Mitigating Risk in the Corporate Actions Lifecycle –

Challenges and Opportunities 2014 and Beyond

Kerry White
Managing Director
Brant Rock Advisory Services
Agenda
• The Corporate Actions Lifecycle and Issues We Face
• Factors Impeding Corporate Actions Automation Projects*
• Potential Consequences Of Not Addressing Issues
• Regulatory Impacts
• Conclusions

*Source: “Corporate Actions 2012: A Global Survey of the Corporate Actions Marketplace,“ Swift and CityIQ, 2012
The Corporate Actions Lifecycle
Event Issues At Hand
Posting
Management

• Greater Volume

• Increasingly Complex Transactions

• Diverse Range Of Asset Classes

Entitlement Position • Market-specific Nuances
Calculation Management

• Lack Of Automation

• Multiple Platforms And Legacy Systems

Election
Management
• Financial Provisions To Protect Against Losses
 Factors Impeding Corporate Actions Automation Projects*

Difficulty Building Business Case

14%
19% Doubts About Attaining STP

Cost of SWIFT Messaging

11%
No Impediments
9%
We are Fully Automated
3%
3% Lack of Management Buy-In
2%
Competing Internal Priorities
10%
Lack / Inadequacy of Solutions
29%
Limited Return On Investment

*Source: “Corporate Actions 2012: A Global Survey of the Corporate Actions Marketplace,“ Swift and CityIQ, 2012
Potential Consequences Of Not Addressing Issues
• Missed Investment Opportunities
• Losses Due To Incorrect Instructions And Valuations
• Increased Costs And Reduced Profits
• Sub-optimal Investment Decisions Based On Incorrect Data
• Reduced Investment Performance
Regulatory Impacts
• Regulatory change is a global phenomenon
• Firms will be significantly impacted by a rapidly changing environment with multiple
changes to operational processes
• There is no shortage of initiatives:
• LEI
• MIFID2
• EMIR
• AIFMD
• CSD
• T2S
Conclusion
• Adoption Of Common Messaging Standards And Automation Will Streamline Corporate
Actions Processing
• Outcome Will Be Improved Quality And Timeliness Of Data
• There Are Still Challenges To Overcome
• Success Requires Greater Collaboration Among Industry Players
• Genuine Engagement With The Securities Issuer Community Would Also Help
• Increased Profits And Improved Investment Performance Should Accrue
Brant Rock
Advisory Services

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