Euroclear is upgrading its corporate actions reporting service to provide clients with more complete and standardized reporting, improved ISO and Corporate Actions Joint Working Group (CAJWG) compliance and higher straight-through processing rates. The new service will be made available to network managers and custody operations personnel.
Testing of the upgrade will begin on Aug. 27 2012 and the enhanced service will be launched on Sept. 24 2012. MT564 corporate action notifications will involve a new reporting option for pending transactions, more information to be reported and a unique option identifier to be used. The MT565 Corporate Action Instruction and the MT 567 Corporate Action Processing Status Advice reports will see a unique option identifier being used.
MT564 Corporate Action Notification clients currently subscribe for reporting on corporate actions using the Custody ISO services subscription form. Via a grouping option, the current service enables clients, to receive grouped notifications per corporate action and per account and allows clients to receive notifications even if they do not have a holding in the security impacted by the corporate action.
Following the upgrades, clients will have the option to subscribe to a new holding and pending reporting option. By subscribing they will be notified when they have a pending transaction in a security impacted by an upcoming corporate action and with a settlement date before the record date. They will receive a notification at the end of the business day unless they already received a notification for that account.
The transaction types to be reported include transactions due to settle on a future date, failed transactions and unmatched transactions.
Today the option identifier Euroclear reports may change during the life cycle of the corporate action. If an option is removed by the issuer, Euroclear updates the identifiers of the remaining options. As from the upgrade launche, Euroclear will use the same option identifier throughout the full life cycle, including information reported in the corporate action instruction and the corporate action processing status advice.
A special report for non-euro direct cash payments will also be available as of the upgrade launch.
Euroclear spokesperson Martin Gregson says that giving clients the choice to receive corporate action information on securities they do not hold in their Euroclear account, provides a useful source of information for trading, underlying client and other purposes beyond the back office.
The upgrades will be available across Euroclear France, Euroclear Belgium and Euroclear Nederland.
(JDC)