The Hidden, Rising Costs of Corporate Actions
Every time a company announces dividends, stock splits, rights offerings, tender offers or other such corporate events, investors have decisions to make – and a brief time to make them.
Investment teams are missing $billions in performance for their funds as corporate actions become more frequent and complex.
In a recent article published by DTCC, Managing Director Tim Lind says:
“Corporate events are not only becoming more frequent, but they are also becoming more complex. These two trends combine to make managing them more challenging as investors need to read, interpret, and fully understand the specifics of each event to decide which action will create the greatest returns. But information often arrives late, is presented in inconsistent formats and assessing the full impact – especially for complex investment instruments – can eat up a lot of time.
This can create problems as issuers may allow five days to respond. However, investors usually have only one or two days left by the time they receive the information.
A lot of this activity is also conducted by email or using other manual processes, so in addition to the cost of manual processing, there is also greater potential for operational risk. It’s customary for the asset manager or custodian to compensate the underlying fund in the event of an error, so mistakes can be expensive in this operation.”
Scorpeo and Euroclear launched Euroclear Cash+® in 2025 to ensure that investors and pension funds do not suffer from the inefficiency in corporate action processing or decision making.
Investors using Euroclear Cash+® on optional dividends in 2025 benefited from 6-10% increases in dividend yields for some holdings. Up to the moment event data can be seen here.
Ready to reclaim lost revenue and maximise your returns? Get in touch with Scorpeo or contact your global custodian.
