Australia’s corporate actions landscape offers a myriad of opportunities for issuers and investors, but it is also complex and ripe for change.

Against this backdrop, ASX is delighted to sponsor this industry-wide research to better understand the challenges of interpreting and processing corporate actions in Australia. In partnership with the ValueExchange, we surveyed C-suite executives, asset servicing professionals, risk managers and other key stakeholders to gain perspective on the opportunities for the industry.

Their responses paint a clear picture of the environment that Australian financial institutions face in managing the risks with corporate actions.

Australian corporate actions are unique

While the Australian model for corporate actions has proven effective in supporting the needs of issuers and investors over many years, it also presents some challenges to market participants in terms of complexity.

The number of events continues to increase with ASX publishing around 150,000 company announcements annually, within which there are just under 5,000 corporate actions, across 25 corporate action types.

Survey participants report that more than 46% of corporate actions data is still submitted manually; a task that can be time-consuming and prone to error. And in the current environment of increased corporate announcements and activity, manual submissions can pose a hurdle to a company’s ability to issue corporate actions promptly and efficiently service their end clients.

It is not surprising then, that Australian market participants report their handling of corporate actions data to be 25% less efficient than the global average.

Complexity costs the industry every day

Survey results indicate that the complexity in processing corporate actions data also comes with a cost. Some 61% of the companies we surveyed said they needed to hire more people this year to manage corporate actions via the current manual processes.

At the same time, companies indicate that they spend 5% more than the global average for consolidated market data feeds and use global data standards for only 13% of their messaging.

By adopting common messaging standards, companies can process and distribute data much more efficiently. Data is also less susceptible to errors associated with manual rekeying, thus improving its accuracy, quality and timeliness.

But market players are sceptical

While there is clearly a case for transforming this critical part of our industry, market participants are not overly optimistic. The majority of those we surveyed expect savings of only 2% to 3% from automating the processing of corporate actions data. This is considerably lower than the global average of up to 25% in expected savings in 2022.

The benefits are more compelling than they seem

However, as the statistical insights in this report show, the case for change is much more compelling than many might think.

Our findings show that Australian market participants that have automated their corporate actions data processing are paying 48% less for their data than those continuing to handle information manually. They also experience 17% fewer corporate action issues in their business.

To illustrate, ASX implemented a Corporate Actions Service using a phased approach, with final completion in June 2021. This service is designed to deliver data in real time using a global messaging standard. Based on initial evidence, we are pleased to say that the solution is delivering straight-through processing improvements of at least 80% to users.

We do this by sourcing information directly from issuers and standardising data formats, therefore eliminating the need for multiple layers of data sourcing and checking.

You trust us to drive change

Results show that exchanges are the most trusted providers of corporate actions data in our industry, scoring 10% higher than any other institution and putting them at the heart of offering a solution.

At ASX, we are driving the transformation of corporate actions data processing in Australia. We hope that through the statistical insights contained in this benchmarking report, you can join us in delivering needed change.