A corporate action is an event that produces a corporate restructuring, and, often, affects the value of the company’s securities. There are many types of corporate actions that can affect a security. Some of the most common include dividend and interest payments, voluntary tender offers, warrants, rights offers, corporate reorganizations, and redemption of municipal and corporate bonds.
DTC (within its Asset Services group) handles certain essential aspects of corporate action processing, many of which involve high-volume, complex activities. DTC works with issuers and their authorized agents to announce and process corporate actions in a timely and efficient manner, with heightened emphasis on risk reduction as the volume and complexity of corporate actions continues to increase.
DTC is currently undertaking a major initiative to re-engineer its technology and the way it handles corporate actions. These efforts will increase processing efficiencies, standardize corporate actions data and streamline the flow of information.
Another major innovation is the introduction of XBRL (eXtensible Business Reporting Language) technology, for corporate actions announcements. Using XBRL messages to electronically disseminate corporate actions data directly from issuers will greatly reduce the cost of corporate actions, while also reducing risk and expediting the distribution of announcements.