Corporate Actions Initiative Builds Business Case
With the goal of reducing risk in the processing of corporate action announcements, DTCC, SWIFT and XBRL US launched the “Issuer to Investor: Corporate Actions” initiative in May 2009. Since then, the three organizations have been building consensus – within the industry and among issuers – on the need to automate corporate action communications in the U.S. and expand the effort on a global basis.
The group is working on a business case that will mark for the first time an end-to-end analysis from the perspective of all parties in the corporate-actions chain. The intent is to demonstrate that a solution to the communications challenge exists in the form of XBRL (eXtensible Business Reporting Language). XBRL is electronic data-tagging technology, already used by public issuers in the U.S., that has the potential to dramatically streamline corporate actions announcement processing.
Building the case
The business case will allow each stakeholder segment to articulate its processes and then investigate improvements that will benefit the entire chain.
As a foundation for the document, the three organizations are collecting industry data and conducting a stakeholder survey. The initiative’s so-called Stakeholder Group, representing issuers, agents, intermediaries and the investment community, will serve as a primary source for the information. This group, whose formation was announced at the September 2009 Sibos conference, will guide the initiative and shape the conclusions of the business case. At its first face-to-face meeting, scheduled for November 5 in New York, the Stakeholder Group will review the survey results and an early draft of the business case for discussion.
“The key to the success of this initiative will be the active participation of all the stakeholders in the corporate actions chain in making the best case for XBRL data tagging based on existing global standards for corporate actions information,” said David Hands, DTCC director, Product Management. “The inaugural meeting will set the tone for this collaborative effort by giving all stakeholders a direct opportunity to participate in the planning and implementation of this process.” @
[To learn more about the “Issuer to Investor: Corporate Actions” initiative and DTCC’s Global Corporate Actions business, visit the DTCC website. Go to www.dtcc.com/products/gca]