Brown Brothers Harriman (BBH) has agreed to participate in a new ISO 20022 corporate actions messaging pilot programme run by the Depository Trust & Clearing Corporation (DTCC) and financial messaging network Swift.
BBH will use the Swift network to automatically receive standardised corporate actions announcements and their related cancellations from DTCC in ISO 20022 messaging formats.
Previously, DTCC has relied on its own proprietary formats and systems for corporate actions communications. In 2009, the depository announced plans to eliminate proprietary files and migrate to ISO 20022 messaging formats by 2015.
The initiative will replace the 60 legacy DTCC systems that currently support corporate actions and will create a single, new platform that allows users to manage their entire corporate action lifecycle from announcements through instructions to payments.
As a part of this migration, BBH is among the first to sign up to communicate with DTCC using ISO 20022 messaging formats over the Swift network.
The pilot, expected to start in Q2 2011, will be run by DTCC, with support from Swift for a good part of the year. Initially, the trial run will focus on corporate actions announcements and their related cancellations. The remaining 'lifecycle' processes, such as entitlements, elections and payments are expected to begin in 2012.
DTCC says that in addition to BBH, other financial institutions have already expressed their interest in participating in the pilot.
The announcement is the latest milestone achieved during the Issuer to Investor: Corporate Actions initiative, led by DTCC, Swift and XBRL US, which was launched in May 2009, to improve the processing of corporate actions data in the US using XBRL data tagging technology and ISO 20022 messaging formats.
Last month, XBRL US announced the availability of its Corporate Actions taxonomy, or data dictionary, for public comment, which was developed in conjunction with DTCC and Swift.
In June, the Issuer to Investor: Corporate Actions group published a business case, estimating some US$400 million savings annually if issuers use XBRL in the US to tag, or electronically identify the data, in their corporate event publications including prospectus, press release, and regulatory filings.
Concurrently, XBRL US has announced that Citi, along with several other issuers, will pilot the new taxonomy upon release later this year.