Changing the corporate actions landscape
01 Nov 2023
Celebrating its tenth year in the business, T-Scape has gone from strength to strength since it was established in 2013. Managing director David Baxter talks to Jenna Lomax about how the company has developed over the last decade and what more is to come
Image: Asset Servicing Times
T-Scape is a UK-based, privately-owned financial technology company, providing the market with corporate action and regulatory compliance solutions.
David Baxter, joint owner and managing director of the company, takes this particular opportunity with Asset Servicing Times, to talk about T-Scape’s 10-year journey, outline the services it provides and discuss its flagship product iActs. He also touches upon some of the hurdles currently facing the corporate actions industry and how he thinks they may be overcome.
Returning to the start and explaining how T-Scape came to be, Baxter outlines: “Back in 2013, we felt there was a gap in the market with regard to corporate action processing on the buy-side, particularly with respect to asset management and wealth management firms. At that time, the corporate action industry had consolidated to a point where very few corporate action solutions actually remained on offer to the market. Those that did seemed to give very little thought to creating a product that ran seamlessly between the front and back offices. Throw in the fact that many of these systems had started life shortly after the introduction of ISO 15022 in 1999, we concluded that the time was right to bring a new system to market.
“We had a lot of experience in and around corporate actions, including working with some of those remaining solutions, and though we knew we would be starting from scratch, we thought we could provide a much better alternative — a solution unburdened by legacy code and one designed with the needs of the buy-side in mind.”
T-Scape’s flagship product is iActs, which was initially developed to support the key corporate action processes. It has now evolved to support iActs VM (Vote Manager) and iActs SID (Shareholder Identification Disclosure), both of which help deliver Shareholder Rights Directive (SRD) II compliance.
“Our story didn’t really get going until the release of iActs Version 1 in 2016,” explains Baxter. However, its success paved the way for what was to come. As well as opening the door for the front office to engage in the processing of corporate actions, its success resulted in further iterations catering to all aspects of the corporate action process.
Baxter adds: “Since then, it’s gone on to support SRD II through iActs VM and SID, and we are also about to introduce iActs L-Amend to aid the internal processing of loan amendments within the syndicated bank loan space.”
iActs Corporate Actions
iActs Corporate Actions, or iActs for short, is an application developed to support the processing of corporate actions from receipt of announcement messages, through the gathering of elections and dispatch of instructions, to the calculation and posting of entitlements to internal systems.
Baxter asserts: “It was initially developed to provide a window through which portfolio managers, traders and others in the front office of buy-side organisations could view corporate actions and act on those requiring attention, namely elective corporate actions.
“[This window] de-risked an operation that was dependent upon e-mail and manual re-key and provided the transparency that the front office didn’t have. We knew from the start that if iActs was going to be a success we’d need to get buy-in from the front office. The key to that was user experience.
“Having started my career in the city, working in the fund management world, I knew that we’d need to provide a very good user experience to get that buy-in. As such, we spent a lot of time working through every aspect of those front-office requirements, not just the ‘needs’ but also the ’wants’. The biggest front-office usage is by a European client of ours, which has approximately 400 portfolio managers digitally engaging with the operations team through iActs. Feedback has only ever been positive.”
Another key aspect to iActs useability was the introduction of visual indication and alerts, rather than the more typical exception-create model, “to bring those things requiring attention to the user as and when required,” says Baxter.
“When we began our venture, we were aware that corporate action solutions were largely built around the creation of exceptions. These exceptions actually became processing items themselves and had the effect of increasing workloads. We felt that through the use of filtering, in combination with visual alerting techniques such as red, amber, green (RAG) indication, we could achieve the same without increasing workloads.”
When asked how iActs differs from its competition, Baxter outlines: “If I were to pick a few things, I’d look at useability and how that’s enabled us to provide the seamless integration between front and back offices. We’ve spent a lot of time ensuring that we provide the best user experience we can over the years. In fact, we are currently reviewing our user experience again as we build out iActs Version 3.
“iActs is a relatively young application in comparison to most, if not all of its contemporaries, some of which would have started life some 20 or so years ago, with the advent of ISO 15022. Housing legacy technology is a real danger and becomes limiting for the provider, in terms of their ability to adapt and evolve products.”
Baxter adds: “What you might see is the introduction of new code being ‘bolted’ on to extend the life of the legacy system. This can introduce new problems for the solution provider with respect to ongoing support and maintenance, compatibility between systems and the upgrading of each. Inevitably this will add financial cost which in all likelihood will be passed back to the client. As a double whammy for clients, lead-times will likely increase. This means longer waiting times for issues to be fixed, enhancements to be made, and new features to be added.”
“iActs has previously been brought in to replace legacy and also competed successfully to win business against solutions of this type. So, legacy is something we are very well aware of, and as such, we regularly review our technology and are not afraid to change things if necessary. iActs Version 3 is testament to that.
“When we tell potential clients that they’ll be future-proofed with iActs, we really do mean it.”
Overcoming the hurdles
Discussing other industry frustrations, and what major changes have been made in the industry, particularly in the area of corporate actions, Baxter is frank. He asserts: “I would like to say there’s been a monumental shift, and the processing of corporate actions has moved on in leaps and bounds, but I can’t.”
He adds: “The same problems that existed then exist now, such as the misuse or misinterpretation of standards, not just ISO 15022 but now ISO 20022 also. There’s also a large group of players, like issuers, that remain outside — or at best at the periphery — of the corporate actions’ ecosystem.Additionally, automation is high in places but low in others. And one thing that’s particularly disappointing is that so-called ‘innovations’ tend to be old ideas, just repackaged by different factions with the latest fashion accessory. Client services also seem to be a little lacking. It’s as though good service has become the exception rather than the rule.”
Baxter surmises that the first stepping stone to overall improvement would be to “expand the corporate action market, so that all organisations actively involved in the process can benefit from the existing infrastructure we have in place.” There will be barriers to overcome, he adds, but these need to be addressed for the improvement of the market overall.
“I’d certainly be pushing for issuer engagement through digital means — get this right and the benefits to the market would be telling,” Baxter goes on to say. “We’ve been talking about this for years but the will just doesn’t seem to be there with respect to those who could make this happen. Given corporate actions is an issuer-driven market, surely if we provided them with a platform through which they could begin the process, the efficiency gains across the market as a whole would be huge. New opportunities would arise, and the corporate action ecosystem really would become all inclusive.”
“Of course, we have AI, distributed ledger technology and other innovations available that could be used to go forward. But for now, I’d focus on the infrastructure we have in place, and growing the corporate action market for all to benefit.”
iActs SID (Shareholder Identification Disclosure) & iActs VM (Vote Manager)
Among T-Scape’s products sits iActs SID and iActs VM. iActs SID enables an organisation in receipt of a shareholder disclosure request, to begin the response process immediately, in compliance with SRD II. iActs SID validates and disseminates the request, extracting key information, and pulls the relevant shareholder positions — often working to stipulated thresholds. It offers these to the user for review, before translating the information into a prepared format for dispatch back to the issuer appointed agent.
“The primary client concern is the speed of response, given that the directive stipulates an expected 24-hour turnaround,” explains Baxter. “With iActs SID, responses can be readily available for dispatch within minutes.”
iActs Vote Manager works in a similar fashion to corporate actions, with meeting announcements being interpreted, key information (such as deadlines) stored, and position information retrieved. This data is then presented to front-office users for them to vote on resolutions before these are instructed to the relevant receiving agent.
“Both iActs components —SID and VM — not only help organisations achieve SRD II compliance but have significantly improved and simplified the processing of votes and disclosures,” affirms Baxter. “One user of SID mentioned the system was so easy to use he thought he was doing something wrong. User experience is key!”
Plans for the future
Discussing the last 10 years, Baxter says: “It’s interesting looking back to when we started our journey, compared to where we are now; I do so with pride. Through self-funding and no outside investment, we’ve managed to develop the company organically. I’m not sure just how easy that would be if we were starting out today. The last five years in particular have been intense. During this time, we’ve completed a restructuring of the company, we have upgraded our development and client services team, delivered iActs Version 2 across our client base and developed three new products in the process. Most of this, of course, ran parallel to our navigation of an unprecedented global event.”
Baxter affirms that these challenges enabled T-Scape “to establish the right conditions for the company’s future growth.” In the coming months, Baxter says the company will be focused on the continued development of iActs Version 3 and the launch of iActs L-Amend.
With regard to the latter, he confirms: “It’s a new market for us, but one within which we think iActs will add significant value. Importantly, it’s the first application to be developed on the iActs Version 3 platform and has laid the foundations for the migration of iActs Vote Manager, iActs Corporate Actions and iActs SID as we move into 2024.
“As you can imagine, we’re really excited about bringing new features and functionality to these applications to further improve processes and user experience. 2023 has been our best year to date, but none of it could have been achieved without our clients who we will continue to serve with a level of quality that we hope is second to none. A big thank you to them.”
