Standardization and automation are the buzz words in the corporate actions industry today. The industry has come a long way in the last decade from the overtly manual processes involved in the corporate actions processing. However, a lot is yet to be achieved.
Complex offerings, existence of multiple incongruent standards for messaging and globalization of financial markets with retention of market specific nuances have made the process of standardization, thereby automation is a nightmare for all stakeholders.
ISO 15022 has made an impact and is widely used in the European zone to achieve automation. However, its flexible structure can be understood and implemented in multiple ways, which is why it deviates from the basic definitions of a standard. In addition, the standard does not cover for everything especially in the realm of taxation, terms and conditions, restrictions, allowances, voting and decisions.
Various markets have responded to this need by looking for a standard notification, in addition to the required text. For example, ISO 20022 by issuer/agents such as Euroclear, XBRL in China and Japan. However, these initiatives are still in a nascent stage.
Envisage the combined effect of automation achieved through ATMs, internet banking, and e-mail in the banking industry today and it makes one wonder how things could have worked with the “ancient way” that was prevalent not more than a decade before.
Hence, “automate corporate actions; de-risk your business” is the motto.
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