Breaking down technological and administrative silos to transform corporate actions

Overview

Navigating the complexity of corporate actions

Corporate actions – which encompass a wide range of brokerage operations functions including voluntary reorgs (i.e.: tenders, rights and warrants), dividends, stock splits, corporate reorganizations, and other critical events have a material impact on shareholder value - are increasingly prevalent in modern financial markets. According to the DTCC^[1], the workflows currently embedded within corporate actions result in over 3.7 million voluntary and mandatory event announcements in the U.S. every year—and that list keeps growing. Each of these requires major banks, broker-dealers, custodians, and other financial services organizations to ingest and interpret those announcements, notify advisors and investors of any material changes, facilitate prompt payments and portfolio reconciliation, and process transactions in near real-time.

By working with Broadridge, one of the world’s largest banks was able to:

• Consolidate all of those processes into a seamless, automated workflow
• Deliver a complete front-office election portal to back-office processing solution for dividends, coupons, and both mandatory and voluntary corporate actions events, while streamlining tax processing and reporting

Challenge

Who’s on first? Clunky infrastructure and growing regulatory demands made it tough to know the basics

Processing hundreds of thousands of corporate actions annually across a global network of millions of client portfolios, tens of thousands of advisors, and multiple lines of business, which had grown through years of acquisition, our client faced a tangled operational landscape. Under pressure from regulators and looming T+1 settlement cycles, the client struggled to answer the most basic questions:

• To whom do we owe money, and how much?
• Who owes us, and what information must be shared?
• When must information be disseminated across stakeholders?
• How do we coordinate processes across more than a dozen legacy systems housing fragmented data?

They needed help cutting through the clutter to streamline corporate actions and income processing workflows.

Solution

Partnering to find the path forward

The client knew they needed more than a software fix to address their complex infrastructure and the constantly changing variables involved in corporate actions event management processing. They needed a trusted and transformative partner with the ability to understand the intricacies of the corporate actions workflow, the technology capabilities to synthesize and integrate their disparate datasets and software platforms, and the vision to develop a scalable solution that would address their unique challenges today and in the future. Together, Broadridge and the client:

• Conducted a 10-month discovery period with detailed whiteboard sessions across business units to map existing workflows, identify friction points, and highlight gaps in processes and systems to map out a path to a more efficient and reliable solution
• Developed a total overhaul of corporate actions and income processing workflows
• Implemented the corporate actions and income processing solution to enable real-time, automated end-to-end processing for dividends, coupons, and both mandatory and voluntary corporate actions events globally across business units and books of business

Benefits

A single solution for seamless corporate actions management

Working together with our client, we were able to consolidate their disparate data sets using our single data ontology to bring a level of standardization and consistency to their corporate actions management process. Importantly, we were able to eliminate the problem of conflicting data coming from multiple different sources at different times, making it possible to communicate seamlessly with key stakeholders and create a golden record of every single event. Together, we were able to take a cumbersome, error-prone process and transform it into a fully automated solution, which has now become a technology Center of Excellence for the entire organization.

^{[1] Automating the Sourcing of Corporate Actions Announcements from  Agents and Issuers, DTCC, November 2023}