Save the date: How an events calendar can improve corporate actions workflow

Corporate actions—dividend payments, stock splits, M&A activity, and rights issues, among others—can greatly impact stock prices and portfolio values. Yet the process of managing the information about these issues at banks and asset managers is often a highly manual function performed by back-office specialists, out of sight and out of mind of other parts of the firm.

“Corporate actions have typically been a last resort or a last target within the back-office to automate, or innovate,” says a global head of custody and clearing at a London-based bank. And within the corporate actions space, one area that has been particularly neglected is corporate actions events information—understanding what’s scheduled to happen on what date—leaving the current state of corporate actions event and notice delivery systems disorganized, this executive says. “Many sell-side firms maintain corporate actions event information in the form of static PDF files and text. It’s very manual.”

Typically, because firms collect corporate actions events information from these types of files, it can be hard to determine which information would be useful to the relevant business units. And sometimes, the data might be written in a format that is difficult for a layperson outside the back office to understand. So, any effort that improves the mechanisms by which firms capture and maintain that information will help mitigate some of the pain firms face.

Processing a corporate action incorrectly—or missing it because of improperly managing the date of the event it relates to—can result in costly errors, so it is unlikely to be neglected entirely, says Roy Kirby, head of core products at financial data and services provider SIX. However, he acknowledges that the automation of corporate actions event processing is lagging behind other areas within financial firms. To achieve straight-through processing, financial organizations must obtain and maintain accurate and timely corporate actions information. 

Kirby has spent more than seven years at SIX building products for customers in the corporate actions, security master, asset servicing, regulation, and compliance areas. He is currently building a corporate actions calendar, which he says would help firms visualize their corporate actions workflow in a similar manner to how they plan upcoming meetings and other events using their Outlook or Google calendar functions. The calendar would also free up time for analysts who currently keep track of upcoming corporate actions events manually.  

“We’re starting to think about how we visualize this data and get that to end users in a slightly different way,” Kirby says.  “You’ll be able to see that next month will be a busy month because there are 200 events, for example. So if I’m running a corporate actions team, I can think about planning my resources.”

Imagine now that instead of your back office just looking after corporate actions, you can have a little widget on your screen that is linked to your client portfolio that says, ‘In this client portfolio next week, there will be three corporate actions.’ All of a sudden, they’ve got three reasons to call that customer

Roy Kirby, SIX

Corporate actions teams probably already plan their resources and workflows around corporate actions events flow, Kirby says, so having a calendar will make it easier. 

To build the calendar, SIX is linking its corporate actions experts that understand how corporate actions work—for example, how a stock split should be handled differently from a dividend—with programmers who understand the user experience so that information can be presented in a way that is easy for the end user to understand. 

The new interface, which will be available to SIX’s iD desktop users by July, will also reflect any changes in corporate actions dates. “Corporate action dates often change, so the interface can pick up on those and reflect those changes. Our corporate actions are updated every 15 minutes. So this visual tool will work on a database that follows those updates,” Kirby says.  

It takes a village

SIX is also working on proofs-of-concept for the calendar with Microsoft Teams and Symphony’s messaging platform.

For example, if a firm uses Microsoft Teams, SIX has created a bot into which users can type a security’s Isin code and “SIX corporate actions,” and the bot will respond by displaying any pending corporate actions for that particular security.

“If you think of the workflow there, if you’ve got a complex corporate action happening, and you know the people you need to speak with internally to process that corporate action, you can get them instantly on a call to discuss it. I think it will speed things up for corporate actions processing. A lot of this is done via email at the moment,” he says. 

Kirby adds that SIX is open to working with multiple vendors and partners to make corporate actions more seamless and easy to deal with. “Because of the way we’re structured—owned by 122 banks—one of our focuses is to make things better for the banks. If we partner to do that, then that’s fine and we’re open to doing that. But there’s nothing specific in the pipeline at the moment for corporate actions, but we’re always open to that,” he says.   

Beyond the back office

Corporate actions can be a complex dataset to deal with. It is typically well-understood by those deeply embedded within a firm’s security master or back-office function. But the corporate actions calendar will help make that information more easily accessible by other users within a firm so they can see it and understand it in a simple manner, Kirby says. 

For example, back-office teams would benefit from early notification of upcoming events, while the front office could use an upcoming corporate action to take trading positions. The event calendar can show mandatory events, such as stock splits, and non-mandatory or voluntary events, such as dividend re-investments. The calendar is fed and updated with the same data that feeds the full SIX corporate actions service and is updated in near-real time. 

Kirby says the calendar can be used to view corporate actions for a specific asset class by geography—for example, US mandatory events for the upcoming week and month—or to view all the corporate actions events for the next two weeks within a specific customer portfolio.

“The portfolio view will be very useful for wealth managers who could use this information as a reason to call end customers,” Kirby says. “Imagine now that instead of your back office just looking after corporate actions, you can have a little widget on your screen that is linked to your client portfolio that says, ‘In this client portfolio next week, there will be three corporate actions.’ All of a sudden, they’ve got three reasons to call that customer.”

The same applies to institutional asset managers, he says. These firms typically already have access to terminals from multiple vendors. So, getting the data is not an issue. But extending that data to other users within the firm can be costly. 

“They’re probably paying a lot of money for that data every month, and you don’t want to extend that to everybody in your organization because that cost is just huge. But you might want to extend bits of it to people who are customer-facing in your organization,” he adds. 

It’s not that the functionalities required to provide that data to other users within a firm don’t exist. Rather, it’s more that it isn’t in the right place—it’s unlikely that client-facing users have access to a back-office corporate actions system. 

“Some banks have tried building [a corporate actions events calendar] before, but it probably was just a bunch of macros and rules put together. It’s just one of those things that has been there for a long time that people have just been coping with,” says Barnaby Nelson, CEO of the ValueExchange, a Toronto-based research, benchmarking and sales enablement advisory firm. 

But Nelson says that while offering a corporate actions event solution is handy, it won’t work as well as intended unless it’s linked to a position-keeping system. 
 
“If you put it on the desktop, how do you know which events are yours vs. which events are others’? Maybe they create a watchlist or something, which can be clunky, but ultimately, custodians should be the ones offering this because they’ve got all the holdings,” he says. 

That’s something SIX has already thought of: Within the SIX iD terminal, the calendar can be linked to customers’ portfolios, Kirby notes.