4. A simplified, accelerated model
The impact of trust, speed and scalability
ASX Case Study
Too many sources of information. Too many event types. Too much risk. How can people combat these challenges through simplifying instead of complicating?
Meaningful progress may have been challenging in the past, but today’s leading market practitioners are leveraging a range of innovative market solutions to forge a new operating model that consolidates information sourcing, removes duplicative verification layers and accelerates notifications to beneficial owners.
By combining ASX’s Real Time Corporate Actions service and DataSphere platform, Australian participants are now able to source almost all of the data that they need in a golden copy, industry-standard mechanism.
In data we trust...
Australian market participants may vary in their understanding of their current challenges, but the market is strongly consistent on two core points: corporate actions are a data problem and the Exchange is the trusted partner to help resolve it.
Over the next three years, 48% of the market plans to revise their data sourcing – focusing specifically on new data feeds. That these plans come higher in the order of priority than hiring and deploying robotics shows that investors and their intermediaries are all focused on a single, common objective: getting the data right.
And who do they trust to get that data right? Of the many data providers across the market, respondents cited ASX as the most trusted provider of actionable corporate action data in Australia, making it the natural partner of choice for all profiles of institution as they set out to optimise their data flows.
Golden copy reliability and full scalability
ASX’s Real Time Corporate Actions service now provides a range of corporate event information to subscribers in the exact way that it was sourced from corporate issuers - without manipulation or data corruption.
As a ‘golden copy’ data source, this new feed is intended to provide all market participants with the surety of a single source of record by removing any potential for information distortion. “If they are wrong, then the issuer is wrong and we’re all wrong”.
In addition, the feed’s ISO 20022 format has delivered major efficiencies in the delivery and processing of complex corporate events. Based on a scalable XML model, the new data standard is ‘self-describing’ and extendable, meaning that individual messages can scale easily to include highly complex event optionality, within a machine-readable format.
...accelerating customer notifications
As a single source of truth, delivered in an entirely machine-readable format, the Real Time Corporate Actions service addresses many of the core problems of the Australian market. It is broad enough to automate coverage of almost all event types in a single service. It can scale to include detailed information on tax details and optionality. And it is comprehensive, negating the need for corporate action research teams to spend hours sourcing and validating data manually through a myriad of registry websites.
In removing all of this complexity and manual processing, the Service also significantly increases the velocity of customer event notifications. Where it may have taken custodians up to four hours to notify their customers of new events in the past, investors can now be made aware of new events within two minutes.
"We’re seeing more than an 80% increase in STP rates from using the new ASX corporate action feed"
(Mark Wootton, Head of Custody Product for Asia-Pacific, BNP Paribas)
Simplification is now
After decades of adding duplicative processes, custodians and brokers in Australia are now leveraging the benefits of reliability and scalability to radically simplify their corporate action models – removing cost, time and risk from today’s processes.
Without concerns over data quality and variance, custodians are now beginning to decommission entire teams by removing duplicative layers from their corporate action processes – particularly between local/sub- and global custodians.
And by removing this duplication they are not only reducing costs – they are improving timeliness, reducing operational risk and lowering exposures to people-risk.
“We couldn’t even measure the time lag of a corporate action before”
(Global Custodian)
Unforeseen benefits
Early adopters of ASX's Real Time Corporate Actions Service are also discovering new, unforeseen benefits too.
Historically it has been almost impossible to measure the efficacy and timeliness of a corporate action announcement (from issuer to investor), due to the lack of reliable time-stamps indicating the time of release from the issuer.
Today, the time-stamping available through the service is enabling firms to measure the latency of their event notifications at every step of the process – supporting both continuous improvement initiatives (within their firms) and more sophisticated and value-adding customer conversations.
If you would like to learn more from ASX about how the Real Time Corporate Actions Service can simplify your operations then please reach out!