UK-based Web Services Integration and US-headquartered XSP have forged a partnership under which they have integrated their solutions for tax reclamation and corporate actions processing respectively, in order to automate the withholding tax reclaim process within the corporate actions lifecycle.
The integration has been eased by the fact that Web Services Integration’s Xceptor Tax Hub product and version 5, the newest release, of XSP are both .Net-based, according to Web Services Integration director Peter Madigan. He reports that several of XSP’s 60 or so clients have expressed an interest in implementing the withholding tax solution, and the vendor is progressing discussions with them currently.
When jointly implemented with XSP, Xceptor Tax Hub – already in operation at UBS Investment Bank in London and being piloted elsewhere – would pick up notifications of income events from XSP, either in real-time or batch mode, analyse the dividend to see whether the underlying beneficial owner has been subjected to withholding tax, and determine whether it is in a position to claim it back. “We’re the shop next door to the XSP department, if you like,” says Madigan. “Our system then progresses the reclaim through to collecting the cash and passes the information back to XSP.” When implemented without XSP, Xceptor Tax Hub typically takes feeds from banking, portfolio management or fund accounting systems, he continues. “All we need is a notification that an income event is happening.”
Integration with other systems is effected using the Xceptor Data Hub – which was actually the first product Web Services Integration developed, Madigan says. “Our Data Hub product is a generic tool for managing data coming in in various formats – Excel, CSV, XML and Swift – designed to enable non-technical users to transform data into the formats they require.” Though the vendor didn’t initially think there would be a market for Data Hub as a standalone solution (rather envisaging it would simply help with integration of a range of niche back office applications such as the Tax Hub), it has in fact made a number of sales of it on its own, including to Telekurs and fund data specialist Financial Express. “A number of data vendors are interested in the product,” he says, “and they are using it mainly in the intraday pricing arena. There is also a market for it in the investment banking business. For example, we are talking to the reference data management group at one bank about using Data Hub for formatting instructions – handling changes to customers’ settlement instructions which are coming in in a variety of formats, including pdfs. We are developing the product to enable it to parse pdfs and convert the data into the required format.”