Automation of corporate actions allows investors to make well-informed decisions on their portfolio holdings in a timely manner
The Depository Trust & Clearing Corporation (DTCC) and SWIFT, the financial messaging provider for more than 10,000 financial institutions and corporations in 210 countries, have announced that Brown Brothers Harriman (BBH) has become the first financial institution to go live on the new corporate actions real-time messaging solution. The new solution, which DTCC launched late last year for corporate actions announcements, is part of a broader initiative by DTCC to reengineer its corporate actions platform and adopt the global ISO 20022 standard as part of the core service offering to its participants.
DTCC is offering its solution with a range of new subscription options. BBH has been an active pilot member, and has provided strategic feedback to help establish a global standard throughout the testing and validation process. Based upon the progress during the pilot, BBH implemented reorganization announcements and will transition the remaining announcement types during future phases. Reorganization announcement processing is very interactive and requires a high level of interpretation. The move from using proprietary files to implementing ISO 20022 real-time standard messaging will offer an opportunity to reduce interpretational risk. It will also improve timeliness and accuracy of corporate action information.
“This is a significant milestone in our journey to improve the client experience. ISO 20022 is a critical building block, which can reduce risk and streamline processing,” said Cira Neira, Senior Vice President, Head of Corporate Actions, Brown Brothers Harriman. “The level of granularity and standardization in the new messages enhances transparency and adherence to market practice. This will give asset managers more time to make the investment decisions required for these event types,” said Sonda Pimental, Vice President, Brown Brothers Harriman and Co-chair of the ISITC Corporate Actions Working Group.
“Today’s announcement further demonstrates our dedication to fostering increased automation and transparency for U.S. corporate actions announcements,” said Dan Thieke, Managing Director, Asset Services, DTCC. “By moving to one global messaging standard, BBH will process corporate actions more efficiently for clients by utilizing their existing infrastructure investments in DTCC and SWIFT.”
“The corporate actions pilot program is yet another way we are working with the industry to develop a common set of standards and a shared set of solutions,” Chris Church, SWIFT’s Chief Executive Americas and Global Head of Securities said. “BBH is taking an important first step by eliminating previously manual tasks, such as re-keying and exception processing for corporate action notifications.”
The announcement is the latest milestone achieved during the Issuer to Investor: Corporate Actions initiative, which was launched in May 2009 to improve the processing of corporate actions data in the U.S. BBH was the first financial institution to join the ISO 20022 corporate actions messaging pilot program in 2010. There are other pilot firms close to implementation as well.