A-Team Insight Special Reports

Corporate Actions Europe 2010

The European corporate actions market could be the stage of some pretty heavy duty discussions regarding standards going forward, particularly with regards to the adoption of both XBRL tagging and ISO 20022 messaging. The region’s issuer community, for one, is not going to be easy to convince of the benefits of XBRL tags, given the potential costs involved. Moreover, many within the asset servicing community itself are holding off on moving to ISO 20022 for the time being, in light of the economic and regulatory environment. Persuasive arguments are needed in order to avoid a stalemate.

In June this year, Swift, DTCC and XBRL US produced a case study in order to illustrate why firms should adopt XBRL tagging for corporate actions, globally. And that reason comes in the form of an estimated saving for the industry of US$400 million a year and potential direct savings to investors and their investment managers of US$172 million annually. Although the initial focus is on the US market, all parties in the project are keen for this to be extended to Europe and the rest of the world.

The estimates are all part of the project, which officially kicked off in May last year, to map the XBRL taxonomy to the ISO 20022 messaging standard in order to ensure that they are compatible in the future, thus bringing the US and Europe into line in the future. The business case is therefore aimed at proving the benefits, including the more tangible ones, of tagging corporate actions data from source issuer documents with XBRL data tags. It contends that such a move would therefore improve the straight through processing rate by around 30%, thus resulting in key cost savings.

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