US Corporate Actions: A Unique Challenge for Investors

The corporate action lifecycle for investors has many stress points along the chain – much of which is linked to investors being at the end of a long and risk-heavy process on each event.

Against a backdrop of expected volume growth, corporate action costs are expected to rise by 17% in the US over the next 3 years – owing to a range of pressures that include spiraling people costs, system transformation costs and other key elements that look set to rise faster than event volumes.

That this is 2% lower than the global average is cause for some optimism – as American market participants seem largely set to leverage their scale more effectively as their volumes grow in the near term.

Yet not everyone is able to scale equally. Whilst brokers and custodians expect their costs to grow within the 1-10% range over the next 3 years, American investors expect their corporate action costs to rise by 33% over the same period – three times more than their intermediary providers.

This huge disparity is cause for great concern and highlights a continuing lack of automation amongst US investors today. As event volumes rise, staffing costs look set to rise three times faster for investors than for their intermediaries – with the cost of risk rising eight times faster.

That America’s beneficial owners are struggling to manage their corporate actions to this degree is clear evidence that change is needed.

Leveraging several market surveys and numerous interviews with leading US fund managers, this report is designed to help investors in the US capital markets to understand the specific issues that are undermining their operations today - and to help them shape the business case for transformative change.