SWIFT has announced plans to trial an enterprise blockchain platform to improve the communication of corporate actions.

The organisation is partnering with a number of security players, including American Century Investments, Citi, Vanguard, and Northern Trust to further automate the process of corporate actions via Symbiont’s propriety technology platform.

It said that when an event takes place at a publicly traded company, for example dividend payments, exchange offers, or mergers, the information needs to be quickly shared with investors, creditors, and other stakeholders.

SWIFT explained that while automation of these communications has improved in recent years, it is still “heavily dependent” on manual processes that create both added costs and risks.

The organisation added that the issue is worsened by the number of intermediaries, including central securities depositories (CSDs), local and global custodians, fund managers, and paying agents, which make up the investment chain.

SWIFT said that because each has to pass on information about the event and they follow different data standards, these intermediaries may communicate about it slightly differently.

“Major asset managers will have hundreds of custodian relationships, with assets and securities scattered across a wide range of counterparties,” says Jonathan Ehrenfeld, strategy director at SWIFT. “If there’s a corporate event, these asset managers and other intermediaries will receive information from all these sources, and this is where we start to see problems.”

Ehrenfeld added: “According to our analysis, manual activities – such as data cleansing, formatting and interpretation – account for around 30 per cent of the costs involved in processing corporate. That’s why we are collaborating with our community to deliver a solution that delivers accurate corporate action data to market participants in near real time.”

Share Story: