ISSA Corporate Actions Working Group

ISSA invited all its members and interested third parties to comment, firstly on a set of proposed global principles for handling corporate actions; and secondly on current local or regional market initiatives in the field of corporate actions.

Background and Objectives:

• In a member survey presented during the 2008 ISSA symposium, "corporate actions harmonization and standardization" emerged as the top priority item where our members thought that an ISSA involvement could create value for the industry. Our members observed that various efforts were under way in different world regions, but that there was neither an industry-wide dialogue across the world regions, nor a systematic end-to-end process coordination along the value chain. In other words, from a bird's eye view, there is a lack of global coordination as well as coherence.
• Terms of reference and scope for an ISSA working group were then drafted by the board. Key concerns were not to re-invent the wheel, but to highlight existing efforts around the world, facilitate their alignment, and to integrate work in partial areas to achieve an end-to-end process view.
• During the past months, an ISSA working group produced the document below which is still "work in progress". Pages 5-14 contain its core substance. In essence, the group proposes nine principles that it believes could become a globally applicable guide to the industry to improve risk reduction, efficiency, investor protection, and issuers' ability to reach a broad investor base.
• It is important to note that this project is not about creating "yet another" set of recommendations. It is about bringing together valuable efforts that already exist locally and putting them to use on a wider scale, in dialogue with the groups who articulated them.
• ISSA sees itself in the role of a catalyst to help achieve the desired leverage. In addition, ISSA wishes to play a role in helping to prevent multiple bodies from working on the same issues in independence of each other, and to fill gaps where important ones are identified.

Process:

Market feedback on the proposed principles was invited, and local market contributions to complete an inventory of current corporate action initiatives around the world were sought.

Documents:

Multiple Distribution Channels:

At the outset of this project, the CSD associations ACSDA and ACG indicated a strong interest in participating in this effort and offered to act as regional coordinators. Similarly, SWIFT - which participates in the ISSA core working group - offered to involve its Asia-Pacific Asset Servicing Group. The documents were therefore distributed through different channels. To avoid duplication, those ISSA members who are also members of ACSDA or ACG and received the same survey through their CSD association, were kindly requested to reply through that channel. In Japan, Nomura kindly offered to coordinate a local market response. All other responses were to be sent to the ISSA Secretariat.

The deadline for input is over.

Next steps:

• The final report will be published at the end of June 2010. All contributors will be notified.

The ISSA Board and the ISSA Corporate Actions Working Group thanks all parties involved in this project for their valuable cooperation!

> Members of the Working Group