Fidelity ActionsXchange has recently upgraded its ActionService platform via the addition of an announcement offering to capture corporate actions data closer to the issuer source and this will act as the foundation for the development of the vendor’s planned subscription-based solution, says Laura Pollard, executive vice president and head of Fidelity ActionsXchange. The vendor is hoping to release the new offering in the first quarter of next year to provide clients with more flexibility around the corporate actions data feeds they wish to receive.
Following on from the rollout of its corporate actions cleansing solution at Knight Capital Group’s clearing subsidiary Knight Clearing Services earlier this year, the vendor has been working on the development of its Issuer Source solution, which it released earlier this month. Fidelity ActionsXchange has therefore focused on adding to its multi-source solution by providing its own data feed, which collects data from various North American exchanges and the Securities and Exchange Commission’s Edgar database.
Pollard notes that the vendor’s own data feed has already proved its worth and highlights recent internal benchmarking data that indicates Issuer Source is ahead of the other data feeds it takes in around 20% of the time. “We have been benchmarking this since August and it indicates that our data is often ahead of the other feeds within a 24 hour period,” she explains.
There is a lot of pressure from the front office for timely data and the regulators are also emphasising this requirement for the data underlying regulatory reports, hence so many vendors are seeking to prove their worth in this regard. However, Pollard says that accuracy is also high on the agenda and puts emphasis on the vendor’s capabilities to this end.
The vendor has also recently expanded its notification of complementary events, such as prospectuses and annual meeting notifications, and automated the dissemination of required investor level disclosures on behalf of its clients. Pollard indicates that the development plans do not end there, however, and Fidelity ActionsXchange is also looking at the notifications and response, which she says is fundamental to event related data. This encompasses areas such as proxy voting announcements and could be expanded to the area of pricing, she adds. “This could encompass any event related data and down the road, we will also be looking at class actions,” she says.
This will, of course, require some degree of technology investment on the part of the vendor, which Pollard notes will not be insubstantial but should not prove too challenging. “It’s a natural extension for us to get into this space and we expect it to be out to the market by the second half of next year,” she elaborates.
As with many other vendors, the Asia Pacific region is on Fidelity ActionsXchange’s agenda and Pollard indicates the firm has recently been discussing the potential of the Japanese market with a research firm in the country.
A number of Fidelity ActionsXchange’s clients are working with Swift, XBRL US and DTCC on the corporate actions pilot programme and Pollard indicates that as a result, the vendor is keeping a close eye on developments around ISO 20022 and XBRL. “We currently support ISO 15022 and will look to support any future market standards,” she says.
However, she notes that the appetite to move from 15022 to 20022 has not yet reached a tipping point within the industry, as many are cautious about the investment required and the benefits involved. “There is certainly interest from our clients about who is moving forward with 20022 in the pilot but they are largely ambivalent about adopting the standards in the next 12 to 24 months themselves,” she says. This is a common observation across the industry at the moment and many industry participants and vendors have noted the lack of a definitive incentive to move to 20022 in the near future.
In general though, the corporate actions market has picked up since the lows of the post-crisis lull and Pollard indicates the vendor has seen an uptick in RFP activity. “There is much more understanding of the risk management imperative and cost saving opportunities of investing in corporate actions,” she says. “Developments such as the Office of Financial Research in the US are also raising the profile of this data and that of counterparty identification.”
Pollard points to the work of advisory firm Financial InterGroup and standards organisation GS1 around the potential of introducing barcodes into the financial services industry as a development of interest for the future. “The industry needs to be open minded and consider initiatives such as these that have worked so well for other industries. The fact that the issuer community is also using this standard is also an important factor to be considered,” she contends.