Managing corporate actions is essential for a brokerage. Unfortunately, it is a complex process that requires time, effort, and automation to ensure everything runs smoothly.
Corporate events, such as spin-offs, stock splits, and other transactions, can affect clients’ portfolios, trading experience, and regulatory compliance.
Navigate corporate actions effectively, and you’ll reduce operational risks and enhance team efficiency.
How can one achieve that?
The TFB Toolbox offers a range of tools that automate corporate actions and free brokers from yet another worry.
Why automating corporate actions is important
Corporate actions play an important role in a brokerage’s workflow.
Automating this workflow element enables brokers to achieve several significant benefits.
- Almost completely eliminate manual errors
- Speed up processing
- Meet regulatory requirements
- Support scalability
- Elevate client satisfaction
- Strengthen risk management
Overall, automating corporate actions (or any other element of the brokerage process) frees up the team’s valuable time, allowing it to redirect resources from manual, repetitive tasks to more critical, strategic priorities.
The corporate action automation tools available in the TFB Toolbox
The TFB Toolbox is a multi-component solution that unites all TFB plugins and applications under a single web UI. This allows for simple portfolio management and ad hoc changes.
The tools below are available in the TFB Toolbox and automate various corporate actions.
#1 Spin-Off
The Spin-Off application removes surpluses or compensates traders for losses arising from a rights issue or a spin-off if a new, independent legal entity is separated from a parent company.
- Compensate losses or remove surpluses through a cash adjustment.
- Generate a report on executed cash adjustments that is useful for further analysis.
- Send customisable email notifications with information about executed operations and potential issues.
- Roll back incorrect balance operations with the Back Out Cash Adjustment operation.
#2 Stock Split for MT4
The Stock Split application helps in situations where precise adjustments in share quantities or price per share are required. The application powers seamless recalibration of trader positions and ensures that changes are reflected immediately, without delay, reducing confusion during manual stock splitting.
- Request open and pending orders for selected symbols and accounts.
- Proportionally change the number of lots and the opening price in received orders.
- Round up lots and prices.
- Carry out balance operations for withdrawals or deposits of funds when it is not possible to perform a stock split without a remainder (optional).
- Indicate a custom comment in balance operations (optional).
- Change the values already entered in the SL/TP positions: either erase them or adjust them proportionally.
- Close positions of reverse stock splits whose new volume is less than the minimum volume specified in the MT4 group settings.
#3 Dividend Payout
The Dividend Payout application enables smooth dividend distribution among traders. Dividend payouts are often a tedious process that requires accurate calculation and distribution, which can take a significant amount of time. The application automates the entire thing, saving administrative time and boosting accuracy.
- Calculates dividends in the amounts specified by the configuration.
- Enables configuring dividend distribution at specified time points with withheld dividend tax.
- Performs balance operations of dividend deposit/withdrawal.
- Sends customisable email notifications with information about executed operations.
- Sends a report on deposited dividends to the broker via email.
Final thoughts on corporate actions automation
Automating corporate actions sets the brokerage up for success.
Brokers are already dealing with never-ending volatility, a constant stream of black swans, and a thousand other pressing issues. Automating crucial operational elements is a sure way to take one task off your plate and allow you to breathe a bit more freely.
The TFB Toolbox offers an easy, accessible way to automate a range of corporate actions through a user-friendly interface for daily management.
There’s really no reason not to do it. With manual corporate actions execution out of the way, brokers will have sufficient capacity to focus on core business growth and maintain superior service for their clients.
FAQ
What are corporate actions?
Corporate actions are events initiated by a publicly traded company. The examples may include stock splits or spin-offs. Brokers need to closely follow and manage these events to ensure regulatory compliance and up-to-date client portfolios.
Why is automation important for corporate actions?
Corporate actions are critical and time-consuming. Automating them significantly reduces human errors, speeds up the entire process, and ensures compliance.
How does the TFB Toolbox simplify corporate actions’ operations?
With the TFB Toolbox, brokers get a single pane of glass view of all corporate actions tools. They can set everything up and monitor it via a user-friendly interface and ensure safety through numerous built-in risk management features, such as role-based access controls.
