Corporate actions STP
Each year ASX listed entities (issuers) make more than 130,000 announcements to the market. The announcements include key information about the issuer and their securities, corporate actions and events. Corporate actions include events such as dividends, entitlement offers, reorganisations of capital and capital returns.
ASX and many market participants and intermediaries review this information and capture it in their own systems to facilitate event management, including for their own customers. Much of this work is manual, untimely and prone to error and risk.
In 2014, ASX introduced an enhanced corporate action notification service - developed by the ASX Corporate Actions STP project in consultation with regulators, issuers and information consumers including custodians, market participants and investors. The old and largely manual processes were replaced by straight through processing (STP), providing a more timely, informative and standardized notification service. Issuers are now mandated by the ASX Listing Rules to announce certain events to the market by completing new online ‘smart forms’. The smart forms have many features, including pre-population of known data and validation of issuer input to ensure the announcement is compliant with rules and standards. An equivalent PDF announcement is generated from the smart form and once this PDF is released to market, the data from the form is automatically captured in ASX systems. This creates or updates corporate action and related security records and provides STP to existing ASX reference data products and to the real-time ISO 20022 notification service. A rich and accurate ISO 20022 format notification direct from the source is now delivered to a customer within seconds of the announcement to market.
The implementation of this solution has been phased, with final completion in June 2021:
Phase 1 – 2014: introduction of online forms for the announcement of Dividends, Interest Payments, Consolidations/Splits and Cash Return of Capital with full STP. Equivalent ISO 20022 format notifications were also introduced. This phase covered about 70% of corporate action event volume.
Phase 2 – has been delivered in three releases from 2019 to 2021, with corresponding changes to ASX Listing Rules and Appendices:
- December 2019: ASX started introducing additional online forms to replace the old Appendix 3B.
- July 2020: ASX upgraded the ISO 20022 notification service to a newer version and included notifications for all events supported by ASX at that time. All notifications are based on the same version of the ISO 20022 base message, with a prescribed message specification per corporate action event type. A number of the existing online forms were also updated.
- June 2021: The final release introduced four additional online forms for issuer’s announcement of certain events. Three of these online forms are focused on capital issues or capital changes, including the Appendix 2A – application for quotation of securities, Appendix 3G – Notification of issue, conversion or payment up of unquoted equity securities, and Appendix 3H – Notification of cessation of securities. ASX has also introduced a new Appendix 3C for the Notification of buy-back in online form format, replacing the previous four-word forms used for buy-back announcements. An additional ISO 20022 corporate action event notification (OTHR) has also been implemented.
Benefits of online forms and STP
The Corporate Actions STP solution means that issuers benefit from improved workflows and improved compliance with the ASX Listing Rules through the presentation of only relevant information and questions and in-form validation.
Investors receive issuer data more quickly, in a standardized and more comprehensive format, enabling more informed and timely investment decisions.
Custodians, participants and information providers benefit from a timely and internationally standardized notification service to allow STP on their own part to improve their own back office processing and service to their own customers. The STP capability allows seamless event capture and management even during high volume announcement periods.
More information on the product service and notification formats for market information subscribers is provided in the following section.
Implementation material for Market Information Subscribers
- ReferencePoint ISO 20022 Real-Time Corporate Actions Manual v3.0
- ReferencePoint ISO 20022 Frequently Asked Questions v1.2
The ISO 20022 message specifications (or ‘usage guidelines’) have been published on the SWIFT MyStandards website, and details of how to access the usage guidelines is available below.
The ReferencePoint ISO 20022 Real-Time Corporate Actions service is available for subscribers via SWIFT or FTP.
Recent articles and publications
ASX talks about corporate action automation in the ISSA Newsletter May 2017
ASX talks about developing a straight through process for corporate actions in Australia in the Journal of Securities Operations & Custody July 2014