For asset managers, these messages represent real investor money moving in and out of funds through banks, custodians, and administrators, such as subscriptions, redemptions, and capital calls. If the objective is to send it to the respective counterparty, there might be multiple hops to other banks or intermediaries in the chain, especially with cross-border payments.
When different parts of that chain use different formats or interpret the MX standard differently, a single mismatch can delay a payment, trigger an exception, or create uncertainty about when cash will settle in an investor’s account or be withdrawn.
New mandatory data and the address scramble
One of the biggest practical changes in MX is with party and address information. In the MT world, address attributes were included in a structured way. In MX, they are now made mandatory for compliance reasons. That sounds like a simple field addition, but it has turned into a real data exercise for every firm in the chain.
Under the current rules, certain address attributes were made mandatory. Others remain optional. But regulators have also agreed to a temporary escape hatch. If address data is missing for a certain entity, a value “address line not provided” can be added. This flexibility gives everyone breathing room to keep payments flowing while they clean up their reference data, but it is not a long-term solution.
However, the harder part is sourcing the data consistently. For example, in many cases, brokers and banks must get address data from their banks, from their clients, from their brokers, and it is not possible to extract all the information from every entity on day one.
For asset managers, this transitional period means building processes and systems that can ingest address data from multiple sources, validate it, and feed it into payment instructions and reconciliations without creating new breaks. The firms that get this right will be able to move smoothly as more of today’s “optional” elements become mandatory in the next phase of ISO 20022.
