SunGard boosts corporate actions automation capability through acquisition of XSP
Brendan Farrell will remain at the head of XSP following the deal
Financial technology company SunGard has acquired XcitekSolutionsPlus, a corporate actions specialist, in a move aimed at capitalising on the increasing automation of the sector.
XSP specialises in tools built to automate corporate actions processing. These cover data sourcing and cleansing, position monitoring, notification and response and entitlement processing, and are available on a deployed, hosted and software as a service basis.
Under the terms of the acquisition, XSP will become part of SunGard’s capital markets business. XSP’s current chief executive, Brendan Farrell, will continue to lead the XSP team and will report to John Grimaldi, head of SunGard’s North American securities business.
XSP tools include the company’s XSP v5 platform for large multi-tenant enterprises, XSPrisa, a software as a service solution for medium enterprises, and XSP GO!, a suite of customisable user interface components that include mobile applications.
“Corporate actions processing is fundamental to the successful operations of most financial services firms, including sell-side traders, custodians, asset managers, hedge funds and wealth managers,” said Grimaldi. “These firms are at the heart of SunGard’s business. The acquisition of XSP will help us deliver specialist corporate actions expertise and solutions to these core customers, and enhance our offering to our securities processing, accounting and servicing customers.”
Corporate actions has been characterised by some heads of governance at major asset management firms as one of the most risky areas outside the trading floor. Problems with back office functions could potentially cause severe costs for financial institutions, and recent years have seen a drive to automate corporate actions processing as far as possible.
However, the problem for the industry is that before it can automate actions between all participants, it must adopt standardised templates so that the information contained can be processed effectively. Last year, Werner Frey, head of post-trade at trade body the Association of Financial Markets in Europe, said that central securities depositories and intermediaries have been successful in the push towards adopting standards.
Meanwhile, US national depository the DTCC will mandate the use of an ISO 20022 structure by 2015. During 2012, it has been implementing ISO 20022 corporate actions message standards for its corporate clients and is undergoing a pilot with several third party administrators including JP Morgan, Brown Brothers Harriman, ITG and BNY Mellon to use ISO standards to communicate between those institutions.
