About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

ISITC’s CAWG Finally Releases Long Awaited Corporate Actions US Market Practice Guide

Subscribe to our newsletter

Following two years of revisions since the first draft was first released in October 2007, ISITC’s Corporate Actions Working Group (CAWG) has finally released its best practice guidelines for the corporate actions market in the US. As the Securities Market Practice Group’s (SMPG) designated US market representative, the ISITC group has been charged with compiling, reviewing and amending these best practices, which cover the complete lifecycle of a corporate action, from the notification of an event to final confirmation of a payment.

Genevy Dimitrion, chair of ISITC, explains: “Since our inception, we have been working toward improving trade processing across the industry. As part of these efforts, our CAWG has continued to push forward on putting forth industry best practices in order to benefit the global market as a whole. As the financial services industry continues to undergo change, ISITC is committed to effecting positive change in the industry through the cooperative efforts of our member firms.”

The group completed its final review of the guide during the association’s member conference in September, although it notes that the document will be reviewed and updated on an ongoing basis to reflect future industry changes. Currently, the market practice guide covers the corporate action announcement, instruction, status, processing advice and payment confirmation flows. It defines the roles of all players in the corporate actions lifecycle and provides details on the data flows between these parties.

Moreover, the document provides templates for communications between parties for different steps in the corporate actions chain, including codes and their meanings. This level of detail should go some way to harmonising market practices across the US and eliminate some of the costly data reconciliation work required due to firms using different formats, or so the logic goes.

Given that ISITC has some clout in the market (unlike its European counterpart) and has been endorsed by the SMPG to carry out this work, these best practice guidelines should hopefully be taken on board by some of the larger firms in the space. However, it has taken two years to produce this document and corporate actions is a particularly complex and, surprisingly, changeable part of the financial services market, so these best practices may need updating sooner rather than later.

Moreover, the work required to harmonise practices for one country doesn’t bode well for the future of global corporate actions standardisation. If it takes this long to come to an agreement on one country’s best practices, how much longer would it potentially take if you throw international disparity and political disagreements into the mix?

If you take the opinion of Werner Frey, chairman of the European Securities Services Forum (ESSF), as gospel, these future market practices should be developed irrespective of the current models being used by each individual country. But as we all know, theories such as these are wonderful but putting them into practice is another kettle of fish entirely.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Approaches to ESG data for analytics

Volumes of ESG data are huge and continue to grow, questioning how financial institutions with a focus on ESG investing can continuously capture and contain required data sets, master and integrate the data, and ensure data quality for meaningful analytics. This webinar will consider approaches to ESG data and data management for analytics, the challenges...

BLOG

How to Get Ahead on the Data Governance Journey

Data governance that delivers benefits to the business needs to pull together people, process and technology by embracing data ownership, managing metadata, ensuring data quality, and continually improving automation. These are just some of the guidelines for successful data governance set out by a panel of experts at A-Team Group’s recent Data Management Summit in...

EVENT

TradingTech Summit London

Now in its 12th year the TradingTech Summit London brings together the European trading technology capital markets industry, to explore how trading firms are innovating in today’s cloud and digital based environment to create flexible, scalable trading platforms to support speed to market and business agility.

GUIDE

Regulatory Data Handbook 2022/2023 – Tenth Edition

Welcome to the tenth edition of A-Team Group’s Regulatory Data Handbook, a publication that has tracked new regulations, amendments, implementation and data management requirements as regulatory change has impacted global capital markets participants over the past 10 years. This edition of the handbook includes new regulations and highlights some of the major regulatory interventions challenging...