MT542 — Deliver Free
The "deliver securities free of payment" instruction. Seller-side counterpart of MT540: the message a settlement engine waits for to match a receive instruction and execute a securities transfer with no cash leg.
Purpose
MT542 instructs the custodian to deliver from a securities account a quantity of units without payment. Use cases: transfer between accounts of the same holder (typically between a trading account and a safekeeping one), initial outflow when changing custodian, return after securities lending, or in-kind contribution.
The custodian matches MT542 with an MT540 sent by the receive-side counterparty. After matching, the settlement engine debits the source account and credits the target — never touching the cash account by design.
Sequence structure
Identical to MT540:
GENL / TRADDET / FIAC / SETDET / SETPRTY. The difference is the direction (the
account in :97A::SAFE// is the debited one) and the
:95P::REAG// tag identifying the receiving agent instead of the
delivering one.
Key tags
| Tag | Name | Usage |
|---|---|---|
:22F::SETR//FREE | Settlement Transaction Type | FREE defines a free-of-payment delivery. |
:36B::SETT// | Settlement Quantity | Quantity to deliver (debited). |
:97A::SAFE// | Safekeeping Account | Source securities account to debit. |
:95P::REAG// | Receiving Agent | BIC of the buyer-side custodian. |
:98A::SETT// | Settlement Date | Settlement date. |
:22F::SETT// | Settlement Type | ICOL, ISSU, TRAD, TRPO, etc. |
Real-world example
Société Générale instructs Clearstream Luxembourg to deliver 100 Amundi Funds Global
Equity units from account 99,999,999, free of payment, to account 12,345,678 at BNP
Paribas (BNPAFRPP), settlement 16 May 2026:
{1:F01SOGEFRPPAXXX0000000000}{2:I542CEDELULLAXXXN}{3:{108:DELF20260515001}}{4:
:16R:GENL
:20C::SEME//DELF20260515001
:23G:NEWM
:98A::PREP//20260515
:16S:GENL
:16R:TRADDET
:94B::TRAD//EXCH/XPAR
:98A::SETT//20260516
:98A::TRAD//20260515
:35B:ISIN FR0010315770
AMUNDI FUNDS GLOBAL EQUITY
:16S:TRADDET
:16R:FIAC
:36B::SETT//UNIT/100,
:97A::SAFE//99999999
:16S:FIAC
:16R:SETDET
:22F::SETR//FREE
:22F::SETT//ICOL
:16R:SETPRTY
:95P::REAG//BNPAFRPPXXX
:97A::SAFE//12345678
:16S:SETPRTY
:16S:SETDET}:22F::SETR//FREE— free-of-payment delivery.:36B::SETT//UNIT/100,— quantity to deliver.:97A::SAFE//99999999— Société Générale securities account to debit at Clearstream.:95P::REAG//BNPAFRPPXXX— BNP Paribas as receiving agent.:97A::SAFE//12345678— BNP Paribas securities account to credit (REAG side).
Common pitfalls
- Quantity mismatch MT540/MT542 — the
:36B::SETT//quantity must be strictly identical on both legs. Any difference (even fractional) blocks matching. - Settlement date mismatch — both instructions must carry the same
:98A::SETT//. A different date blocks the pairing. - Empty source account — if the source account does not hold the quantity to deliver at settlement, the transaction stays in lack of securities, reported via MT548.
- Missing REAG — without the receiving agent identification in SETPRTY, the custodian cannot route the delivery.
- FREE used for a DvP trade — if the transaction involves a cash leg, send an MT543, not MT542. Confusing the two transfers the security with no payment received — potential loss.
ISO 20022 equivalent
- sese.023 — Securities Settlement Transaction Instruction (with
SttlmTxTp= FREE and DELI indicator on seller side). - sese.022 — Status Advice for matching status.
- sese.011 — Allegement Notification on mismatch.