DTCC announced a pilot to further automate the corporate actions (CA) process, aiming 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 was completed in December 2023. It tested new inbound automated messaging for issuers and agents. As part of this 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.
Phase 2 plans
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.
Ann Marie Bria, DTCC’s managing director and general manager for Asset Services, said that the pilot is “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.”
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.
Bidhu Rusia, director of Corporate Actions at S&P Global Market Intelligence, said in a statement: “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.”