dialogue & articles

Corporate Actions Automation Gaining Interest

Corporate actions solutions have seen an up-tick in interest due to many factors such as the ever increasing volume of complex voluntary events, the need to create data transparency and while reducing risk, the need to increase operational efficiencies, and a push to integrate the business process from the back office to the front office in order to enhance the investment process.

All the while, the industry is moving and changing simultaneously. The switch from ISO 15022 message format to ISO 20022 taking place this November will create both opportunities and challenges. The migration will not only impact those utilizing the current ISO 15022 format, but DTC participants will be required to migrate to the ISO 20022 format to send and receive corporate actions messages to/from the DTC.

ISO 20022 and XBRL

This mandatory migration by DTC will impact several hundred participant firms and necessitate a re-evaluation their current business processes that support corporate actions processes. Further, when custodian banks make the required migration to ISO 20022 thousands of investment firms utilizing their services will be impacted and require greater automation through standard messaging.

The buzz and movement to XBRL supported by SWIFT and the DTC is another longer term solution to assist the industry in determining the root of the issues for quality and timely data across the industry. The XBRL initiative to support an issuer to investor formatted corporate actions announcement would allow for less complex software solutions, more manageable implementations, and greater straight through processing of an announcement to downstream systems.

Service organizations from data providers, outsourcing firms, software vendors, and consulting firms like STP are readying services and solutions to address corporate actions. Solutions have seen great maturity to address these varied needs and investment firms will continue to benefit from the changes taking place within the industry and vendor marketplace.