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Standards and market practice (including XBRL) – how far have we got and what’s next? CorpActions 2011 Glazier’s Hall - London Max Mansur 5 July 2011.

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Presentation on theme: "Standards and market practice (including XBRL) – how far have we got and what’s next? CorpActions 2011 Glazier’s Hall - London Max Mansur 5 July 2011."— Presentation transcript:

1 Standards and market practice (including XBRL) – how far have we got and what’s next? CorpActions 2011 Glazier’s Hall - London Max Mansur 5 July 2011

2 Presentation title – dd month yyyy – Confidentiality: xxx2 Agenda XBRL Taxonomy for Corporate Actions has been released – what is the potential for EU markets? How is XBRL being implemented for Depositary Receipts – status of the Pilot? What is XBRL’s relationship with ISO 20022? With ISO 15022? How is SMPG market practice injected into XBRL? How does an XBRL tagging tool support the issuer? How can the result be consumed by the industry? How does this help the investment side?

3 Distance between Issuer and Investor ISSUER INVESTOR LAWYERS, ADVISORS, LEAD MANAGERS, REGISTRARS, TRANSFER/FILING/INFORMATION/PUBLICATION AGENTS REGULATORS, SHARE REGISTER, ANALYTICS COMPANY CENTRAL DEPOSITORY, CUSTODIANS, SUB-CUSTODIANS, GLOBAL CUSTODIANS, BROKER-DEALERS FUND MANAGERS, FUND ADVISORS, INVESTMENT MANAGEMENT INSTITUTION, OFFSHORE INVESTORS EXCHANGE, WIRE SERVICES, REFERENCE & TRADING DATA SERVICES

4 Any tolerances to consider? 4 Issuer/ agent Data Vendor Y Depository Regulator Exchange Data provider X Custodian A Custodian B Custodian C IM/AM ELECTRONIC versus PAPER NO STANDARDS SCRUBBING > REDUNDANT SCRUBBING > REKEYING OF DATA NO SINGLE SOURCE SCRUBBING (YET AGAIN) REPEAT PROCESS FOR EACH CHANGE MULTIPLE INTERPRETATIONS MANUAL ENTRY = DELAYS & RISK SCRUBBING NO COMMON IDENTIFIER SCRUBBING Corporate Actions – problems and source WFE WC Issuers & CA – 21 March 2011 – Confidentiality: Public Downstream Upstream 4

5 Corporate Actions Landscape - standardization Issuer Institutional Investor Data Providers Investment & Funds Mgrs B/Ds Shareholders’ Meeting Tabulator / Agent Registrar Exchange Global Custodians CSD Publication / Info Agent Proxy Agent Transfer Agent Retail Investor Regulator Sub- Custodians Tax Authority Courts cross-border Proprietary, ISO potential High: ISO financial stds None - XBRL potential Unlikely – Retail services Mixed: ISO, portal, proprietary

6 Sub-custodians in Asset Servicing Landscape Little High XBRL potential Unlikely Low Issuer Data Providers B/Ds Shareholders’ Meeting Tabulator / Agent Registrar Exchange Sub- Custodians CSD Publication / Info Agent Proxy Agent Transfer Agent Regulator Tax Authority Courts cross-border 6 Institutional Investor Investment & Funds Mgrs Retail Investor Global Custodians XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public

7 What is XBRL e X tensible B usiness R eporting L anguage =XML based =A technology to code & bring meaning to documents =Allows to tag data with specific definitions =meta-data =« information about information » =tags are unique for each concept & organized in a taxonomy =data dictionary =eg US GAAP, IFRS, ISO corporate actions, … =Non-proprietary, open source standard 7XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public

8 The XBRL approach (all domains) 8 XBRL Standard XBRL TAXONOMY (data dictionary, metadata) BUSINESS STANDARDS Business Reports Business Facts INTERPRETATION = XBRL Instance Features: machine readable, structured, comparable, analyzable, consistent, verifiable, usable data Examples: IFRS, US GAAP, JP GAAP UK HMRS, FDIC XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public

9 XBRL – Where Used? Corporate Actions opportunity? 9 XBRL in use for gov’t or financial reporting XBRL CA leading or committed Active in CA Market Practice & Standards Potentially considering Issuer to Investor: Corporate Actions DTCC, SWIFT, XBRL US Corporate Actions: Shanghai & Shenzhen Stock Exchanges, XBRL CA emerging interest XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public UK: HM Revenue & Customs, Companies House EU: Basel II Compliance, EBA for FINREP/COREP XBRL reporting in Belgium, Ireland, France, Spain, Italy, Poland, Denmark, Germany, France, Portugal, etc. US GAAP SEC mandated; FDIC; Proxy; Mutual Funds Ongoing global revolution in financial reporting standardization with systemic disambiguation and transparency… …disguised as XBRL adoption

10 Companies Incorporating XBRL (XBRL US)

11 Corporate Actions Taxonomy Structure XBRL Corporate Actions Dictionary Industry Accepted Event Templates SWIFT Data Dictionary Modeling Business Concepts XBRL Corporate Action Taxonomy

12 SMPG’s EIG to drive the template Presentation title – dd month yyyy – Confidentiality: xxx12 Corporate Action Event GLOBAL GRID Short Description Definition / comments CAEVCAMV1 or 2 eventwith(out) intermediate securities CAMVCAOPDatePeriodRatePriceDefiniti on / comme nts Cash Dividend Definition "Distribution of cash to shareholders, in proportion to their equity holding. Ordinary dividends are recurring and regular. Shareholder must take cash and may be offered a choice of currency" DVCAMAND CASHXDTE [M] EARL [O] VALU [O] PAYD [M] RDTE [M] GRSS [M] NETT [O] Where a currency choice is offered CHOS CASHXDTE [M] EARL [O] VALU [O] MKDT [O] RDDT [O] PAYD [M] RDTE [M] GRSS [M] NETT [O] EXCH [O]

13 Local Issuer Central Securities Depository Registrar / Transfer Agent Stock Exchange Custodian ADR Depositary Market of Issuer Local Custodian CSD (DTCC) GlobeTax DTCC Website NYSE/NASDAQ FINRA SEC EDGAR Website ADR Investor ADR Website DTCC ISO msg = = Tax Treatment Target Flow for XBRL CA for American Depositary Receipts (ADR) Tax Treatment Exchange Website Manual Input = MX XBRL Data Instance = Other Recipients = PDF Announcement 13 XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public Ex-date?

