Corporate actions data: A guide to sourcing, use cases and future trends

Corporate actions are a critical component of market data, underpinning investment decision-making, compliance and operational processes across the financial services industry. While they may appear as administrative updates from issuers, the data derived from corporate actions has far-reaching implications for trading, risk management and portfolio operations.

This primer explores what corporate actions are, how corporate actions data is sourced, key considerations for investment firms and how future market developments may shape the corporate data landscape.

What are corporate actions?

Corporate actions are activities initiated by a company, typically approved by its board of directors, which can materially affect shareholders and the company itself. They fall into two categories:

- Mandatory corporate actions – decisions that apply to all shareholders, such as mergers and acquisitions, stock splits and dividend payments.

- Voluntary corporate actions – decisions where shareholders may choose to participate, such as rights issues, tender offers or share buybacks.

While often confused with corporate events, corporate actions are more granular at the security level. For example, redemption notices for bonds are captured in corporate actions datasets but may not appear in corporate event feeds. This detail makes corporate actions essential for back-office functions like reference data management and portfolio valuation.

Sources of corporate actions data

Corporate actions data can be difficult to source due to fragmented reporting practices and the absence of global standards. Issuers are required to notify stakeholders of material changes, but the method of disclosure varies. Common sources include:

- Regulatory bodies (such as securities commissions)

- Stock exchanges, which publish corporate action announcements for listed securities

- Central securities depositaries, which manage settlement and custody functions

- Company websites and proxy statements

- Custodians and prime brokers that notify clients directly

Investment managers may either access data directly from these primary sources or via aggregators. Direct sourcing can be timelier but typically offers limited coverage and fewer options for portfolio-specific data cuts. Aggregators, by contrast, consolidate information across multiple sources, providing broader coverage, data standardisation and custom feeds, though this introduces the risk of processing errors.

Additional considerations in corporate actions data

For investment firms, choosing the right source of corporate actions data involves more than just coverage. Data standards are also important. Most providers use ISO 15022 or ISO 20022 formats, which help ensure consistency and compatibility with internal systems. Aligning with the right format can reduce reconciliation challenges and improve efficiency.

Another consideration is the handling of voluntary and complex corporate actions. These can be more difficult to source and standardise due to varied reporting conventions across jurisdictions. Providers that invest in enrichment and validation processes can offer more accurate datasets for these cases.

Use cases for corporate actions data

Corporate actions data plays an essential role across front, middle and back offices:

- Operations and compliance – Ensuring that portfolio valuations reflect accurate capital adjustments, dividends and redemptions.

- Trading strategies – Event-driven funds use corporate actions to identify opportunities. For example, merger arbitrage strategies exploit price discrepancies between acquiring and target companies. Similarly, stock splits often generate temporary mispricing and liquidity shifts, creating opportunities for active traders.

- Risk management – Corporate actions data helps reduce operational risk by ensuring that corporate actions are accurately reflected in trading and settlement systems.

Future developments: towards consolidation

Looking ahead, regulators and exchanges are moving towards greater consolidation of corporate actions disclosure. Markets such as Australia and Singapore have implemented single-source models, where issuers report only to exchanges, which then disseminate the data. Early evidence shows this model improves timeliness, reduces costs and simplifies event verification.

If adopted more widely, these reforms could significantly improve the quality and accessibility of corporate actions data, benefiting both data vendors and investment firms.

Conclusion

Corporate actions may represent a small subset of overall corporate data, but their operational and strategic importance is vast. As investment firms continue to refine how they use market data, sourcing accurate and timely corporate actions data will remain essential. With ongoing reforms and the gradual adoption of standardised reporting, the future promises a more efficient and transparent landscape for corporate data.

Want to explore the full depth of our research into corporate actions data? Book a demo with Neudata to see how our intelligence can support your market data strategy.

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