Cross-border custody is a vital foundational service that helps domestic financial institutions participate in overseas markets.
In 2015, the Authority approved TDCC to provide cross-border custody services, undertaking the custody of foreign securities and related book-entry transfer operations, including custody, book-entry transfer, settlement coordination, and information transmission, offering standardized back-office support. The services are provided to financial institutions that partner with TDCC. These participating financial institutions provide investors with trading, asset custody, and corporate action services. As such, TDCC serves as a central hub for overseas securities custody operations. The company not only enhances the security of asset custody and information transparency but also strengthens the efficiency of corporate action notice processing and the quality of collaboration across custodian banks.
Corporate action notices are closely tied to investor rights and interests, and careful verification is essential to safeguard those interests effectively.
Corporate action notices provide important information that affects investors' rights and interests, such as cash dividends, stock dividends, ex-rights/dividend, stock splits, and reverse splits. In practice, TDCC receives these notices from custodian banks every day. The record date, ex-rights/dividend date, dividend ratio, and stock ratios in the notices affect entitlement calculation, account processing, and notification timing. If the notice is late, incomplete, or incorrect, it can cause calculation errors in rights and dividend and therefore incur extra costs for adjustment. To address this, TDCC has set up a corporate action notice verification system to cross-check notices from custodian banks through the computer system daily.
The daily verification of corporate action notices allows TDCC to identify important information affecting investors' rights and interests at an early stage.
Since 2025, TDCC has performed daily corporate action notice verification for the cross-border products it holds in custody, with priority given to events set to take effect within the following two weeks to stay on top of important information affecting investors’ rights and interests as early as possible. The computer system automatically performs the cross-checking process each day, consolidating corporate action information provided by various custodian banks and cross-referencing data for the same product and the same event. Items compared involve the record date, ex-rights/dividend date, dividend distribution ratio, stock dividend ratio, and other information affecting investors’ rights and interests. Once the comparison is complete, the computer system generates a comparison results report, enabling business unit staff to review the results and track the outcomes promptly. This ensures that participating financial institutions receive corporate action notices that are both timely and accurate.
To continuously enhance the quality of the verification mechanism, corporate action notices from internationally trusted data providers have been added as an external reference.
To further improve the corporate action notice verification mechanism, since 2026, TDCC has added corporate action notices provided by internationally trusted data providers as an additional external reference based on the existing cross-checking process involving multiple custodian banks. Cross-checking information from different sources helps identify discrepancies such as timing gaps in notifications or inconsistencies in figures at an early stage, thereby reducing the risk that may arise from relying on a single source. At the same time, this makes TDCC’s verification mechanism more reliable and robust, helping to improve the overall quality of the verification mechanism.
The verification mechanism will continue to be enhanced to provide timely, accurate, and reliable corporate action notices.
The timeliness and accuracy of corporate action notices form an important foundation for safeguarding the rights and interests of participating financial institutions. By establishing a verification mechanism and incorporating additional reliable external international reference information, relevant information can be identified before events take effect. Automated consolidation and cross-checking performed by the computer system allow business unit staff to focus on scenarios that require professional judgment, further enhancing overall operational efficiency. In addition, a consistent verification mechanism applied to corporate action notices from each custodian bank can reduce processing discrepancies that might otherwise arise from differences between sources. Going forward, market practices and operational experience will continue to guide TDCC's consistent commitment to service. Efforts will remain focused on enhancing information transparency and event processing quality, with continuous refinement of the corporate action notice verification service to ensure it remains timely, accurate, and reliable.
