6 Corporate Actions Processing: Bridging the Gap Between Issuer and Investor

Subject(s):

Intermediated securities — Issue and trading of securities — Securities lending — Securities settlement system — Security issuer

This chapter explains the lifecycle of securities, wherein issuers and investors must effectively liaise with regard to the rights attached to securities and other rights concerning general meetings, distribution of income, and provision of information. It talks about the complication of processing corporate actions when an intermediated chain is involved and typically composed of several actors. It also analyzes the discrepancy between who is legally entitled to the rights attached to the securities and who is economically entitled to these rights. The chapter explores bottlenecks in the intermediated system and ways to address them in relation to different types of corporate actions, which includes voting rights, income payments, and the provision of information. It highlights possible solutions on the gap between issuer and investor that is compatible across borders, such as a cross-border investor being able to exercise rights in the same way as a domestic investor can.