Client Focus - Corporate Actions
Client uses across the organization include portfolio administration and accounting functions; understanding and analysing risk exposure; helping to support investment strategy, trading operations and client notifications – throughout the corporate action lifecycle.
Money Management Firm
A corporate actions department at a large money management firm relied exclusively on its custodian for corporate actions announcements. Missed events were a daily occurrence, as either the information was untimely (days after) or they were missed entirely.
The money management firm subscribed to Interactive Data’s Corporate Actions service and with the help of an automated corporate actions feed, built a corporate actions exception reporting system that not only gave them more timely data, but also a tool to verify data. By utilizing Interactive Data’s Corporate Actions service, this investment management firm improved its processing efficiency and its ability to react to these time sensitive events.
Online Brokerage Firm
Major online brokerage firms can receive client inquires that are routed to regional help desk support teams. Inquiries may include requests for past and upcoming Income Payment events such as cash dividends. To address this, firms are looking for effective dates on payment rates, withholding tax and other details.
One way to address this issue is to provide their front-line support staff with direct access to Interactive Data’s Online Corporate Actions service. This can provide the client’s support personnel with direct access to the entire database of income payments through a web-based subscription.
By utilizing Interactive Data’s Online Corporate Actions service, client support staff can research and answer client inquiries while the clients are on the phone, and provide a high-quality level of service. This can help contribute to reduced call times and the need to enlist the assistance of additional corporate action specialists.
Brokerage firms often need to alert their registered representatives in advance when securities in their client’s portfolio are going to be impacted by certain corporate action events, such as a specific bond issue that is to be retired due to redemption.
A brokerage firm can utilize the portfolio tracking capabilities in Interactive Data’s Corporate Actions service to establish dedicated portfolios for each broker and enable them to track their positions. Interactive Data’s portfolio tracking capabilities generate daily email alerts that are emailed directly to the broker which allows them to track positions that will be cashed out due to bond redemptions.
By using these portfolio tracking capabilities, a brokerage firm can create broker specific portfolio holdings and send critical called bond notices directly to the responsible broker. This can provide them with a timely service of critical information concerning the availability of money that could be invested on behalf of their clients.
Brokerage firms need to confirm the adjusted cost basis for securities in client accounts that had been transferred to them from another broker. Firms estimate that it took about 20 minutes per account to manually derive the cost basis for a single security, with the estimate jumping to over an hour when reinvested dividends were factored in.
A brokerage firm’s customer accounts group can utilize Interactive Data’s Cost Basis service to automate key processes that can help minimize the time and expenses related to calculating cost basis in connection with these account transfers. In many instances, this service can generate a cost basis calculation in a matter of seconds.
Client advisory help desks that are responsible for aiding financial advisors in researching their clients’ adjusted shares and cost basis account information, can be inundated with calls and e-mail, especially during tax season. The manual research time required for these inquiries can be significant, especially for complicated issues.
By utilizing Interactive Data’s Cost Basis calculator, brokerage firms can assist their registered representatives with these complex and time consuming issues. This service can help institutions provide a higher level of customer service and reduce the need to hire additional support staff to research and calculate cost basis. The Cost Basis calculator has research functionality and data built in, and can generate a calculation in a matter of seconds.
If a global custodian does not effectively track securities class action litigation, they could be missing the opportunity to claim additional funds. Without an automated service, an institution would likely need to dedicate additional full-time employees and a significant amount of IT expertise to identify and track class action litigation on behalf of its clients.
The Interactive Data Class Actions service can provide data, tracking tools and the actual Claim Forms to institutions so that a firm could identify qualified holders, track the litigation, and ultimately file to claim funds on behalf of its client. Not only can this potentially save resources and expenses, but it may also improve the firm’s ability to recover money on behalf of its clients.
The Evolving Nature of Corporate Actions – contributed blog post by Charlie Price for the SWIFT Dialogue Website, March 2013