Getting Corporate Actions Out Of The Basement

Volume and Complexity Should Surpass Standards Concerns

michael-shashoua-waters

Increases in the variety of corporate actions and the sophistication of corporate actions data may be momentous, but you wouldn't know it from the small amount of attention they're getting

As my colleagues and I prepare agendas for this year's Financial Information Summit conferences beginning in April in Tokyo, we have been considering whether corporate actions has enough interesting or important developments happening to warrant discussion. The question of the importance of corporate actions is particularly of interest for the North American Financial Information Summit to be held in New York in May.

Maybe professionals who work with corporate actions would take us to task for even suggesting there might not be a lot happening in their space, but even some of them have been saying there has not been a lot to warrant attention.

Nevertheless, organizations such as the Depository Trust & Clearing Corporation (DTCC), which have a vested interest in addressing corporate actions as a data management challenge, are certainly going to see a lot of action happening in the field.

But for many others, because corporate actions are considered a back-office responsibility, they end up getting viewed as the proverbial "crazy aunt in the basement," as presidential candidate Ross Perot once famously referred to the national debt—stating that everyone knows she's there but no-one wants to acknowledge her presence.

Part of the problem could be that the industry has gotten hung up on the sub-topic of corporate actions messaging standards, and whether a bigger swath of the industry will adopt the more advanced ISO 20022 standard. What appears to be more material, and more important to actually making corporate actions more compelling as an area to address, is growing sophistication in the number of fields included in a corporate action, and issues that could be created by discrepancies in the same data elements from different sources.

In addition, increased volume and complexity ought to be sparking greater interest, just as that development did with legal entity identifiers, when their registration started driving new volumes of data to manage.

Professionals in the industry began speaking more about the new complexity in corporate actions in the fall, and told listeners of our October 29 webcast how this complexity will make efficiency and optimization of corporate actions processing more challenging. As this year progresses, it remains to be seen whether it's so challenging that it captures more interest in the industry.

Would you agree? Will this be borne out in reality? Please share your thoughts on the importance of these developments in corporate actions on our LinkedIn discussion group, where this column will also be posted with an invitation to comment.

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