Corporate actions overview
As the number and complexity of corporate action events increases, the quality of information and the flexibility of processes are ever more crucial in reducing risk and costs. Clearstream offers a complete package for corporate action processing, for voluntary, mandatory with options, and mandatory events.
Its measurable goals include:
- Same-day-as-market corporate action notification
- Same-day-as-market corporate action deadlines
- Same-day-as-receipt settlement of corporate action proceeds
- Industry-leading proactive support for corporate actions
- Easy access to timely, relevant, reliable and complete information.
Clearstream settles mandatory corporate action events, such as the allocation of rights and exchange of shares, and voluntary corporate action events, like tender offers. It generally settles transactions where the securities are traded 'cum' (with a claim such as a coupon), and delivered 'ex' (without a claim).
Customers are alerted to forthcoming AGMs/EGMs and can benefit from proxy voting services, such as the exercise of voting rights. Using the SWIFT MT564 service, customers can also issue instructions in the event of voluntary corporate action events, or they can buy and sell subscription rights through Clearstream.
Minimising operational risk
Clearstream has developed numerous ways to help minimise customer risk. Control measures, such as our online connectivity platforms Xact Web Portal, CreationOnline and CASCADE, ensure end-to-end efficiency and effectiveness for the management of corporate action reporting and instruction. By using our connectivity channels your instructions are fully formatted to match our notifications.
Clearstream’s custody system supports full adherence to SWIFT’s ISO 15022 standards. This allows increased straight-through processing on many corporate action events, saving time and significantly reducing risk by removing inefficiencies.
Because the accuracy of data sources is critical for the quality of our service, we have invested heavily in our reference data processes. Automated data-gathering and the implementation of our cleansing and scrubbing tool enable us to transform comprehensive, high-quality securities reference data into an enriched, reliable ‘golden copy’ for our clients’ use.
Other control measures include the ‘four-eyes principle’ performed by our controllers, dedicated quality and risk managers in all our operational centres, and vigilant spot checking. We also produce reference material, fact sheets and procedure guidelines for all events to ensure customers are fully aware of the process.