GCA Validation Service Speeds Up Data Delivery to Customers
The Global Corporate Action Validation Service (GCA VS) now gives customers intra-day feeds from DTCC’s depository, a capability that satisfies the market’s growing demand for more timely access to corporate action announcements. GCA VS is offered by DTCC Solution LLC, a DTCC subsidiary.
“This enhancement marks the first time the depository is offering intra-day file feeds on corporate action events,” said Brett Lancaster, vice president, DTCC Solutions LLC, and head of the Global Corporate Actions area. In the past, GCA VS customers received end-of-day file feeds, the same format used for depository customers.
In addition, as customers request faster delivery and more accurate corporate actions data, GCA VS is responding by gathering its own information – and for many companies, that comes from press releases, prospectuses and letters of transmittal.
“When we launched GCA VS back in 2003, we focused mostly on validating other data providers’ information,” said Lancaster. “Now, the service gathers information via press releases, which announce corporate actions in multiple languages directly from some 18 newswires, and we’re looking to automate this process by working with newswire providers to accept machine-readable feeds.”
Speedier delivery
DTCC is one of the few organizations in the world that offers broad, global coverage of corporate actions. GCA VS provides information on corporate actions announcements globally to customers, tracking more than 2 million securities in 160 countries and 16 lanaguages. In 2007, the service provided more than 1 million corporate action announcements and more than 3 million announcements of scheduled payments on fixed income instruments.
U.S. corporate actions generally make up about 60% to 65% of the world’s total corporate action announcements, and almost all of these flow through DTCC’s Depository Trust Company (DTC), as the central securities depository for the U.S. While customers can get updated information from DTC by using a terminal to directly query the depository’s mainframe, a full file of the announcement information had only been available at the end of the day, and that usually was loaded into customer systems the next day.
With GCA VS now getting six intra-day feeds from DTC, the information is sent to its customers during the day, updating data in their files immediately upon receipt. Dividend events (including principal and interest payments, cash dividends, dividend reinvestments, capital gains, special cash distributions, spin-offs, stock splits and stock dividends) are received six times a day from DTC; redemption events (partial and full calls) are received six times a day; and reorganization events (including tenders, mergers, conversions and puts) are received three times a day.
“With customers receiving updated information directly from GCA VS, they no longer face the time and trouble of trolling to find the data by using mainframe inquiries,” said Lancaster. “Instead, they can obtain information on corporate actions on the day that information is announced and added to our systems. And of course, that applies to most updates and changes as well.”
Raising the bar
GCA VS uses service level agreements (SLAs) with its customers to guarantee corporate actions data within certain coverage, accuracy and timeliness deadlines, according to Lancaster. If the targets are not met, the service gives back some of the money it charges.
Earlier this year, GCA VS began to recast its SLAs to make them more aggressive. Orginally, for non-voluntary events, SLAs were based on getting the event into a clean and approved state by “important date minus 7 days,” regardless of how early the event was announced in the market. The new SLAs require GCA VS to validate the event with all data available in the market by “added date plus 1 day.”
“The initiative was completed by the end of September,” said Lancaster, “and now every event type is subject to the new SLA except for cash dividends and U.S. calls, which will remain at ‘important date minus 7 days.’ We set an industry standard by introducing customer SLAs when we first began offering this service. Now, we have raised the bar to guarantee our customers get the data faster than ever before.” @