CHALLENGES INCORPORATE ACTIONS PROCESSINGКлючевые задачи обработки корпоративных событий

MARKET DATA DAY

MARC SOMMERMOSCOW, 23 MARCH 2011

AGENDA

CORPORATE ACTIONS – AN OVERVIEW

CORPORATE ACTIONS PROCESSING STEPS

PAINPOINTS• Continued lack of unified standards / messaging /

formats

• More complex security and complex event types

• Non-standard announcements

• Events from emerging markets

• Complicated entitlements communications and processing

• Dealing with voluntary and elective actions

• Increased volume of reported corporate actions

THE RISKS

DATA QUALITY

TWO SOLUTIONS:STANDARDISATION AND AUTOMATION

STANDARDISATION

DATA STANDARDS

WHAT IS ISO 15022?• The International Organization for Standardization (ISO) is a

worldwide federation of national standards bodies

• ISO 15022 sets the principles and standards of corporate actions that enables the securities industry to design messages on the basis of ISO 15022 syntax and message design rules, a dictionary of data fields, and a catalogue of messages

• SWIFT is the ISO 15022 Registration Authority

• ISO 15022 MT 564 Corporate Action Notification and MT 568 Corporate Action Narrative messages are available

• Moving to 20022 XML

WHAT ARE WE TALKING ABOUT? CASH DIVIDEND GOLDMAN SACHS EXAMPLE{1:F01REUTGB210XXX0000000000}{2:O5641448110321REUTGB210XXX00010000031103211448N}{4::16R:GENL:20C::CORP//0300000001090570:20C::SEME//0300000002663108:23G:NEWM:22F::CAEP//DISN:22F::CAEV//DVCA:22F::CAMV//MAND:98C::PREP//20110321144853:25D::PROC//COMP:16S:GENL:16R:USECU:35B:ISIN US38141G1040/GB/2407966GOLDMAN SACHS GROUP ORDUSD 0,01:16R:FIA:94B::PLIS//EXCH/XNYS:16S:FIA:16R:ACCTINFO

:97A::SAFE//NONREF:16S:ACCTINFO:16S:USECU:16R:CADETL:98A::ANOU//20110118:98A::XDTE//20110228:98A::RDTE//20110302:22F::DIVI//INTE:16S:CADETL:16R:CAOPTN:13A::CAON//001:22F::CAOP//CASH:17B::DFLT//Y:92F::GRSS//USD0,35:16R:CASHMOVE:22H::CRDB//CRED:98A::PAYD//20110330:16S:CASHMOVE:16S:CAOPTN-}

MAJOR BENEFITS

AUTOMATION

REQUIREMENTS

CORPORATE ACTIONS AUTOMATION DRIVERS

CORPORATE ACTIONS AUTOMATION

KEY PLAYERS IN CORPORATE ACTIONS AUTOMATION / PROCESSING

THE FUTURE

ISO 20022 – UNIVERSAL FINANCIAL INDUSTRY MESSAGE SCHEME

Source: ISO

ADVANTAGES ISO 20022 BRINGS OVER ISO 15022• Builds on the ISO 15022 data dictionary concept and

registration infrastructure, but strengthens the monitoring by the industry

• Uses a more robust, syntax independent development methodology based on UML modelling of business processes and transactions

• Uses XML as the syntax for the actual physical messages

• Has a wider scope than ISO 15022, which is only for securities messages

• Is in line with directions taken by other industries (UN/CEFACT)

Source: ISO

QUOTE

This limits the ability to truly automate corporate actions and is

the reason I’m aproponent of ISO 20022

A pro-ISO 20022 European head of operations, when commenting on the free text aspect of ISO 15022

Source: A-Team Group

QUESTIONS?

HOW WE CAN HELP

CORPORATE ACTIONS TEAMS

COVERAGE – DEPTH, BREADTH, COMPLETENESS AND TIMELINESS