Adoption of data standards and shared best practices will help drive automation of corporate actions.(Headline: TowerGroup)

The processing of corporate actions remains one of the biggest roadblocks standing between the securities industry and straight-through processing (STP). New research from TowerGroup finds that despite some progress toward greater processing efficiency in corporate actions, the challenges of disparate, unreliable data as well as manually-intensive processes are likely to persist for many years to come.

A corporate action may be loosely defined as any event a corporation initiates that affects the company's shareholders. There are currently 67 corporate action types defined and used globally, according to the International Securities Association for Institutional Trade Communication. "The best possible solution to the corporate actions issue starts with bilateral industry-wide adoption of data standards, and ends with industry-wide agreement on best practices," said Matt Nelson, a senior analyst in the Investment Management research service at TowerGroup. "By collaborating to achieve a single, central set of best practices, the industry can move toward STP in corporate actions."

Highlights of the research include:

* While the complexity of the data and the large number of communication points have long been the biggest corporate actions pain points, the emergence of data standards has made improvements in ...