When asked if there is anything else Baxter wishes to convey to the reader, he concludes: “For those with an interest in any of the iActs suite of products, please get in touch. We’d be happy to provide demonstrations of our products.
“It’s a really exciting time to be part of the T-Scape world.”.
David Baxter, joint owner and managing director of the company, takes this particular opportunity with Asset Servicing Times, to talk about T-Scape’s 10-year journey, outline the services it provides and discuss its flagship product iActs. He also touches upon some of the hurdles currently facing the corporate actions industry and how he thinks they may be overcome.
Returning to the start and explaining how T-Scape came to be, Baxter outlines: “Back in 2013, we felt there was a gap in the market with regard to corporate action processing on the buy-side, particularly with respect to asset management and wealth management firms. At that time, the corporate action industry had consolidated to a point where very few corporate action solutions actually remained on offer to the market. Those that did seemed to give very little thought to creating a product that ran seamlessly between the front and back offices. Throw in the fact that many of these systems had started life shortly after the introduction of ISO 15022 in 1999, we concluded that the time was right to bring a new system to market.
“We had a lot of experience in and around corporate actions, including working with some of those remaining solutions, and though we knew we would be starting from scratch, we thought we could provide a much better alternative — a solution unburdened by legacy code and one designed with the needs of the buy-side in mind.”
T-Scape’s flagship product is iActs, which was initially developed to support the key corporate action processes. It has now evolved to support iActs VM (Vote Manager) and iActs SID (Shareholder Identification Disclosure), both of which help deliver Shareholder Rights Directive (SRD) II compliance.
“Our story didn’t really get going until the release of iActs Version 1 in 2016,” explains Baxter. However, its success paved the way for what was to come. As well as opening the door for the front office to engage in the processing of corporate actions, its success resulted in further iterations catering to all aspects of the corporate action process.
Baxter adds: “Since then, it’s gone on to support SRD II through iActs VM and SID, and we are also about to introduce iActs L-Amend to aid the internal processing of loan amendments within the syndicated bank loan space.”
iActs Corporate Actions
iActs Corporate Actions, or iActs for short, is an application developed to support the processing of corporate actions from receipt of announcement messages, through the gathering of elections and dispatch of instructions, to the calculation and posting of entitlements to internal systems.
Baxter asserts: “It was initially developed to provide a window through which portfolio managers, traders and others in the front office of buy-side organisations could view corporate actions and act on those requiring attention, namely elective corporate actions.
“[This window] de-risked an operation that was dependent upon e-mail and manual re-key and provided the transparency that the front office didn’t have. We knew from the start that if iActs was going to be a success we’d need to get buy-in from the front office. The key to that was user experience.
“Having started my career in the city, working in the fund management world, I knew that we’d need to provide a very good user experience to get that buy-in. As such, we spent a lot of time working through every aspect of those front-office requirements, not just the ‘needs’ but also the ’wants’. The biggest front-office usage is by a European client of ours, which has approximately 400 portfolio managers digitally engaging with the operations team through iActs. Feedback has only ever been positive.”
Another key aspect to iActs useability was the introduction of visual indication and alerts, rather than the more typical exception-create model, “to bring those things requiring attention to the user as and when required,” says Baxter.
“When we began our venture, we were aware that corporate action solutions were largely built around the creation of exceptions. These exceptions actually became processing items themselves and had the effect of increasing workloads. We felt that through the use of filtering, in combination with visual alerting techniques such as red, amber, green (RAG) indication, we could achieve the same without increasing workloads.”
When asked how iActs differs from its competition, Baxter outlines: “If I were to pick a few things, I’d look at useability and how that’s enabled us to provide the seamless integration between front and back offices. We’ve spent a lot of time ensuring that we provide the best user experience we can over the years. In fact, we are currently reviewing our user experience again as we build out iActs Version 3.
“iActs is a relatively young application in comparison to most, if not all of its contemporaries, some of which would have started life some 20 or so years ago, with the advent of ISO 15022. Housing legacy technology is a real danger and becomes limiting for the provider, in terms of their ability to adapt and evolve products.”
Baxter adds: “What you might see is the introduction of new code being ‘bolted’ on to extend the life of the legacy system. This can introduce new problems for the solution provider with respect to ongoing support and maintenance, compatibility between systems and the upgrading of each. Inevitably this will add financial cost which in all likelihood will be passed back to the client. As a double whammy for clients, lead-times will likely increase. This means longer waiting times for issues to be fixed, enhancements to be made, and new features to be added.”
