Corporate Actions: The Way Forward Part II

Guest Contributor: Chris Kotsifas, Founder of STP Consulting Solutions, LLC

After recently chairing FTF’s Corporate Actions Forum on Oct 19^th, we continue to see increasing interest in standards messaging and vendor solutions. It should be most interesting to hear a quantifiable list of benefits gained by DTCC ISO 20022 pilot firms such as BBH, BNY Mellon, and JPM Chase to help provide business drivers and justification for other firms to move forward with their own initiatives sooner than later.

We’re also seeing the ever increasing need to not only provide automation for core processing of corporate actions, but to;

gain greater operational transparency through dashboards and intelligent reporting,
capture and transmit cost basis data attributes,
integrate the back office, front office and clients through mobile technology platforms,
easily integrate a corporate actions platform with all its other touch points,
and finding key talent with deep corporate actions experience to facilitate change of operations and IT.

In my July blog, I spoke about conducting an assessment of your current state and what to consider when reviewing and evaluating solutions. Once a strategic course is set, a pragmatic program plan and road map will need to be determined. We counsel our clients about having a comprehensive program which would include the full scope of the integration effort as often we find that half of the effort is not only implementing a corporate actions solution, but the data services which will need to support this from both external and internal parties.

The external data from data vendors, custodians, brokers, and depositories should be analyzed for quality, coverage, and timeliness if converting to a more straight through process. If you’re putting the investment into building or buying a solution, you need to know that you’re getting the most out of your investment with the data you’re receiving.

Usually the biggest challenge within an organization is to automate the data services needed for positions, security master, accounts, pricing, tax, and more. Not only is the data either fragmented across the organization, but it may be passively maintained in spreadsheets by various operational groups. A corporate actions initiative will often set off other projects to enhance or create new services to deliver and maintain this data.

We’re also starting to see the demand increase for both operations and technology talent who have deep experience in corporate actions and facilitating change. We see this demand increasing over the next couple of years as more re-engineering projects will kick off and believe firms would be wise to start projects sooner than later rather than miss out on key talent.

2012 should be a progressive year for many in our industry who are considering corporate actions project to reduce risk, comply with the DTCC migration to ISO 20022, and increase efficiencies in your process.