 799 can be anywhere between 20k & 60K depending on Bank as some charge more or less & some Banks dont charge anything depending on your relationship with your Bank and ofcourse the message being relayed….in retospect its like you & I communicating on skype to one another and relaying documents (Bank Instrument), to have authenticated which you (the Issuing Bank), gave to a 3rd party (Broker or Agent or Owner), to give to me (the receiving Bank), and then me going straight to you to ask if what I had received (from owner broker agent), is real & that it did in fact come (issued), from you originally. Example only.
MT799 is what it is…a SWIFT Code utilized under interbank process by which messages are sent Bank Officer to Bank Officer for what ever reason as it relates to their clients purpose for having a 799 sent.
Monar, you said your traders, are you and have you seen/involved in a REAL trade group or trader that produced REAL returns? If so how can we chat? I have many many clients that have been burned and just want a few simple answers to some detailed questions.
Thanks.
Good Day, when you have a serise client with real cash or assets, and they can follow our strature you can send a note to UEGEcomplince@gmail.com, and your contact information some one from the office will be in touch with you.
how long does it take an MT799 to arrive?
if I'm the lessor, can I ask the issuing bank to give me a proof of the issued the MT799 in favor of the beneficiary?
I would really appreciate any help-
what are some of the pitfalls for countries central bank issuing MT760 and in return get funds for humamtarian projects. Is this type of investment scams
Dear Sirs,
Very interesting and informative. I have a question regarding your mention of fees. As you say the MT760 can be expensive can the fees be paid out using part of the monetised credit? EG an MT760 for 30M requiring a 10% payment leaving 27M to effect the operation?
I'm new on this field. And I would like to ask, why bank "A" will issue a MT760 to bank "B" on my client favor, if bank "A" has plenty money to lend it to his client at a higher rate? The client has an offer from bank "B" with a much lower interest rate, than bank "A" would lend it to him. Why bank "A" would issue a line of credit to client, and them issue a MT760 to bank "B" for bank "B" used it as passive collateral to make the loan to client? Just for one time fee ( 0.5- 2%)? Bank "A" main business is to lend money, not to charge one time fees? Thank you in advance for your help.
hi , iam an advocate and i have a client that want t cash an MT760 HE IS GIVIVING ME all the details of thedraft which i will pass it to you FUNDS ORIGIIN : …….. QUEUE….. NATURE……. TYPE……. ISIN….. CUSIP…. BLOCKING CODE……. ACCES CODE….. OPERATION COMMON CODE BENEFICIARY SCREEN CODE DTC A/C MESSAGE MENTION TRANMITTER CORRESPONDENT and under all this details there is a message text for the mt 760 he is saying that the money are in euroclear and he has in his posetion a bankers draft issued by HSBC 1 HE WANT US AS ALAW FIRM TO CASH IT WHAT WE NEED TO KNOW , IN ORDER TO KNOW THE AUTHENTISITY OF THE BANKERS DRAFT? 2 HE HAS IN HIS POSETION THE ORIGINAL BANKERS DRAFT ? 3PLS ADVISE US WHAT WE NEED TO KNOW CONCERNING ALL THIS CASE ? OPERATION COMMON CODE
Your right. It makes no commercial sense when you think about it. Also why would a bank that has no contact whatsoever with B be prepared to offer a credit line for 50 or 100 million dollars. The answer is simple. They wouldn't. All of this is one form of scam or another. Regarding the MT799 free text swift. This is used either as Proof of Funds, to find out how much money you have to steal or simply to get further banking information and sometimes just for psychological legitimacy advantage. MT760 BG's are not traded this is just rubbish peddled by con merchants. You have been warned
APPENDIX “A”
BANK LETTERHEAD
(From Applicant’s Bank)
TO: (Client name)
DATE: 10-05-2010
REFERENCE: FEE REQUIREMENTS
Dear Sir
On instruction from our client we hereby affirm that we will remit the said fees upon good authenticated receipt, of an irrevocable and unconditional Bankers Guarantee for the value of $10,000,000 (One Hundred Million US Dollars) issued by________Bank. This should be transmitted via SWIFT ——— with full banking responsibility. The bank issued security shall be subject to verification, authentication and confirmation of payment upon maturity to our entire satisfaction.
Furthermore, we confirm that these funds will be clean, clear and will not be encumbered.
This letter may be confirmed on a bank to bank basis.
Sincerely
Bank Officer Bank Officer
If you require Leased Financial Instrument and is RWA to work on below
outlined procedure only, contact me for quick closure as we deliver in time
and precision. You are at liberty to engage our leased facilities into trade
programs as well as in other project(s) such as Aviation, Agriculture,
Petroleum, Telecommunication, construction of Dams, Bridges and any other
turnkey project(s) etc. Our terms and Conditions are reasonable as outlined
below,
DESCRIPTION OF INSTRUMENTS:
1. Instrument: Bank Guarantee (BG)/SBLC (Appendix A)
2. Total Face Value:100MUSD,Euros or pounds MIN, 5B USD,Euros or pounds MAX
(One Billion USD).
