SWIFT has begun a trial project with seven securities companies in an effort to drive efficiencies in communicating significant corporate events.
The project will trial a solution powered by Symbiont’s enterprise blockchain platform, Assembly, to allow asset managers and custodians to automate how they compare corporate action information sent to them from multiple sources.
Automation of corporate action communications has improved in recent years, but it is still heavily dependent on manual processes that create both added costs and risks for market participants, says SWIFT.
This creates complexity for asset managers, custodians, brokers, and other recipients downstream, as they receive information about the same event from multiple issuers and, in some instances, with missing, contradictory, or inaccurate data.
At a sub-custody level, SWIFT’s trial could help providers distribute data in near real-time to global custody clients. According to SWIFT, this should enable information to be made available to asset managers in good time, allowing them to make trading decisions more quickly, while also leading to further back-office savings.
With more accurate corporate action information available, asset managers could also mitigate the risk of making investment errors, as well as avert serious losses or even fines, adds SWIFT.
The solution is currently in development with a pilot group of participants that are set to test it and provide feedback in September. Citi, Vanguard, and Northern Trust have been listed as some of the companies working with SWIFT on the project.
SWIFT has said it will compile the test results and share them with the community. If successful, the organisation says it will “look forward to extending coverage to more corporate event types, and will assess the potential to bring it to production for the wider SWIFT community”.
Tom Zschach, chief innovation officer at SWIFT, comments: “By bringing Symbiont’s Assembly and smart contracts together with SWIFT’s extensive network, we are able to automatically harmonise data from multiple sources of a corporate action event.
“This can lead to significant efficiencies. Corporate action data from SWIFT messages is translated by the SWIFT Translator and uploaded in Symbiont’s blockchain. Their smart contract technology can then compare information shared between participants and flag discrepancies, contradictions, or inconsistencies across custodians.”
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