“iActs has previously been brought in to replace legacy and also competed successfully to win business against solutions of this type. So, legacy is something we are very well aware of, and as such, we regularly review our technology and are not afraid to change things if necessary. iActs Version 3 is testament to that.
“When we tell potential clients that they’ll be future-proofed with iActs, we really do mean it.”
Overcoming the hurdles
Discussing other industry frustrations, and what major changes have been made in the industry, particularly in the area of corporate actions, Baxter is frank. He asserts: “I would like to say there’s been a monumental shift, and the processing of corporate actions has moved on in leaps and bounds, but I can’t.”
He adds: “The same problems that existed then exist now, such as the misuse or misinterpretation of standards, not just ISO 15022 but now ISO 20022 also. There’s also a large group of players, like issuers, that remain outside — or at best at the periphery — of the corporate actions’ ecosystem.Additionally, automation is high in places but low in others. And one thing that’s particularly disappointing is that so-called ‘innovations’ tend to be old ideas, just repackaged by different factions with the latest fashion accessory. Client services also seem to be a little lacking. It’s as though good service has become the exception rather than the rule.”
Baxter surmises that the first stepping stone to overall improvement would be to “expand the corporate action market, so that all organisations actively involved in the process can benefit from the existing infrastructure we have in place.” There will be barriers to overcome, he adds, but these need to be addressed for the improvement of the market overall.
“I’d certainly be pushing for issuer engagement through digital means — get this right and the benefits to the market would be telling,” Baxter goes on to say. “We’ve been talking about this for years but the will just doesn’t seem to be there with respect to those who could make this happen. Given corporate actions is an issuer-driven market, surely if we provided them with a platform through which they could begin the process, the efficiency gains across the market as a whole would be huge. New opportunities would arise, and the corporate action ecosystem really would become all inclusive.”
“Of course, we have AI, distributed ledger technology and other innovations available that could be used to go forward. But for now, I’d focus on the infrastructure we have in place, and growing the corporate action market for all to benefit.”
iActs SID (Shareholder Identification Disclosure) & iActs VM (Vote Manager)
Among T-Scape’s products sits iActs SID and iActs VM. iActs SID enables an organisation in receipt of a shareholder disclosure request, to begin the response process immediately, in compliance with SRD II. iActs SID validates and disseminates the request, extracting key information, and pulls the relevant shareholder positions — often working to stipulated thresholds. It offers these to the user for review, before translating the information into a prepared format for dispatch back to the issuer appointed agent.
“The primary client concern is the speed of response, given that the directive stipulates an expected 24-hour turnaround,” explains Baxter. “With iActs SID, responses can be readily available for dispatch within minutes.”
iActs Vote Manager works in a similar fashion to corporate actions, with meeting announcements being interpreted, key information (such as deadlines) stored, and position information retrieved. This data is then presented to front-office users for them to vote on resolutions before these are instructed to the relevant receiving agent.
“Both iActs components —SID and VM — not only help organisations achieve SRD II compliance but have significantly improved and simplified the processing of votes and disclosures,” affirms Baxter. “One user of SID mentioned the system was so easy to use he thought he was doing something wrong. User experience is key!”
Plans for the future
Discussing the last 10 years, Baxter says: “It’s interesting looking back to when we started our journey, compared to where we are now; I do so with pride. Through self-funding and no outside investment, we’ve managed to develop the company organically. I’m not sure just how easy that would be if we were starting out today. The last five years in particular have been intense. During this time, we’ve completed a restructuring of the company, we have upgraded our development and client services team, delivered iActs Version 2 across our client base and developed three new products in the process. Most of this, of course, ran parallel to our navigation of an unprecedented global event.”
Baxter affirms that these challenges enabled T-Scape “to establish the right conditions for the company’s future growth.” In the coming months, Baxter says the company will be focused on the continued development of iActs Version 3 and the launch of iActs L-Amend.
With regard to the latter, he confirms: “It’s a new market for us, but one within which we think iActs will add significant value. Importantly, it’s the first application to be developed on the iActs Version 3 platform and has laid the foundations for the migration of iActs Vote Manager, iActs Corporate Actions and iActs SID as we move into 2024.
“As you can imagine, we’re really excited about bringing new features and functionality to these applications to further improve processes and user experience. 2023 has been our best year to date, but none of it could have been achieved without our clients who we will continue to serve with a level of quality that we hope is second to none. A big thank you to them.”
When asked if there is anything else Baxter wishes to convey to the reader, he concludes: “For those with an interest in any of the iActs suite of products, please get in touch. We’d be happy to provide demonstrations of our products.
“It’s a really exciting time to be part of the T-Scape world.”.
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