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Hands On With Corporate Actions And XBRL
2013-10-16 Author:Greggory lewis Editor:无忧草 Views:

Greggory lewis of Globetax and michael silverence,vice President,Depositary receipts Product &innovation manager,BNY Mellon explain the practical benefits of using XBRL for Corporate Actions.

What are the benefits of receiving adr dividend announcements in XBRL?

Greggory:to date we have approved over 1,400 XBRL instances,received from both Citibank and BNY Mellon,into our security master File.

Given the time it used to take our team members to enter the information contained in the paper copy of the ADR dividend announcement and for another employee to check their input,we have saved many man-hours which has freed up the team to address other value-add projects and tasks.While harder to measure,our efficiency has also increased due to the automation we have achieved by accepting the XBRL instance.

Also difficult to quantify is the possibility (or rather inevitability)that,despite checks we have in place,the manual transcription of the dividend announcement results in an error in the data entry function.Potential losses from an incorrect value that was manually inputted into our security master File could be very large.By taking the XBRL instances versus manual data entry,we have removed a large element of risk from the process.

The next stage is to use the XBRL instances as the basis for automating our DtC important Notice production.

All DtC important Notices for taxable ADr events are created by Globetax as an agent for the ADR depositary banks and published through DtCC.The data coming from the ADR Depositaries in XBRL format will be used to populate much of the event data in the important Notice.

Specific tax data which Globetax collaborated with XBRL us to identify and incorporate into the taxonomy,will be automatically populated from a proprietary rules database.

The same benefits we achieved from consuming the data electronically will also apply to our automation of the DtC important Notice output,namely less risk,lower production costs,and increased productivity.

michael:We found that many different entities,such as data providers and brokers were using our website as the “golden”data source for the Drs that BNY Mellon only made sense that we provide them the data in the XBRL format,which they can parse and load directly into their own processing applications,eliminating the possibility of manual key punch errors.

What are the benefits to the Banks in providing the announcements in this format?

greggory:the depositary banks are interested in achieving better communication to the investor community.One of the principles with XBRL,or any standard for that matter,is to maintain the integrity of the data.As i mentioned before,by pushing the announcement to downstream consumers as an XBRL instance,the risk of polluting or otherwise disturbing the integrity of the data is far less our case,we add specific tax data to the XBRL instance which flows downstream towards the final investors.In some cases,these investors may never have known that withholding tax relief on their cross border income events was possible.As the issuer,the depositary banks have self interest in ensuring that investors into those instruments are able to access their entitlements to excess withholding tax.In order to do that,the investors must have easy access to necessary data.

michael:one of the benefits of BNY Mellon using the XBRL taxonomy to announce depositary receipts corporate action events,is that we now have a standard which our downstream users (exchanges,intermediaries,data provides and strategic partners) can use to ensure that they process and disseminate the event data correctly.Before XBRL these announcements were made in a PDF,which lends itself to possible downstream data key punch errors. the ultimate benefit here,will be to the holders of depositary receipts,as they will now receive more reliable information from their providers.

What do you see as the next steps for XBRL’s role in corporate actions

greggory:As far as Globetax is concerned the proof of concept is already complete,it works!One step we would like to see will be for the ADR depositary banks,or other issuers,to include more income event types.the taxonomy has over 100 different events covered for debt and equity and the pilot has been limited to 4or 5.

Additionally we see the international community “joining the party”and have spoken with clients from Japan and some forward thinking european countries who are enthusiastic about the idea of using and distributing XBRL.

If the us government mandates the use of XBRL (US GAAP Financial reporting and current legislation in the DAtA ACt,which XBRL seems to be the frontrunner for),then its use will expand exponentially to any us based Corporate entity who initiates an income event.Should that happen it will save countless hours or rekeying,the data will be more transparent (and less open to interpretation)and move faster through the custody chain which would add liquidity to the market.

michael:the depositary receipts pilot shows that the adoption of the XBRL taxonomy increases the quality of the downstream data.However,in order for XBRL to be its most effective and to provide a true issuer to investor information data stream, it will need to be adopted as the standard for Corporate Action event announcements at each touch point.



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