The goal is to promote straight-through processing (STP) of information from issuers through to investors and substantially reduce the market risks and costs associated with the corporate action announcement process.
Corporate actions processing is fraught with problems. Many of these problems derive from the complexity in the process of delivering information from issuers or offerors on corporate actions to the ultimate investors. The current process does not rely on standard information generated electronically by issuers/offerors. Instead, the investors' intermediaries are responsible for manually generating the electronic records of corporate actions details that investors need. As a consequence, intermediaries create multiple versions of the same information and pass these to subsequent intermediaries along the chain. The process of creating these versions inherently incorporates the possibility of inaccuracies, event misidentification and delays; these errors are worsened as information is keyed and rekeyed as it passes among the intermediaries.
With over 200,000 corporate action events (such as dividends, bond redemptions, rights offerings and mergers) announced by issuers or offerors in 2008 in the U.S., many requiring multiple documents issued over a period of time, there are substantial costs and risks arising from this manual conversion of issuer announcement documents into electronic versions for investors. These costs and risks, for many years, have been incurred by the owners of the securities and by the financial services industry, with a persistent negative impact on investors' returns, investor satisfaction and market efficiency.
To learn more, download the Statement of Direction.
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Corporate Action Processing Gets an Upgrade
Companies now have the opportunity to simplify, streamline and bring new clarity to the laborious and risk-prone processing of corporate actions...
DTCC, SWIFT & XBRL US Unveil Business Case for Corporate Actions Automation
Joint business case makes three recommendations to greatly improve issuer to investor communication