A pilot scheme to collect and compare corporate actions announcements from multiple sources for client reporting purposes has been successfully completed by JPMorgan Worldwide Securities Service.
The service, called Announcement Capture, puts the collected data through a series of validation checks before being passed on to clients in Swift formats as part of the custodian's efforts to improve STP rates in corporate actions. Discrepancies are flagged up by JPMorgan's Bournemouth-based corporate actions team which then will contact issuers and market data providers to agree on the golden record.
"Formulating the 'golden record' of a corporate action historically has been a labour-intensive process," says David Kane, JPMorgan Worldwide Securities Services' operations executive.
"JPMorgan developed Announcement Capture to achieve the highest possible quality and STP rates when creating the record for our clients. Now that the pilot program has been a success, we are rolling out Announcement Capture across the 90-plus markets where we support our clients' investments."
The need for more efficient corporate actions processing was highlighted during a conference session at the Sibos event in Boston, where a number of custodians described their own internal efforts to improve their corporate actions operations.
"Corporate actions is the highest risk business area for the global custodian," said Justin Chapman, global head of process management asset servicing at Northern Trust. "What we are trying to do is be cost-neutral. It is a massive programme costing millions of dollars every year."
Meanhwile Patrick Colle, head of clearing and settlement at BNP Paribas Securities Services commented on the second phase of the Paris-based custodian's corporate actions' programme, due to go live in October, adding that it had been an extensive undertaking involving the construction of 14 separate interfaces .
"From a performance perspective, we want to hit an STP rate of 90% for mandatory corporate actions. So far we have reached 70% with big variations from country to country," he said.