Mitigating Operational Risk

Global mergers and acquisitions, as well as increases in cross-border holdings of securities where securities may be listed on multiple exchanges and settled in multiple locations, have added to the volumes and complexities of corporate actions. DTCC defines operational risk as two types of risk:

  • back-office processing risk ,which consists of losses resulting from mishandling a single, complex corporate action event;
  • and front-office trading risk, where a failure to act on information may lead to sub-optimal trading decisions.

Operations departments are increasingly challenged to deal with these risks. How many firms have "missed" a fax? Or incorrectly processed a corporate action notification or instruction?

Corporate actions processing is fraught with risks and inefficiencies. Firms are managing operational risk by focusing on straight through processing ("STP") for trade processing, covering post trade from execution to settlement, including corporate actions processing. Eliminating this manually-intensive process in favor of an automated corporate actions workflow can bring substantial benefits, among them risk reduction, resource re-allocation and productivity increases, all of which can result in profit gains.

If you are looking to improve the efficiency of your corporate actions processing, start at the beginning – ensure the integrity of your market data. With more than 20 years of business experience, combined with our network of supplier relationships, SS&C's SVC™ securities data division consolidates information from leading global sources to deliver a single customized feed. Our position as a single source data provider eliminates unnecessary costs associated with multiple vendor feeds.

With SVC, you can enhance your pricing requirements and include corporate actions to successfully manage securities in your portfolios. SVC's coverage includes, but is not limited to:

  • Stock splits
  • Name changes
  • Symbol and CUSIP changes
  • Spin-offs
  • Suspensions
  • Re-instatements
  • De-listings
  • Mergers/acquisitions
  • Reorganizations