Capital markets firms routinely weigh their nice-to-have capabilities against their need-to-have platforms. In such a heavily regulated environment, the need-to-haves often tip the scales.

While terms like “innovative” and “cutting-edge” tend to get reserved for front-office technologies and datasets, some vendors have attempted to give facelifts to the back office, where more esoteric functions like accounting, record maintenance, and reference data are managed.

To that end, data giant Bloomberg has been on a two-year mission, which is ongoing, to revamp and relaunch its corporate actions platform dubbed Corporate Action Solution. The service focuses on the ingestion and cleansing of corporate actions data, which runs the gamut from stock splits, capital changes, distributions and cash dividends, mergers and acquisitions, rights issues, and spin-offs.

Much of Bloomberg’s recent investment into its corporate actions platform has centered on making data more complete on its side, while delivering that information to clients in a more timely and accessible manner, says Maureen Gallagher, the company’s head of enterprise reference data.

“When we look at how we approach our corporate actions, we really look to have the best coverage that we can from that announcement. And to do that we’ve continued to invest in a team of corporate actions analysts across the globe who work to normalize these highly complex and non-standard corporate action announcements to have an ease of integration point for our customers,” she says.

The team of analysts is distributed across geographies and employs a follow-the-sun model, which allows for announcements made by Asia-based companies during their business day to be ingested, cleaned, and delivered to US-based clients while they’re asleep, and vice versa.

Technologically, Bloomberg has made a point of upgrading its datafeeds and establishing a consistent way to consume and interact with corporate actions data regardless of which Bloomberg product a client is using. End-users can opt for Bloomberg’s pre-set, universal datafeeds, which might cover all of an asset class or all of a geography, or define their own securities-of-interest lists. They can use a Bloomberg Terminal, for example, to conduct reviews and analyses of the data or consume the data via traditional enterprise datafeeds for off-terminal usage and licensing, but Gallagher says the user experience shouldn’t differ according to users’ chosen mechanisms.

At the same time, Bloomberg has also made its corporate actions data available through APIs such as Hypermedia, the company’s Rest API that allows access to any capability or data that is accessible through the Bloomberg Enterprise Access Point, and Bloomberg Query Language, an API that Bloomberg launched in 2019, which allows users to run analytics in the Bloomberg cloud via Excel.

“We don’t just want to solve a single use-case,” Gallagher says. “Our goal is to help support everything from trading use-cases to portfolio maintenance. It could be backtesting trading strategies or other back-office accounting and corporate actions processing workflows.”

A changing landscape

Gallagher emphasizes that investment into the product is ongoing, and that the vendor is planning further enhancements.

In 2020, Bloomberg’s platform Data Management Service (DMS), a technology tool used by clients to manage their corporate actions data but a separate business from Gallagher’s Corporate Action Solution, accounted for just 3% of global market share, according to a report by Firebrand Research at the time, which also projected that spending on corporate actions data solutions and services would increase from $276.8 million to $364 million by 2025.

Rival IHS Markit, which acquired its own corporate actions service from the Depository Trust and Clearing Corp. (DTCC) in 2013, has dominated the space with a 45% market share, while Fidelity’s ActionsXchange held 24%. SimCorp (9%), GoldenSource (7%), Asset Control (7%), private bank Brown Brothers Harriman (5%), and Bloomberg made up the rest, the report said.

But change is on its way. In 2020, WatersTechnology reported that Fidelity was quietly shuttering ActionsXchange due to the business’ low margins, a decision it apparently made in 2019. While it still isn’t clear whether all its users, who were primarily based in North America, are off the service yet, the exit of the second largest service provider undoubtedly paves a path for new entrants and for existing players to step up.

Firebrand’s founder and the report’s author, Virginie O’Shea, expects that each of the existing vendors will snap up a fraction of Fidelity’s base, but that IHS Markit’s offering may receive outsized interest due to its similarities to ActionsXchange.

While the aforementioned vendors focus on data ingestion and cleansing at the time of an event’s announcement, there are others, such as FIS XSP and SmartStream, that support corporate actions’ full lifecycles via managed services. However, managed-service providers have struggled historically to gain enough traction to become profitable, and their offerings are considerably narrower, having been designed to meet the requirements of corporate actions teams, rather than the reference data needs of a firm more broadly, according to O’Shea.

“I don’t expect too many vendors to rush into the full lifecycle space, but one to watch is Broadridge as they have a good handle on issuer services already,” she says. “Bloomberg is certainly spending a lot of time and focus on improving their data services, and I expect they’ll be well-placed to support reference data including corporate actions and securities data of all kinds. It isn’t all just about the Terminal.”

Editor’s Note: An earlier version of this story did not distinguish between Bloomberg’s Corporate Action Solution and Data Management Service, which are separate businesses. The article has been corrected to avoid any ambiguity.