Corporate actions issues remain top of mind for the industry
CorpActions Day 2012 – London
The view that standardization of corporate actions processes must be prioritized over automation was a key message put forth during the CorpActions 2012 conference, hosted by Capital Market Events in association with SWIFT, Clearstream, Euroclear and Six Financial. Over 160 attendees representing most of the players in the corporate actions value chain attended the event, which was held on 5 September at London's America Square Conference Centre.
Hervé Valentin, Head of Asset Servicing at SWIFT, welcomed the participants to the conference chaired by John Van Verre, Head of Global Custody at HSBC Securities Services. In his keynote presentation, Van Verre acknowledged the progress made in recent years in times where banks largely focused their budgets on regulatory projects, and also highlighted the main challenges ahead.
The importance of SWIFT's work to promote standardization and increase automation was mentioned in panel discussions throughout the day. Participants also expressed strong interest in SWIFT initiatives including the CA standardization report and market compliance assessment tools.
In a panel on STP in corporate actions, Paul Wiltshire, Director at CityIQ, unveiled the first results of a global survey of the Corporate Actions market place completed in collaboration with SWIFT. Commenting on the survey results, Hervé Valentin, said that SWIFT traffic pattern analysis confirm the importance of service level improvements in financial institutions' decision to automate their CA communications.
Werner Frey, Managing Director, Post Trade at the Association for Financial Markets in Europe (AFME) and Chair of the European Market Implementation Group (E-MIG), told attendees that the most effective route to greater straight-through processing of corporate actions from the issuer to the investor was a continued focus on harmonizing processes and workflows. "Standardization must come before automation," he said.
Implementation of 130 standards covering three broad categories of corporate actions-distributions, reorganizations and transaction management-have achieved levels of about 85% to 90% in some European markets, Frey told attendees.
Speaking on the same panel, Annette Brandt, Head of Asset Servicing, Product Management at International CSD Euroclear, agreed with Frey that "pragmatic solutions" were often required to extract the information required for executing a corporate action from issuers and their agents. "It's about the key data rather than the text-based information we get from them today," she said, adding that a template for issuers and agents - "the first step toward automation" - was being introduced by Euroclear in the French, Belgian and Dutch markets. "But we should not dream of 100% automation of corporate actions, she said, stressing the continued importance of exception management.
Commenting on the event, John Van Verre, Head of Global Custody at HSBC and Chairman of the CorpActions 2012 conference, said, "The industry has made significant progress with standardisation in areas like settlements and messaging. Progress has been made in Corporate Actions as well, but there is still much more work to be done. Events like 'Corporate Actions 2012' bring together the various parties in the value chain and create an excellent platform to discuss and agree next steps to progress with the further harmonisation in the area."
Van Verre added, "At HSBC, we are making significant investments in the development of a global corporate actions platform which will provide clients with online access. This will give clients real-time information and instruction capabilities for all their corporate actions."
Conference panels
The event featured several other panels covering today's most relevant topics in the corporate actions industry, from proxy voting and corporate governance to the impact of T2S and the new FATCA regulations.
SWIFT's Teresa Nolan, Head of Investment Managers, UK, Ireland & Nordics, said, "This conference is an important landmark for the Asset Servicing industry. Both the high attendance and active panel participation from the Asset Management and Broker Dealer community confirmed we are moving into the next wave of industry automation and standardisation of the end to end corporate actions lifecyle. Issuer harmonisation being referenced as the ‘game changer' for all industry participants".