Revamping Corporate Actions

Dividend payments, stock splits, name changes, spin-offs and other corporate actions impacting securities already held in accounts were not supposed to be affected by T+1. But as the deadline for shortening the trade settlement cycle is challenging firms to further automate all aspects of their business, semi-manual and sometimes disjointed corporate actions systems are getting a second look.

"We’ve all been exposed to these huge, huge risks for years," says Martin Pearce, senior vice president and director of investment operations at Boston-based MFS Institutional Advisors. "We’ve just accepted it because there have been no other options."

So much risk exists because corporate actions processing is complex, requiring multiple steps of messaging back and forth with shareholders, important decision-making and portfolio accounting. At most firms, this process is almost entirely

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T+1: complacency before the storm?

This paper, created by WatersTechnology in association with Gresham Technologies, outlines what the move to T+1 (next-day settlement) of broker/dealer-executed trades in the US and Canadian markets means for buy-side and sell-side firms

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