DTCC is preparing for phase 2 of a pilot to enhance automation in the corporate actions process. This phase, scheduled for a test release in Q3 2024, introduces a modernised corporate actions graphic user interface (GUI) portal that targets redemption event types. In a press release, DTCC mentions that the pilot also aims to reduce processing lead time and mitigate risks associated with the current approach.
Phase 1, completed in December 2023, tested new inbound automated messaging for issuers and agents. Using ISO 20022 standard messaging capabilities, DTCC automated the processing of announcements, removing manual steps and accommodating large event volumes.
“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,” says Ann Marie Bria, DTCC’s managing director, general manager, Asset Services.
46 percent manually
The pilot follows a recent DTCC paper which revealed that 46 percent of global corporate action event data is still handled manually. The number was based on research from the Operations & Technology Committee at the Securities Industry and Financial Markets Association (SIFMA) and Ernst & Young. 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. To address this, DTCC collaborated with S&P Global Market Intelligence and others during phase 1 of the pilot.
Bidhu Rusia, director of Corporate Actions at S&P Global Market Intelligence mentions that they will continue the collaboration during phase 2 and welcomes industry stakeholders who may want to join the pilot.