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Shareholder Disclosure Requires Investment to Tackle Increasing Complexity

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Shareholder disclosure remains a problem for financial firms, with many needing to invest in software and workflow tools to improve their processes. The increasingly complex issues of disclosure were discussed during an A-Team Group webinar that considered whether firms are on top of this regulatory challenge.

A poll of the webinar audience set the scene for discussion, with 29% of respondents saying shareholder disclosure is a major challenge and 52% saying it is somewhat of a challenge. The key reference data problems in analysing and reporting shareholder disclosures were noted in a second poll as aggregating numbers of shares and votes at the issuer level, managing reference data for derivatives and depository receipts, and industry classifications for industry limit rules.

These responses matched, in great part, the results of an A-Team survey, sponsored by Thomson Reuters, on shareholder disclosure. Presenting the results of the survey during the webinar, Kristin Hochstein, head of financial regulatory solutions at Thomson Reuters, noted that shareholder disclosure is one of the top regulatory compliance challenges faced by financial firms, with a majority having experienced issues around reporting accurately to regulators, and a minority having faced action from regulators for non-compliance.

Hochstein also reported from the survey that most firms use in-house software to address shareholder disclosure, but also noted that firms believe their processes are too manual and resource intensive.

Joining Hochstein on the webinar were Karl Schindler, head of content at FundApps, and Robert Andric, director and global head of regulatory shareholding reporting at Credit Suisse. The panel discussed increasing regulatory scrutiny of shareholder disclosures in a push for greater transparency, as well as the complexity of data management for disclosure, including problems around calculations, identifying which shares to include in disclosure and the intricacy of rules that vary across markets.

To ease the burden of shareholder disclosure, Andric suggested firms should automate as much of the process as possible, perhaps reaching an 80/20 split between automation and manual work. Schindler discussed the potential of third-party service providers supporting shareholder disclosure processes with cloud technology.

Whether firms use internal or external solutions, getting shareholder disclosure right can require investment, with respondents to a third webinar poll saying the need to invest is in software and workflow tools, and reference data management, and to a lesser degree in legal and advisory services, and staff.

Offering expert advice to data practitioners involved in shareholder disclosure, Andric suggested firms should develop generic solutions with a strong reference dataset that can support both existing and new regulations. Schindler encouraged practitioners not to reinvent the wheel of shareholder disclosure compliance and instead learn from others in the community working on the same issues. Hochstein concluded, saying firms need to work with a good data provider and dedicate time and resource to training internal teams working on shareholder disclosure.

Listen to the webinar to find out about:

  • Requirements of shareholder disclosure
  • Challenges in the reporting process
  • Reference data management issues
  • Areas for investment
  • Best practice approaches
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