The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

DTCC Releases First Drafts of ISO 20022 Corporate Actions Lifecycle Messages, Kirby Urges Firms to Provide Input

Following on from the release of its business case for the introduction of XBRL to the world of corporate actions last month, the Depository Trust & Clearing Corporation (DTCC) has finally released the first set of drafts for its new corporate actions messages, which are based on the ISO 20022 standard. The work is all part of the vendor’s corporate actions reengineering project, which is currently in its second phase and will eventually result in the replacement of 60 legacy systems when it is completed in 2015.

Earlier this year, DTCC published an implementation overview for the adoption of corporate actions announcement specifications and legacy file mapping documentation in order to allow for the mapping of data fields from legacy files to the corresponding data fields in the new event model. The release this week covers messaging specifications for the corporate actions lifecycle in its entirety and a template in order to relate data elements in the new messages to their event types. These events have therefore been broadly categorised into distributions, redemptions and reorganisations.

Patrick Kirby, DTCC managing director of Asset Services, explains that all of its corporate action ISO messages for announcements will be in place by 2011, at which point firms will be able to begin using them. “These corporate action announcement messages will provide DTCC’s clients with intraday enhanced data as early as next year,” he says. “We’re urging our corporate action customers to review these new documents carefully in the next several months and provide us with their input. We want to ensure that the industry helps shape the final documents and the new standards.”

Thus far, DTCC has published: a documentation guide; ISO 20022 message specifications for announcements; ISO 20022 message specifications for the corporate actions lifecycle; legacy file mapping documentation; corporate actions scenario documents; corporate actions event templates; information on connectivity options; and a corporate actions events dictionary and a data elements dictionary (all of which can be viewed here). Given that the vendor is only on phase two of six phases, the amount of work done thus far is proof of the project’s scale and complexity.

The vendor is confident that the move to ISO standards as the primary format for corporate actions announcement messaging is a major step towards decommissioning the use of proprietary formats. However, DTCC will continue to support its legacy proprietary files (CCF) until 2015, although it is hopeful that the industry will allow these formats to be phased out sooner rather than later.

According to Dan Thieke, vice president of DTCC Asset Services, the goals of the multi-year reengineering project remain based on the principles of enforcing ISO standards, providing high quality data, improving the identification and representation of events and providing both a new user interface and service options. The plan is to get as close to issuer data as possible through XBRL tagging of source documents and thus provide intraday delivery of this data to customers.

“All events will be presented under a single record (event-based as opposed to function or activity-based) regardless of the number of options, payouts, or DTCC services that may apply,” explains Thieke. “Events such as mergers with elections and optional dividends will no longer require multiple announcements to support processing. Additionally, a unique corporate action identifier will be introduced to provide a clear and consistent way of identifying events.”

Due to its size and complexity, the reengineering project is being deployed in phases, with announcements first, followed by elections and payments for distribution events, redemption events, and finally reorganisation events. Phase one was completed in October last year and involved adding additional DTC data elements to the Waves platform for GCA Validation Service (VS) customers.

The vendor is now in part one of phase two, which is due to be completed in April next year and involves the addition of these new ISO 20022 corporate action announcement messages. These will all feature a DTC unique event ID1 available to all DTC participants for DTC-eligible data and to all GCA VS clients. It also includes the addition of an inbound XBRL interface that will allow tagged documents that have been saved to an XBRL instance to be automatically loaded into Waves

The second part of phase two is due to be carried out between April and June next year and will result in full connectivity to issuer-based XBRL tools with the generation of the issuer driven unique ID at the point of dissemination, and issuer authentication, he continues. Phase three, scheduled to be finished in March 2012, involves the addition of a new customer user interface and ISO 20022 corporate action messaging for the entire lifecycle for distribution events, from announcements through elections and payments. This same process will be carried out in phase four, which is due to be completed in September 2012, but for redemption events. Ditto for phase five for reorganisation events and reorganisation processors, which will be upgraded. This phase will be the only one to involve mandatory changes to DTCC’s legacy reorganisation CCF files.

Phase six represents the end of the project and is scheduled for 2015 or sooner (if possible), when all DTC legacy CCF files are retired, as well as the GCA VS proprietary file and ISO 15022 messages.

Related content

WEBINAR

Recorded Webinar: Getting ready for Sustainable Finance Disclosure Regulation (SFDR) and ESG – what action should asset managers be taking now?

Interest in Environmental, Social and Governance (ESG) investment has exploded in recent years, bringing with it regulation and a requirement for buy-side firms to develop ESG strategies and meet disclosure obligations. The sell-side can help here by integrating ESG data with traditional financial information, although the compliance burden remains with asset managers. The EU Sustainable...

BLOG

Euromoney TRADEDATA Integrates EDI DerivActions to Offer Futures and Options Corporate Actions Service

Euromoney TRADEDATA has integrated Exchange Data International’s (EDI) DerivActions feed into its ViewXone service to provide a futures and options corporate actions solution. The integration extends a long-running collaboration between EDI and Euromoney TRADEDATA, and provides, according to Euromoney TRADEDATA managing director Mark Woolfenden, ‘an important part of the trade workflow that has been underserved...

EVENT

Data Management Summit London

DMS London brings together the European data management community to explore the latest challenges, opportunities and data innovations facing sell side and buy side financial institutions.

GUIDE

Valuations – Toward On-Demand Evaluated Pricing

Risk and regulatory imperatives are demanding access to the latest portfolio information, placing new pressures on the pricing and valuation function. And the front office increasingly wants up-to-date valuations of hard-to-price securities. These developments are driving a push toward on-demand evaluated pricing capabilities, with pricing teams seeking to provide access to valuations at higher frequency...