The recommendations contained in the business case to improve corporate actions communications are intended to transform this aspect of the corporate action processing chain.
James Anderson, manager of Financial Reporting at AGL Resources, said, “Implementing these recommendations would result in corporate action information that is computer-readable, eliminating the need for intermediaries to interpret and transform our messages into structured data. This allows us to remain in control of these important disclosures and ensure they are communicated exactly as we intended. This enables greater transparency, accuracy and timeliness of our data that is extracted from regulatory filings and press releases that we issue, giving our shareholders more time to make decisions. We believe our investors and those who receive our corporate action information will embrace this initiative.”
Quantifying the impact
Survey results and discussions with members of the stakeholder group highlighted expected benefits of implementation including:
- Direct savings to investors and their investment managers of $172 million annually.
- An estimated total cost savings of $400 million per year for the industry.
- A 60% improvement in fully automated dissemination of data on mandatory corporate action events to investors, which represent an estimated 80% of all U.S. corporate actions.
Elisa Nuottajarvi, manager, Securities Industry and Financial Markets Association – Asset Management Group, said: “The Issuer-to-Investor: Corporate Actions business case is a major effort which makes it very clear that there is a need to automate the corporate actions process by using new technologies and standards, such as XBRL and ISO. Industry-wide collaboration on this effort is a key step in the process of resolving this age-old and very costly problem.”