Asset management companies typically manage funds and portfolios comprising a wide range of securities – and each of them may be subject to corporate actions at any time. These can include capital increases, mergers, takeover bids or dividend elections, to name just a few. Custodians usually communicate these events via SWIFT, although information may still arrive through more traditional channels such as post, email or fax. As a result, day-to-day processing often involves extensive documentation, tight deadlines and a significant amount of manual work. With xpass, we offer a solution designed to address precisely these challenges.

For a simple Mandatory Corporate Action, no decision is required and the event merely needs to be acknowledged. The process becomes more complex when a choice has to be made, as is the case with a Mandatory Corporate Action with Choice or a Voluntary Corporate Action. An informed decision must then be reached in consultation with portfolio management or relevant specialists and communicated to the custodian within the required timeframe. If no response is received by the deadline, the default option is automatically applied. This may not align with the intended investment strategy and, in some cases, can have significant financial consequences.

Growing complexity as the new reality

Closely linked to corporate actions is proxy voting – the exercise of voting rights at annual general meetings on behalf of investors whose shares are held by a fund. As asset management companies (AMCs) cannot attend every AGM in person, votes are typically cast by proxy, either electronically or through specialist service providers.

Here, too, complexity is increasing. This is particularly evident during AGM season, when numerous votes across multiple markets need to be handled in quick succession – each with its own deadlines and rules, and increasingly with specific requirements for incorporating ESG criteria. The European Shareholder Rights Directive (SRD II) adds another layer of complexity, requiring institutional investors to provide transparency around their voting behaviour.

As volumes increase, manual processes are reaching their limits. “Rising volumes, new markets and regulatory pressure call for more efficient processes,” says Tina Hofmann, Managing Director of Profidata subsidiary itechx. “This is exactly where xpass comes in.”

SWIFT notifications are automatically captured in the system, while corporate actions can also be entered manually if a custodian communicates through more traditional channels. Funds and holdings are automatically identified, recommendations from in-house specialists can be incorporated directly, and flexibly configurable standing instructions allow the appropriate option to be determined automatically in many cases. To ensure that no deadline is missed, xpass alerts the relevant decision-makers in good time before the final instruction is sent back to the custodian via the required channel.

“xpass relieves clients of the operational burden while providing greater transparency and control – both essential in today’s regulatory environment,” says Tina Hofmann.

The benefits are clear: less manual processing reduces the effort required for data capture and checks, allowing teams to focus on the cases that genuinely require their expertise. Automated deadline monitoring, system-based dual-control checks and comprehensive documentation also help reduce the risk of manual errors.

xpass scales with clients’ requirements, enabling them to process more funds and mandates or expand into new markets without a corresponding increase in staffing. “For our clients, this means one thing above all: they can grow without their costs increasing at the same rate,” says Tina Hofmann.

The benefits of integration become particularly clear when xpass is combined with XENTIS. Holdings and master data from XENTIS provide a reliable foundation for processing: holdings can be blocked immediately when required – for example, in the case of a buy-back offer – while existing corporate actions are transferred seamlessly. XENTIS clients therefore benefit from an integrated solution within the Profidata Group, with implementation and support provided from a single source – either on-premises or via Xcloud.

“The integration between xpass and XENTIS works seamlessly: XENTIS provides event master data, current holdings and relevant information on the funds concerned. Even the blocking and unblocking of affected holdings can be processed automatically,” says Ralf Spöth, Head of Business Service Development at Profidata.

“Master data, holdings and corporate actions come together to provide a complete overview – without system discontinuities or additional manual effort,” adds Tina Hofmann.

xpass is not tied to XENTIS. The solution can also operate independently and integrate with other third-party systems. This means that asset management companies and asset managers using different system landscapes can benefit from the same capabilities.

Corporate actions and proxy voting are becoming increasingly complex, making efficient and reliable processes more important than ever. With xpass, financial institutions can reduce manual effort, gain greater transparency and maintain reliable processes even as volumes grow.