DVP
Securities settlement concept, present in SWIFT MT Category 5 messages.
Definition
DVP irrevocably links the securities leg and the cash leg of a trade: neither executes without the other, eliminating principal risk (delivering without being paid). In Category 5 MT messages, the payment indicator :22H::PAYM//APMT and the presence of a settlement amount distinguish a DVP instruction (MT541/MT543) from a free-of-payment instruction (FOP, MT540/MT542).
Origin
Principle formalised by the CPSS Delivery Versus Payment report (Committee on Payment and Settlement Systems, BIS, 1992), which defines its three models; operationalised through the indicators of SWIFT MT Category 5 messages (SWIFT User Handbook).
Example in context
An MT541 instruction carrying :22H::PAYM//APMT (against payment) — the securities are received only if the EUR 62,500 cash is simultaneously debited.