Risk Waiting
Risk management is the biggest reason to improve corporate actions processing, judging by responses to a Thomson Reuters poll conducted in a webcast last week, and also by Inside Reference Data's own webcast poll conducted in April.
Thomson Reuters is promoting migration to the more advanced ISO 20022 messaging standard for corporate actions, with collaboration from Brown Brothers Harriman, the Depository Trust & Clearing Corporation (DTCC), Fidelity ActionsXchange, Information Mosaic and XSP. This standards upgrade is emerging as the key to addressing those risk management concerns.
"20022 is primary to reduce risks and save on costs," says Justin Chapman, global head of process management at Northern Trust. "It's a big investment for us in 20022. It's a key project for us. There's definitely a benefit from 20022."
DTCC is itself also pushing the move to 20022, with its Corporate Actions Reengineering Project targeting a complete migration by 2015. The DTCC project makes it possible for large global custodians to automate formerly manual US domestic corporate actions, according to Malene McMahon, senior business manager, securities initiatives at Swift Americas and a co-executive sponsor of ISITC North America's Corporate Actions Working Group.
And as the US moves more quickly and aggressively to ISO 20022, so too does the Asia-Pacific region, with European markets still mostly holding off, or just trying to make their way to ISO 15022, creating a possible divide. "[Europeans] have made a lot of investment on the 15022 side. They see a lot of benefit, particularly on announcements. So they're happy with that," says Gerard Bermingham, senior vice president of business strategy at Information Mosaic.
Still, financial firms are likely to have challenges in any region when it comes to this key corporate actions processing upgrade. As Northern Trust's Chapman says, "My biggest challenge is taking any form of messaging—15022 or 20022—further up the value chain."
One thing is certain, however. With messaging dominating the conversation about corporate actions processing, improving communication has become key to better risk management that so much industry polling and feedback tells us is the greatest concern. So where there are doubts or resistance to upgrading those messaging standards, the industry's own sentiment ought to be that driving force to push them through.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Ace high or busted flush? Digital Asset’s mixed fortunes mirror DLT adversity
The vendor hoped to remodel post-trade using blockchain technology—and it still might—but its bumpy progress raises questions over the future of DLT in finance.
This Week: BlackRock/Preqin, Trading Technologies, FIA Tech and more
A summary of some of the past week’s financial technology news.
Adaptive’s Aeron goes live on Microsoft Azure Marketplace
The messaging software used for building bespoke trading platforms is now available on Microsoft’s marketplace, making it accessible through major cloud providers.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
Waters Wrap: CME, Google and the pursuit of ultra-low-latency trading
CME Group and Google have announced Aurora, Illinois, as the location for the exchange’s new co-location facility. Anthony explains why this is more than just the next phase of the two companies’ originally announced project.
WatersTechnology latest edition
Check out our latest edition, plus more than 12 years of our best content.
Natixis refines in-house interoperability model
The French asset manager has refined its canonical data model over the last decade, as the interoperability movement continues to evolve.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.