Format

ICC Uniform Rules for Demand Guarantees, (URDG 758)

In 1919 the International Chamber of Commerce (ICC), was formed by a number of entrepreneurs as an organisation to represent business interests. Today, based in Paris the ICC can be found in over 100 countries representing 45 million members.

The ICC set all the rules and standards for global business. All global businesses including banks abide by these rules.

For those companies wishing to monetise bank guarantees URDG 758, Uniform Rules for Bank Guarantees is an especially important rule as laid down by the International Chamber of Commerce.

URDG insists that demand bank guarantees are issued with precise, specific and exact wording contained within the format. This wording will guarantee any lender 100% protection from default. Furthermore, the wording will discourage any potential litigation.

If the borrower defaults on repayment the lender can claim against the demand bank guarantee. Under the terms and conditions of ICC Uniform Rules for Demand Guarantees, (URDG 758), it is payable on first demand.

For an explanation of what the securities, bank guarantee, standby letter or credit and demand bank guarantees are, please go to our Securities Defined page…

Defining SWIFT

The full name for SWIFT is Society for Worldwide Interbank Financial Telecommunications. It is a dedicated secure financial messaging platform. It utilised by most banks world-wide. Banks can send secure authenticated messages to each other. All messages are validated and verified as part of the security package.

SWIFT enjoys a membership of over 11,000 companies in over 200 countries. Membership is easy to attain if a major bank or blue-chip company. Lesser companies must endure a harsh due diligence process to become a member.

All SWIFT messages have separate classifications. All messages have a classification of two letters MT. Mt stand for message type and in all cases is followed by three numbers. For example, a MT103 is a cash payment and is classified as a “single customer credit transfer”.

When transmitting bank guarantees, standby letters of credit and documentary letters of credit a MT799 and MT760 are used.

MT799 – Is a pre advice from the sending bank to the receiving bank. The message advises to expect a bank guarantee or standby letter of credit in favour of their client.

MT760 – is the actual message that transmits the bank guarantee, standby letter of credit or documentary letter of credit from the sending bank to the receiving bank.

Cusip and ISIN

Cusip and ISIN are globally recognised identification codes and are used in the trading and settlement of shares, stocks, futures, derivatives and other financial securities.

Cusip

Committee on Uniform Securities Identification Procedures, is an alpha numeric code and is utilised mainly in the United States of America, for trading and settlement of securities.

ISIN

International Security Identification Number, is an alpha numeric code, and is utilised for uniform identification throughout the world, but mainly in Europe, when trading and settling shares, derivatives, bonds and other financial securities.