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A-Team Insight Blogs

Talking Reference Data With Andrew Delaney: Markit Set to Join Corporate Actions Fray as It Ponders DTCC’s GCA VS

At the risk of sounding like the proverbial Boy Who Cried Wolf, it now seems that Markit is at due diligence phase in its attempt to acquire the DTCC’s Global Corporate Actions Validation Service (GCA VS). You’ll recall that just a few weeks ago Markit abandoned its interest in EDM stalwart Asset Control, ostensibly having baulked at the company’s alleged debt levels. It now seems to have found another acquisition target.

Markit has emerged over the past few weeks as prime contender to acquire the DTCC unit, after a bunch of usual suspects kicked the tyres on it, among them SunGard (recent acquirer of XSP), Interactive Data and Broadridge.

This latest flurry of interest in corporate actions processing platforms underscores our prognosis that this remains one area of the business that’s ripe for automation. That belief drove our decision to include a session on corporate actions automation and risk at our forthcoming Data Management Summit on March 12 in London.

You can register here. Bring a friend. Make a day of it.

Our corporate actions session will feature a scene-setter from recognised expert in the field Barry Adams of BNY Mellon in Dublin, who’ll be joined for a panel debate by Robert Hofstetter, Director & Head of Securities Markets, Data & Control, at Bank Sarasin – who joins us courtesy of Gold Sponsor AIM Software – and by Exchange Data International’s Kevin Brady. What with recent comings and goings in the space, it promises to be an insightful session.

For those of you unfamiliar with GCA VS, the service does pretty much what it says on the tin. That is to say, it sorts out exceptions to clients’ incoming corporate actions data feeds. When there is a mismatch between internal data, or messages provided by custodians, and corporate actions feeds from the likes of SIX Financial and Interactive Data, exceptions are referred to GCA VS’s team for analysis.

We asked Markit to confirm their interest. “We never comment on acquisitions until they are public so we decline to comment.” Intriguing. Sounds like they’re still busy. Of course, Markit is already familiar with the way DTCC works, being partner in the MarkitSERV post-trade processing joint venture with the big US agency.

If Markit’s interest does indeed proceed to a transaction, GCA VS would give it a tool that could be co-opted into its broader range of capabilities that one could file in the Really Useful category, particularly for sell-side firms with big operational obligations. Adding GCA VS would certainly fit the bill for Markit’s remit, explained to us thus back in 2009 by then-EVP, global head of indices, and co- head of equities, commodities, Markit Economics and Markit Document Exchange (MDE) Niall Cameron: To solve the kinds of industry issues that the buy-side and sell-side institutions that are today among its shareholders and customers have identified as too painful and expensive to deal with themselves, and for which an individual solution may not ultimately suffice.

I think this sums up what Markit is all about nicely, and with some major names behind it the ‘vendor’ is well-placed to position itself more as a ‘utility operator’.

GCA could fit with some of the ‘utility’ discussions Markit appears to be having with practitioners across the board. These extend to possibilities for establishing a utility for handling thorny and highly duplicated tasks like client onboarding and KYC checks, possibly involving its long-established, aforementioned Markit Document Exchange.

How the sum of the whole emerges in the event of an acquisition of GCA VS remains to be seen. But at a time of broader retrenchment, Markit seems to be one game in town that still wants to play.

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