3. Issuing Bank: HSBC London or AA rated Bank in Western Europe or USA.
4. Age: One Year, One Day
5. Leasing Price: 6% of Face Value plus 1% commission fees to lessee’s
broker.
6. Delivery SWIFT TO SWIFT.
7. Payment: Wire Transfer.
8. Hard Copy: Bonded Courier within 7 banking days.
Please do feel free to contact me if you are interested so that i can send
you the procedure and we can go from there.
Contact: vital.sobko@gmail.com or call 61 75 6411024.
Best Regards,
Vitali Sobko.
I am glad to be able to read from this blog, it has certainly been educative.
I have just a couple of questions:
Who pays the cost on MT760, the Investor to his issuing bank or The trader to his receiving bank.
I an receiving a fund from a buyer who is buying from our company gold dust and it mounting to $4.6m USD. He then want to issue us a bank guarantee verbiage.
What type of MT- guarantee is more appropriate for me the beneficiary to have access of 30% to the fund to proof business commerce to the buyer?
Kindly address reply to my mail: kwakuanor@yahoo.com
What bank is using a MT 799 to place a block or Administrative Hold on funds?
Hello Sir !!
I have many clients who would be ready to invest upto US$ 5million. But I have some queries, If possible please let me know some good company with good track records of PPP with good returns who can answer the following:
1. I would have to make sure that their money is safe and most importantly, what would be my earnings in
addition to their earnings.
2. One of my clients’ is ready to give me money right now but please tell me what surity you can give of
the maximum rate of return, and also what would be the maximum guaranteed rate of the return in terms of
percentage.
3. I need exact formats of whatever documents you want, to be signed and submitted with your company
and one your executives have to collect all the required documents duly signed from Punjab, India only.
4. I dont need to know about where and how your system will work but definitely I would be interested
and rather I am sure that those should not be used against any government policies and laws, of any country
in the world and your company have to give me this undertaking in writing.
5. Tell me the returns after deducting all the conversion charges and all the deductions or charges(if any) you will
charge.
6. And also most importantly, tell me by what boundations/duties and risks, I or the investor would be bound implicitly
or explicitly by entering into contract with your company.
7. A written undertaking duly signed, that in case of any kind of dispute, laws of land,(i.e.Punjab, India)
would be applicable.
Please let me know all these as soon as possible with maximum returns and my commission.
I presume all dialogues in this blog referring to financial jobs but believe many scams have used the relevant terms and procedures in physically trading commodities. Just wish someone to comment on the use of the terms and procedures such as: RWA, ICPO, FCO, Soft Probe, POF, POP (are banks in position to "prove the existence of products? I never heard of such functions!), etc. I wish somebody can point out these are scams terms and procedures and never work.
I am in a position to purchase Au gold products from a listed miner we have had contact with for some time We have recently been approached by a supplier of larger amounts that are happy to deal with us and they have asked for MT 799 we are in a position to give him confirmation through our bank in the value of $50 million by way of MT 799 can he use this information regarding our bank details to scam our account once we have issued MT 799 or is it an accepted form of proof of funds please advise
Thomas I have read your blog
We would be interested in talking with regard you question please contact
Jon Collins Stones Bullion Collinsa4@aol.com
Hello
We are a bullion company in the UK we have recently been approached by African mining Unions to supply us with unrefined gold products in large and small amounts they have all asked for MT 799 wwe trade with existing companies in Africa at $100 million level on a weekly basis
This is a banking format we used several years ago they are asking for this prior to contract for us to supply our bank details and Mt 799 we are wondering with the resurgence of the MT 799 is there a scam with the MT799 that we mat not be aware of ie If they can somehow draw of the information we give them in the pre contract stages it is strange we have had over 30 requests this week Regards Jon Collins
How long are blocked money in the bank exposed to MT799
Amit and with all respect for insidetradellc operator, contact us ceo.sogeraf at gmail dot com
Hello Amit,
My company gets investors, similar to the people that want to give you investment capital, and we invest in large Studio Feature films by paying for the marketing and advertising. The films are already made for between $10 and $40 million US Dollars. Then we put up between $5 to $10 million which comes back in first position before the studios receive any recoupment. Your investor receives a fee of between 14% – 20% per annum and you receive a 3% cash commission on the funds invested and another 3% of the return. Please let me know if you have any interest in knowing more.
James
dear sirs
i was a[pproached by an agent he informed me send an skr from your bank for your property value
and they will transfer immediately amount equivalent to the value of property in funds to your bank and u can use the money free for 5years,can u tellme what is this gimmick is it safe
regds suniel
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