01.13.2012

Managing Corporate Actions

01.13.2012
Terry Flanagan

Investment firms are integrating corporate actions data into the front and middle offices.

Corporate actions data is essential to trading and portfolio management, and that’s spurring firms to integrate it into those activities.

“Data management is in explosive demand because of exponential increases in regulations, internal compliance and risk management and customer-driven needs for transparency,” John Mitchell, vice president of global sales and marketing at Asset Control, told Markets Media.

There are many market drivers for the need to have corporate actions data integrated into a firm’s data management, Mitchell said.

Customer mandates are becoming increasingly complex and corporate actions can have a direct impact on trading strategies being in or out of compliance with a particular mandate.  Corporate actions affecting stock prices need to be anticipated and stored for compliance and valuations purposes.  The ability to “normalize” stock prizes for splits (for example) is essential when doing regression analysis.

Asset Control has integrated today DTCC Solutions’ Global Corporate Actions Validation Service (GCA VS) into its AC Plus data management solution as standard functionality.

The integration offers Asset Control clients direct connectivity to DTCC’s pre-validated corporate actions data, resulting in a dramatic reduction in the cost and risks typically associated with the sourcing of high-quality corporate actions information.

Connectivity to DTCC’s GCA data feed, allows Asset Control to offer direct access to pre-cleansed corporate actions data for all downstream processes. The interface allows clients to populate their in-house repository with DTCC Solutions’ data and link to various other data types, including instrument and pricing data.

“Previously, our clients could bring in the global corporate actions (GCA) feed, which is basically a flat file of data from DTCC, and then, they had to manually work out which corporate actions events are relevant to their portfolio and also how their portfolio would be impacted by those corporate action events,” said Mitchell.

Now, with the direct integration, this manual process between securities data and corporate actions data is eliminated. Clients are now able to bring processed corporate actions data directly into AC Plus,” said Mitchell. “By removing this manual process, it saves our clients time, but also improves the accuracy of corporate actions data.”

Connectivity to DTCC’s GCA data feed, allows Asset Control to offer direct access to pre-cleansed corporate actions data for all downstream processes. The interface allows clients to populate their in-house repository with DTCC Solutions’ data and link to various other data types, including instrument and pricing data.

“Although corporate actions data has always been important for the back office, firms are quickly beginning to realize that front-office visibility can enhance trading strategies and improve portfolio pricing,” said Dan Thieke, vice president of product management at DTCC.

AC Plus helps financial services companies control the tremendous volume of data flowing through their organizations. Its data integration, enrichment and cleansing capabilities provide high quality, Mitchell said.

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