An Australian Securities & Investments Commission (ASIC) report has revealed areas where corporate actions processing represents significant operational risk, according to DST Global Solutions, an investment management software technology and services provider.
The ASIC report highlighted nine areas where corporate actions processing represents significant operational risk. These included: extensive manual processing throughout the industry and associated timeline pressures to communicate notifications and instructions; opportunities for fraud arising from the use of faxed ‘authorised instructions’; issues in identifying the effect of a corporate action; and the lack of audit.
“The timing of this report could not be better, as it highlights the importance of best practice solutions to safeguard Australian investors’ $1.82 trillion of assets held by custodians,” said Philip Hogan, DST Global Solutions’s managing director in the Asia-Pacific region. “Its findings support the need for custodians and their clients to adopt streamlined straight through processing (STP), and highlights the requirement for improved procedures to handle corporate actions activities.”
DST Global Solutions recently agreed a strategic alliance with XSP, an end-to-end corporate actions solution provider.
Geoff Harries, the global head of asset servicing at DST Global Solutions, said: “The close working relationship we now have with XSP is very important as it enables us to take corporate actions processing to the next level with mobile technology, to further reduce the operational risk in the linkage from decision makers on the move to the operations staff and finally to instruct the custodians that support them.”
“Corporate actions events are growing exponentially in both volume and complexity,” said Brendan Farrell, Jr, the CEO of XSP. “For years, XSP has been working closely with Australian corporate actions experts to build a system that meets their unique requirements. The on-going development of XSP’s product suite coincides with the emerging technologies—mobility, cloud computing and social collaboration—driving the markets.”
“Harnessing the power of our corporate actions automation solutions with the strength of the DST Global Solutions HiPortfolio offering enables strategic and sustainable business outcomes that provide greater STP while helping to reduce operational risk. The ASIC report further supports the need for automation in this region.”
