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Corporate Actions Data Increasing in Complexity and Frequency, Says BNY Mellon’s Cox

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The innovation in the market and the high degree of corporate restructuring going on across industries at the moment has meant corporate actions have become more frequent and much more complex, says Matthew Cox, head of securities data management in EMEA for BNY Mellon Asset Servicing. This, in turn, has meant that banks are being required to invest in their systems to process this data and improve the quality of the data to a more granular level.

“Over the last 18 months the market has witnessed a significant increase in corporate actions events and these events have become much more complex, as firms have become more innovative in reaction to the economic downturn,” explains Cox. “This has meant that banks are being required to manage these changes by comparing data feeds and drilling down to the actual source documents for these events more frequently.”

The terms and conditions of particular corporate actions events are required to determine actions to be taken by these players and therefore the data quality of corporate actions data feeds is increasingly important. There is more customer sensitivity around this data than ever before and this is spurring banks to invest in the space. Just look at UBS’ decision to implement Celoxica’s front office technology to process this data for proof.

The lack of standardisation within the corporate actions arena has made this endeavour even more of a challenge, adds David Berry, executive in charge of market data sourcing and strategy at UBS. “We are not all speaking the same language in the corporate actions data world; even the term AGM is different across geographies for example,” he elaborates.

Standardisation is therefore a key area of concern for the market going forward and it is something banks are keen to see tackled at a higher level. “We can receive up to 31 different identifiers for the same option from one vendor and this is something that needs to be dealt with urgently,” explains Berry. “However, I believe only political power will change this situation.”

Banks are seemingly keen for regulators to step into the fray with regards to enforcing data standardisation, not just in the corporate actions arena, but also across the whole reference data space. The US Securities and Exchange Commission (SEC) could certainly represent a model to follow in the corporate actions space with its mandatory XBRL tagging of corporate actions issuer documents. Moreover, with discussions concerning data repositories and utilities continuing apace among regulators this year, it is likely that changes are imminent, whether the industry wants them or not.

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