14 ISO Corporate Actions Messages 14 MX IdentifierProposed ISO Messages Names Abbreviated Name Equivalent ISO Messages 1seev Corporate Action NotificationCANOMT564 2seev Corporate Action InstructionCAINMT565 3seev Corporate Action Movement ConfirmationCACOMT566 4seev Corporate Action Movement Reversal AdviceCAREMT566 5seev Corporate Action Cancellation AdviceCACNMT564 6seev Corporate Action Instruction Cancellation RequestCAICMT565 7seev Corporate Action Event Processing Status AdviceCAPSMT567 8seev Corporate Action Instruction Status AdviceCAISMT567 9seev Corporate Action Instruction Cancellation Request Status AdviceCACSMT567 10seev Corporate Action Movement Preliminary AdviceCAPAMT564 11seev Corporate Action NarrativeCANAMT568 12seev Corporate Action Instruction Statement ReportCAST 13seev Corporate Action Movement Preliminary Advice Cancellation AdviceCAPCMT564 XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public

15 ISO CA messages ISO CA Extensions DTCC ISO adoption experience XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public15 Legacy system Proprietary Format files Participants Mapping to ISO Some proprietary elements not used ISO elements Mapped to proprietary Extensions temporary - to be discarded after proprietary system is adapted Elements to keep local for market needs - final disposition yet to be determined Extensions to be changes proposed for ISO future consideration ISO elements not mapped Important Steps working with SWIFT to avoid missteps on standards, design working with clients to ensure validity of design, extensions, etc. piloting with early adopters and verifying feasible timelines

16 Proxy Voting - MT to MX Replacing ISO functionality for “meeting” events 16 Function of MessageMT ISO MX ISO Meeting Announcement or Modification MT564 with event type CAEV = MEET, CMET, XMET, or OMET (or MT568/599) MeetingNotification seev Cancellation of Meeting or Meeting Notification MT564MeetingCancellation seev Confirmation of EntitlementMT564MeetingEntitlementNotification seev Voting Instruction (incl voting registration, meeting attendance, appointing proxy,…) MT565MeetingInstruction seev Cancellation of Voting InstructionMT565MeetingInstructionCancellationReques t seev Status on Voting InstructionMT567MeetingInstructionStatus seev Confirmation of Vote Executionn/a (nominal use of MT568/599) MeetingVoteExecutionConfirmation seev Results of Meetingn/a (nominal use of MT568/599) MeetingResultDissemination seev New XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public

17 DTCC’s timeline to roll out ISO Phase I Phase IIa Phase IIb Phase III Phase IV Phase V Phase VI Oct ‘09 Apr ‘11 Q or sooner DTC Data into WAVES Announcements ISO Full XBRL Interface Distribution Events Announcements and Processing Redemption Events Announcements and Processing Reorg Events Announcements and Processing Retire DTC Legacy Files Additional DTC specific data elements (276 out of 329 fields used for payments processing) passed through to WAVES platform for GCA VS customers. New ISO announcement messages, pilot testing begins, new customer user interface for announcements available for testing. implementation targeted for Q XBRL interface available, DTCC to receive tagged data for corporate action announcements. New customer user interface and ISO messaging is introduced for the entire lifecycle for distribution events, from announcements through elections and payments. Existing distribution processing systems are updated to carry the new unique ID. Same steps as in Phase III, but applied to Redemption events. Same steps as in Phase III, but applied to Reorg events, and Reorg processors are upgraded. DTC legacy CCF files are modified to handle new activity types and data elements. All DTC legacy CCF files (DIVANN, REDEM, REORG, MUNANN, RDPRPT, CMORTS), the GCA proprietary file and ISO will be retired. Overall Roadmap Implementation Date XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public 17

18 WHAT SHOULD BE THE PRIORITY? Data from Issuers –How? Regulatory/Rules or Industry? Business barriers? –XBRL? ISO 20022? Who: exchanges, registrars, wire services, data vendors? –Endorsement – “nice idea” or potential reality? CAJWG, ISSA, US Issuers to Investors, etc. –Skin in the game? Dichotomies? Disincentives? Standards –Incentive to move to ISO 20022? How long coexistence? –How long will legacy, proprietary & non-XML standards survive? –In dynamic world can we wait 21 months for change releases? Market Practice –Evaluate-able (STaQS), but not widespread. Is it complete and accurate? Why isn’t every market committed? –Should it be built-in? Certification for data providers? Presentation title – dd month yyyy – Confidentiality: xxx18

19 Useful Links XBRL for Corporate Actions – 24 May 2011 – Confidentiality: Public19 Issuer to Investor: Corporate Actions – market initiative of DTCC, SWIFT, and XBRL US Website Download the business case at Download the CA taxonomy at DTCC website Transforming Corporate Actions International Securities Services Association (ISSA) Global Corporate Actions Principles and Issuer Outreach: SWIFT - Corporate Actions and XBRL information

20 Thank you


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