Corporate Actions
Reduce costs and mitigate risk with improved straight-through processing and standards for corporate events
Benefits:
- A global standard for corporate actions messaging
- Comprehensive coverage for event types
- Reducing costs and risks in a historically manual, error-prone area of the back office
- Improving processing timelines
- Testing for global market practice compliance through STaQS for Corporate Actions
|
When a publicly-traded company issues a corporate action, it is initiating a process that brings material change to the company and affects its stakeholders. Processing of corporate actions is complex, since there are more than 60 corporate event types, and an event may dictate a mandatory action or offer voluntary participation, with multiple options.
The process is not simple either, as there are different counterparties that communicate with each other in different parts of the process, which generates a complex web of communication. The use of proprietary formats and manual work makes the “matching” of information complex and difficult.
The entire event process can take months and processors must deal with position changes, settlement and distribution. Processing corporate actions manually places a heavy drain on expensive resources. Errors during the corporate actions process can result in significant financial losses.
SWIFT’s Corporate Actions solution combines ISO 15022 messaging standards and SWIFT connectivity to enable the standardisation and automation of corporate actions communication flows between information sources, market infrastructures, local agents, global custodians and investment managers. The solution is enabling financial institutions to reduce the costs and risks associated with processing corporate actions, and to build scale for this important function. In virtually all markets, ISO is replacing proprietary standards and is now the lingua franca for corporate actions.
The future of corporate actions messaging lies with ISO 20022 – and the ultimate aim is to replace the ISO 15022 messages with new ISO 20022 messages. To this end, ISO 15022 corporate actions messages have been reverse engineered to create ISO 20022 messages that will contain at a minimum equivalent business functionality. A first draft of the new messages is now available for review. The documentation of the final version will be available end 2009 for live implementation on SWIFT end 2010. For more information, see www.swift.com/standards.
For shareholders’ meetings, the ISO 15022 corporate actions messages provide only rudimentary capability. SWIFT’s new Proxy Voting solution deploys ISO 20022 messages that are designed to accommodate the unique data requirements of proxy voting and are specifically targeted to replace the “meeting” event types in ISO 15022. For more on this new solution see www.swift.com/proxyvoting.
To help the industry improve the quality of corporate actions messaging and ease automation efforts, SWIFT now offers customers the ability to test compliance with industry define market practice using its Simulation Testing and Qualification Service (STaQS) for Corporate Actions.
For more on SWIFT’s Corporate Actions solution:
For more on SWIFT’s work with DTCC and XBRL in the US:
For further details please contact your SWIFT Regional Account Manager or your nearest SWIFT office.
Latest news
References
More information
- April 2008: Download Inside Reference Data’s Corporate Actions Special Report (pdf)
- Mar 2008: Back to the back — Long neglected, corporate actions automation may finally be getting a bite at resources now that more demanding regulatory pressures..., Banking Technology
- Feb 2008: Resolving the Corporate Actions Quagmire, Securities Industry News (requires subscription)
- Securities Market Practice Group announcements, public documents, forums and links: http://smpg.webexone.com/
- ISO 15022 Website
- Jan 2008: Corporate Actions Market Overview: The Back Office Comes to the Fore, Aite Group
- Jan 2008: Corporate Actions Systems Vendor Comparison, Aite Group
- June 2007: Statement on the need for universal, Standardized Messaging in Corporate Actions — The Association of Global Custodians, New York (pdf)
- June 2007: News Release — Need for Universal, Standardized Messaging in Corporate Actions Identified by The Association of Global Custodians (doc)
- April 2007: Harmonisation of Corporate Actions Processing in Europe: Giovannini (pdf)
|
