With the opening up of the Swift network to vendors for delivery of their corporate actions data, several data vendors have grabbed the opportunity and are in the process of launching ISO 15022-compliant data services. These developments are helping move the industry towards standardization and greater automation of corporate actions.
FT Interactive Data last week launched the first phase of its ISO 15022 service, which is being made available as an optional module within the vendor’s FTS online desktop portfolio administration tool. Meanwhile, the London Stock Exchange has completed a pilot phase with 12 customers and expects to launch its U.K. corporate actions data service via Swift’s FIN network in mid-August, becoming the first exchange to distribute this data via the network. Telekurs launched its ISO 15022-based corporate actions service in June (Reference Data Review, May 2004), and other vendors have products in the pipeline.
The London Stock Exchange believes it can differentiate its service from others, says Mark Husler, product manager at the LSE, as it is “as close to the source as you can get” for U.K. corporate actions. This is due to exchange’s operation of the Regulatory News Service. Despite opening up to competitive services a couple of years ago, RNS still carries an average of 90% of company price-sensitive news and events announcements, which the companies are required by law to provide. The exchange in turn, is a source of this U.K. corporate actions data to the vendors.
For the data vendors, emphasis is on the global coverage of their services. FT Interactive Data’s launch has made the data service available to existing and new customers via FTS, following a pilot involving close to 15 firms, although there is no schedule determined for migrating clients to the service yet. FT Interactive Data is also considering its options regarding access to the service via Swiftnet.
According to Nat Say, manager of infrastructure and deliver at FT Interactive Data, the ISO 15022 service will be offered at no extra charge to clients. The data will still be available at end-of-day as, “we have not seen any signs of demand for intra-day data in the U.K.”
Say says, “It was a large project to map all our data to the ISO 15022 format and took a lot of resource – particularly as we realized we’d have to cover the full global range of our data – but will result in increased STP rates for us and our clients.
“We estimate that the volume of events that can now be output as MT564 messages on a daily basis is now in the high 90% range and additional coverage will be added during the coming months.”
There is a difference of approach between the exchange and the vendors. The exchange is making native use of the Swift MT564 corporate actions notification format. FT Interactive Data and Telekurs have opted to map their own proprietary data to the standardized data format.
For the exchange, the development of this service means it can increase the timeliness of its corporate actions data delivery by offering intra-day individual messages in near real time to clients of the ISO 15022 service. Up to now, it has provided this data as an end-of-day batch file via third-party vendors or directly to customers, a service that will continue.
It is typically the larger scale firms, such as custodians, investment management and some fund managers that are in a position to utilize the data internally, says Husler. Most of the pilot firms will be going live with the service – the remaining couple will go live within a few months once their internal systems are ready to utilize the data fully. Firms are permissioned via Swift by the exchange using the BIC code library.
The exchange’s license fee for the corporate actions data service via Swift is £15,000 per year. Firms will also incur the Swift message charges with the regular reverse billing based on volume of messages. The license charge for users taking the corporate actions data (must be in conjunction with the Sedol database, both of which utilise the same platform) is £10,000.
The exchange may eventually consider extending the coverage to international markets, but based on feedback has decided to continue to focus on its home market in the near future. It is also planning to set up a software accreditation scheme, primarily for corporate actions processing software providers (such as Heliograph or Xcitek).
Interestingly, FT Interactive Data analysed its corporate actions content to find 94% was income announce-ments, 3% capital changes and 3% mergers and acquisitions. Of these, close to 100% of income and capital changes, and 75% of M&A informa-tion is fully coded. Say says he would like to see the standards extended to cover other data types such as pricing and static data.