Glossary
The vocabulary of settlement instructions, defined the way a payments desk uses it.
Chain and relationship terms
- Respondent
- The bank that holds an account with another institution in order to settle a currency it cannot clear itself.
- Correspondent
- The account-holding institution that settles payments on behalf of a respondent bank.
- Nostro account
- The respondent's own account held at the correspondent, in the correspondent's currency. The same account is a vostro (or loro) from the correspondent's side.
- Ultimate clearer
- The last institution in the chain — the bank with direct access to the currency's clearing system, where the funds actually settle.
- SSI
- Standing settlement instruction: the standing arrangement stating where a bank wants to receive funds in a given currency, for a given asset category.
- Preferred SSI
- Where a bank publishes several instructions for one currency, the one it flags as its preferred route.
Asset category codes
Instructions are published per asset category, so a bank can settle securities through one correspondent and commercial payments through another.
| Code | Meaning | Covers |
|---|---|---|
| ANYY | All asset types | Instruction applies to any transaction type |
| CLNP | Clean payments | Payments without documentary conditions |
| COPA | Commercial payments | Customer and commercial transfers |
| CHEQ | Cheques | Cheque settlement |
| COLL | Collections | Documentary and clean collections |
| DERI | Derivatives | Derivative settlement |
| DOCU | Documentary credits | Letters of credit |
| FOEX | Foreign exchange | FX spot and forward settlement |
| FUTU | Futures | Futures settlement |
| GUAR | Guarantees | Guarantees and standby credits |
| LOAN | Loans & deposits | Loan and deposit settlement |
| MMKT | Money market | Money-market settlement |
| OPTI | Options | Options settlement |
| PREC | Precious metals | Bullion and precious-metal settlement |
| REPO | Repos | Repurchase agreements |
| SECU | Securities | Securities settlement |
| SWAP | Swaps | Swap settlement |
| TREA | Treasury | Treasury transactions |