In an industry that thrives on efficiency, consistency, and regulation, corporate actions have long been a source of frustration. From mergers to liquidations, the management of corporate actions has often been chaotic, with numerous entities involved, each interpreting information in their own way.
At a recent session hosted by TURN, experts from various sectors gathered to discuss the current state of corporate actions and how the industry can move forward with a more streamlined and standardised approach. This session highlighted the importance of collaboration in tackling one of the most complex issues in asset management today.
Why Corporate Actions Matter
Corporate actions such as mergers, acquisitions, fund reconstructions, and other significant changes require timely notification and shareholder approval. These actions must be accurately communicated to various stakeholders, including asset managers, custodians, and platforms. However, the process is often manual, error-prone, and lacks uniformity, leading to unnecessary costs and risks.
According to industry experts, there are often significant gaps in how corporate actions are communicated, making it difficult for asset managers and custodians to carry out their roles effectively. As one expert pointed out, “The data can be misrepresented, leading to costly errors down the line.” This lack of standardisation not only causes operational inefficiencies but also exposes institutions to regulatory risks.
The Power of a Standardised Template
The industry’s key players are coming together to address this problem by advocating for a unified approach to corporate actions. TURN, a leader in operational blockchain solutions, is working to create an industry-wide template for corporate actions. By standardising the data points required for corporate actions, TURN hopes to reduce human error and improve the speed and accuracy of data processing.
The shift towards industry standardisation isn’t just about improving operational efficiency—it’s also about mitigating risk. By adopting a unified template, stakeholders will ensure that corporate actions are communicated in a consistent and transparent way. This approach will also help satisfy regulatory requirements, reducing the likelihood of penalties for firms that fail to comply.
Looking Ahead: What Needs to Be Done
The next steps involve getting all industry participants on board with this standardised approach. As experts at the session noted, “The key to success lies in collaboration.” The shift towards an industry-wide template will require active engagement from all parties, including asset managers, custodians, platforms, and regulatory bodies.
Industry leaders agreed that the key to overcoming the challenges of corporate actions is adopting a collaborative, technology-driven approach. “We need to leverage digital platforms and standards to simplify this process,” said one participant.
By creating a shared, open standard, the financial industry can significantly improve the management of corporate actions and ensure that this critical process remains transparent, timely, and efficient.