If recent discussions, announcements and reports are anything to go by, corporate actions automation is back in the industry spotlight. Despite the continuing economic troubles in the financial markets, firms are still concerned about the threat posed to their bottom lines as a result of errors in corporate actions processing.
Both Aite Group and Celent have released state of the nation reports on corporate actions this month (see pages 8 and 12 for details) – a sure sign that there’s some mileage to go on the topic. Surprisingly, this month, issuers have also been busy contemplating how to push forward standardisation of formats for the world of corporate actions. Dorien Fransens, secretary general of EuropeanIssuers, told a gathering of the European issuer community at the start of April that a framework for shareholder communication and cross border voting must be introduced to this end (see page 11 for details). Vendors have been ramping up their efforts in the space – DTCC has launched a new web browser service offering real-time access to its corporate action database, Exchange Data International (EDI) and DPC Data have combined their data offerings in the space and Broadridge has launched a new virtual shareholder meeting service, to name but a few. Moreover, after a brief hiatus last year, it seems that even Swift has decided that corporate actions, and for that matter securities industry back office issues, are important enough to be back on the main agenda for Sibos. Apart from a few general discussions around the future of regulation, the Sibos securities forum last year in Vienna was a little lacking on the specifics. The focus seemed to be leaning more heavily towards the payments side of the business in the exhibition hall also, with more stands touting payments related products and much fewer securities focused vendors than the previous year. Not so this year, it would seem, as corporate actions automation, fair value accounting, liquidity management and central counterparties have all been confirmed as topics for dissection during the Sibos securities forum in Hong Kong. Even the general interest sessions have shied away from payments specific topics, with a number of sessions on the issues surrounding risk management and regulation in the current market climate. However, the current market climate may be the very thing that proves to be problematic for Swift in terms of delegates and exhibitors this year. Given that budgets and headcounts have been drastically cut across all of Swift’s customer demographic and the disappointing turnouts that have been in evidence for many recent industry events (even those that don’t require a travel budget and offer free rather than paid entry), Swift may feel the pinch this September. Granted, the Asian contingent is likely to make up a large part of the Sibos delegation, but what impact will the market downturn have on the vendor and banking communities that have to travel that much further? According to Swift, the exhibition hall is already 75% full, but, at this rate, it is likely to stay that way. The fact that the now infamous Sibos party has been cancelled is all part of the cost saving agenda and is liable to be a political move to indicate that Swift understands that times are hard for its users. It has also meant a cut in fees for attendees. However, the vendor community has already expressed disgruntlement at the fact that exhibition stand prices have gone up by around 15% (just for vendors not banks). Many long term Sibos exhibitors from the vendor camp that Reference Data Review has spoken to over recent months are carefully considering whether they should even attend, let alone exhibit. If Hong Kong does turn out to be less than expected in terms of numbers, at least there’s Amsterdam in 2010. Let’s just hope corporate actions and wider securities issues remain firmly on the agenda then too.