The Society for Worldwide Interbank Financial Telecommunication (Swift) is opening up access to its network to third-party providers of corporate actions data. While Swift already carries corporate actions messages, the move represents the first time commercial data suppliers can distribute their corporate actions services via the network.
Bowing to pressure from its financial services clients, Swift has approached the leading suppliers of corporate actions data about distributing their services via the Swift network. Among those contacted are Financial Times Interactive Data, Reuters and Telekurs. The London Stock Exchange’s information services arm is expected to become the first independent commercial entity to distribute corporate actions data via Swift; other vendors are in negotiations.
Corporate actions data transmitted over the Swift network are now segmented into five types with the messages MT 564 to MT 568 reserved for their use (see table, opposite) based on the ISO 15022 standard. The third party data will be transmitted using the MT564 notification message.
This data is currently entered manually by custodians who re-key notices received from clients for distribution via Swift – an inefficient and costly method. Real-time distribution is not available using this method. Allowing consolidators of such data to distribute the information in near real-time will help reduce operation costs, time delays in processing data and the risk of errors.
The move is a boon to the information suppliers. With around 8,000 connection points currently on its network, Swift provides the corporate actions data vendors with a broad and valuable audience to their services.
It also adds ‘stickiness’ to Swift’s overall product offering, by supplementing and validating the custodian and local agent corporate actions information currently distributed by its network. The ISO 15022 standard used by Swift includes a sender’s reference space, which will be used to identify the source of corporate actions messaging.
The London Stock Exchange, which has been supplying UK corporate actions data for over 20 years, is expected to become the first commercial provider of this data in near real-time via the Swift network. It is being developed as part of the Sedol Masterfile (SMF) project and will also be available in the ISO 15022-compliant format directly from the exchange. The annual fee for this service will be £15,000, excluding Swift message costs. It will go live in the first quarter of 2004.
The exchange plans to cover 50 corporate actions events – including dividends, AGMs and EGMs, name changes, mergers and takeovers, repurchase offers, stock splits and reverse stock splits, rights distributions, trading suspension or delisting notices, and many more – and this list may grow before the launch date.
Other vendors are expected to go into pilot in November, with an official launch next June, although this timeframe could not be confirmed by press time. Swift did not return calls by press time but sources say that Swift is expected to charge a flat fee to the vendors making use of the network, although details have yet to be fully determined. Users will require a licensing agreement describing commercial terms with their chosen suppliers. Swift also operates a reverse billing fee schedule for users.