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As the world of asset servicing becomes more global and diverse,
the complexity of corporate actions is increasing with it. The
ever-elusive 'Golden Record' continues to haunt all functions as we
see some of the most complex bankruptcies, reorganization, and a
very high volume of debt restructuring during the pandemic. At the
same time, the operations teams managing these functions are
looking to shift towards more analytical tasks necessitated by
their front-office and portfolio managers (PMs). These two factors
drive significant demand for outsourcing corporate actions
functions, such as announcement capture.
While services in the market can produce an issuer golden
record, the operations teams still must vet these records against
their agents (custodians, sub-custodians, prime brokers) records to
create a final golden copy. This process is highly time-consuming,
as it requires chasing the agents for any missing records or data
discrepancies, resolving these discrepancies, training teams, and
creating the final golden copy as per the agreed operating
processes.
Following a survey of our customers, it was clear to see that
producing an issuer golden record can take between 40%-60% of an
operations team's time based on the volumes and complexity of the
corporate actions. There are also increased regulatory pressures
with the Shareholder Rights Directive II (SRDII) and new tax
regulations, requiring a timely, yet thorough review of corporate
actions notices. The operations teams are continuously asked to do
more with less, and they need a service that helps them manage
these demands and challenges while augmenting their
capabilities.
IHS Markit recognized this challenge and the need for a more
customized solution and launched the Managed
Corporate Actions - Agent Validation Service (AVS). AVS is
tailored to meet the operation teams' demands and leans on our 18+
years of experience in the corporate actions announcement space. In
addition, the service leverages our extensive relationship with the
network of over 90+ agents.
IHS Markit works closely with our customers to understand their
processes and create a solution that helps them maintain their
internal service level agreements and standards. To meet their
firm-specific requirements, customers can customize validation
processes, deadline management, and narratives by markets and event
types. The service allows customers to optimize their processes
with the help of our experts while maintaining the agreed standards
with the front office and PMs. Our managed services experts are
highly specialized in understanding the nuances around the various
markets, asset types, and corporate actions event types.
The service leverages our industry-leading Corporate Actions
solution that brings together the power of our award-winning
validated golden-source data, an industry-leading corporate actions
processing platform, and a team of industry experts who work
closely with customers to understand their processes around
narrative scrubbing, tax breakdowns, data changes and makes
recommendations. These recommendations create a set of procedures
that help customers to improve their workflow and operational
efficiency. AVS also provides unique reporting and insight into the
custodian data and performance to help customers make better
decisions.
In one recent engagement, our AVS team worked with a leading
investment bank to transform their back-office corporate actions
operations, onboarding over 250k+ securities across over 80+
markets and multiple asset classes. During our business process
modeling, the teams agreed on over 150 standard operating
procedures. This transformation allowed the bank to simplify its
internal processes and reduce its internal processes from 255 to
less than 10.
With IHS Markit's Managed
Corporate Actions - Agent Validation Service, operations teams
partner with a team of experts who understand what keeps them awake
at night, how to augment and optimize their operational
capabilities and reduce risks and costs associated with the growing
demand of corporate actions.
Please visit our AVS webpage
and speak to one of our Corporate Actions Managed Services experts
for more information.
Posted 23 August 2021 by Jatan Pathak, Senior Product Manager, Corporate Actions, S&P Global Market Intelligence
