The pilot is expected to run through the end of 2024 and will introduce greater levels of automation in sourcing Corporate Actions announcement data.
New York/London/Hong Kong/Singapore/Sydney, March 6, 2024 ‒ DTCC, the premier post-trade market infrastructure for the global financial services industry, today announced a pilot to further automate the corporate actions (CA) process, delivering new efficiencies and capabilities that address decades-long asset services challenges around the sourcing of corporate actions announcements.
The pilot, which includes two phases, aims to streamline interactions across the Agent and Issuer community by standardizing and automating the sourcing of corporate actions announcements, eliminating manual processes, providing cost savings, reducing processing lead time and mitigating risks.
Phase 1 of the pilot, which was completed in December 2023, tested new inbound automated messaging for Issuers and Agents. As part of this successful test, DTCC provided messaging capabilities modeled on the ISO 20022 standard that enabled an Agent to submit an automated announcement to DTCC. DTCC was then able to automate the processing of that announcement through its system and generate an ISO 20022 corporate actions announcement to its client in a test environment. The messaging solution removes current manual processes and caters to Agents with large event volumes or those looking to send events with large numbers of assets or event notifications.
DTCC plans to launch Phase 2 of the pilot with a scheduled test release in Q3 2024. In this phase, firms will test a modernized Corporate Actions GUI portal. The new portal will provide an easy-to-use interface for Redemption event types, such as Partial/Full Calls and Maturities, which Agents and Issuers can use to transmit accurate and complete announcement event information. The aim is to provide Agents and Issuers with the ability to transmit standardized event information via a modernized interface, increasing accuracy, removing manual validation processes, and eliminating delays to the industry.
“As the global financial industry becomes increasingly more complex, we see tremendous opportunity for increased automation and modernization within the corporate actions space. We are pleased to deliver this pilot, in direct response to client and industry feedback, to bring long-needed automation and standardization to the critical event notification process – increasing efficiency and accuracy,” said Ann Marie Bria, DTCC’s Managing Director, General Manager, Asset Services.
The pilot follows DTCC’s recent paper, “Automating the Sourcing of Corporate Actions Announcements from Agents and Issuers,” which highlighted that almost half (46%) of corporate action global event data is still published and received manually, according to data from SIFMA’s Operations & Technology Committee and Ernst & Young LLP. Because the validation of the information between Issuers, Agents and DTCC is currently manual in nature, it can delay the dissemination of important data to clients and, ultimately, the beneficial owner. In its work to further automate the Corporate Actions process, DTCC worked with S&P Global Market Intelligence and other large firms in the financial services industry.
“After the successful completion of phase 1 with DTCC, we welcome their continued collaboration with the industry to proactively initiate phase 2 of the pilot. Leveraging our proven experience from diverse markets, we are thrilled to contribute to advancing efficiency and innovation in the dynamic US markets by automating issuer and agent interaction for CA announcements,” said Bidhu Rusia, Director of Corporate Actions, S&P Global Market Intelligence.
“Ultimately, our goal is to revamp the end-to-end corporate actions event structure to more efficiently capture source data and provide a more reliable, sustainable, and secure foundation for the future processing landscape,” Bria said. “We look forward to working closely with our key stakeholders to drive improvements to this important area, and we welcome additional firms to join our pilot.”
About DTCC
With 50 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 20 locations around the world, DTCC, through its subsidiaries, automates, centralizes, and standardizes the processing of financial transactions, mitigating risk, increasing transparency, enhancing performance and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm innovates purposefully, simplifying the complexities of clearing, settlement, asset servicing, transaction processing, trade reporting and data services across asset classes and bringing increased security, enhanced resilience and soundness to financial markets. In 2022, DTCC’s subsidiaries processed securities transactions valued at U.S. $2.5 quadrillion and its depository subsidiary provided custody and asset servicing for securities issues from over 150 countries and territories valued at U.S. $72 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes more than 17.5 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, X, YouTube, Facebook, and Instagram.