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Making corporate actions risk visible
05 Aug 2026
Jonny Ruck, co-founder and CEO of IntelliActions, discusses with Zarah Choudhary, the market risk embedded within corporate actions, the value lost through missed elections, and why AI remains a tool rather than a complete solution
Image: rymden/stock.adobe.com
Corporate actions may sit within the operational infrastructure of financial markets, but the risks they generate are not solely operational.
For Jonny Ruck, co-founder and CEO of IntelliActions, the distinction is important. A missed deadline or incorrectly processed election can create an operational liability for a custodian or asset servicer.
For the investor, however, the same failure may result in a missed opportunity, a suboptimal outcome, or a direct loss of value.
“The event is the same, but from an operational point of view, missed deadlines and missed elections bring potential downside risk, whereby clients may need to be made good,” Ruck explains.
“From an investor perspective, making suboptimal elections, missing elections, or receiving a default option creates missed-value opportunities.”
Ruck brings experience from both sides of the corporate actions lifecycle.
After beginning his career in corporate actions operations, he moved into the front office and spent approximately 15 years trading arbitrage around corporate actions at investment banks and hedge funds.
His career included positions at Lehman Brothers and Nomura, before he became CEO of Scorpeo, a company focused on reducing investor losses around corporate actions.
He later co-founded IntelliActions, which uses corporate actions and convertible bond data alongside AI-driven analysis to help firms identify missed value and quantify risk.
Having worked in both operations and trading, Ruck believes corporate actions are among the areas of post-trade processing most directly exposed to market risk.
“It is probably the one area of operations that carries the most market risk, yet quite often that risk is unseen,” he says.
“Operations teams can be a little blind to what the value at risk is, which is not a criticism. They simply do not always have the tools that the front office has.”
Beyond processing accuracy
Corporate actions teams have traditionally concentrated on whether events were received, elections were submitted, and entitlements were processed correctly.
Those controls remain essential. However, Ruck argues that firms also need greater visibility into the potential financial consequences of an error.
“In the front office, there is so much emphasis placed on risk. It is a huge part of everything that happens,” he says.
“In operations, risk is often considered in terms of whether something was processed, how it was processed, whether it was correct, and whether anything was missed.”
The reason those controls matter, he adds, is ultimately because failures can produce a financial loss. Understanding the scale of that possible loss could therefore help operations teams decide which events require the greatest attention.
“Knowing what the potential loss could be is equally important because it allows for better prioritisation,” Ruck explains.
This is particularly relevant for voluntary corporate actions, where events frequently include different election options, deadlines, conditions, and market-specific requirements.
While mandatory events may lend themselves more readily to straight-through processing (STP), voluntary events are more difficult to automate because apparently minor differences can materially change the outcome.
“There are thousands of corporate actions every year, and some are far riskier than others,” Ruck informs.
“Voluntary corporate actions still tend not to be fully straight-through processed because there are quirks in all of them. Each event is slightly different, and that slight difference is usually the part that makes all the difference.”
Without a clear view of the value at risk, operational resources may be distributed relatively evenly across events, despite some carrying substantially greater financial exposure than others.
“We are not always able to prioritise which events we should put more time into and which require less,” he adds. “Everything can receive a similar level of attention, even though some events are obviously far riskier.”
The cost of making no election
The consequences of that complexity are not limited to processing errors. Investors may also lose value by failing to make an election altogether.
Ruck says IntelliActions recently examined 10 large US merger and acquisition events from the past five years in which shareholders were required to choose between consideration options such as cash or stock.
Across the events, a weighted average of more than 25 per cent of shareholders made no election.
“They did not go left, they did not go right; they did not do anything,” he reiterates.
In many events, non-electing shareholders receive a default outcome. That option may be less valuable than the alternatives available, or non-electors may be used to complete a proration process and consequently allocated the less attractive form of consideration.
According to Ruck, the combined missed value identified across the 10 transactions was approximately US$1.4 billion.
“This is often not a case of people making bad elections,” he points out. “It is a case of people making no election at all.”
In a more recent transaction, Ruck says the difference between the cash and stock options was approximately US$70 per share. Despite the disparity, just under 10 per cent of investors did not make an election, producing what he estimates was close to US$200 million in missed value.
The reasons behind non-election are not always clear. However, Ruck suggests that investors may lack access to a sufficiently clear explanation of the economic consequences of each option.
“Not everyone is able to understand what the value is because it can involve a number of unusual calculations,” he observes.
“Potentially, clients need a better view rather than simply more and more data.”
A dual instrument
The challenge becomes greater when corporate actions interact with convertible bonds. Convertible bonds combine characteristics of debt and equity, allowing a bondholder to convert the instrument into shares under specified circumstances. Servicing them therefore requires an understanding of both the bond and the underlying equity.
“A convertible bond is realistically a derivative of the underlying equity into which it converts, and it is driven largely by that equity,” Ruck explains.
The contractual terms governing a convertible bond may be contained within a prospectus extending beyond 200 pages. Those documents can include provisions relating to conversion prices, adjustment mechanisms, calls, puts, redemption rights, and conversion windows.
Many of those provisions are activated by developments affecting the underlying shares rather than the bond itself.
“In order to track the bond from an operational point of view, you also need to track every part of what is happening with the underlying equity,” Ruck says.
“Bonds are often viewed as fixed income and equities as equity. In convertibles, there is a significant crossover. Many things that affect the equity have a real influence on what happens to the bond.”
That duality makes the instruments difficult to oversee at scale. Ruck estimates that approximately 10,000 convertible bonds are currently live globally, each potentially requiring the monitoring of the bond, its underlying equity, and the individual conditions contained within its documentation.
The operational exposure may also differ significantly from the bond’s original notional value.
Ruck gives the example of a US$1 billion convertible bond issued when the underlying company’s share price was substantially lower. If the share price subsequently rises by 200 or 300 per cent, the equity value obtainable through conversion could reach US$3 billion.
“You may have a bond with a notional value of US$1 billion, but equity worth US$3 billion upon conversion,” he notes. “That is a significant difference.”
Other bonds may remain out of the money and present less immediate economic risk. They still require processing, but visibility into their underlying exposure could allow firms to concentrate resources on the positions with the greatest potential impact.
A tool rather than a solution
AI is beginning to make the documentation underpinning these events easier to process.
Models can ingest prospectuses, notices and amendments, extract relevant terms, and convert information presented in different formats into structured data.
“The area in which AI has helped is that it can read documentation very quickly and store the information,” Ruck informs.
“In the past, somebody would read the document, but they could not remember everything within it. If the information was not stored intelligently, it could not easily be called upon later.”
AI can improve the normalisation of corporate actions data, which has historically been complicated by inconsistent formats and terminology. Information can now be received in different forms and converted into a structure that downstream systems can interpret.
For Ruck, this represents a significant step forward, but it does not remove the underlying risk.
“Once the information is normalised and inside the system, you still need to determine where the risks lie and what needs to be done,” he remarks.
AI can help firms retrieve terms relating to the opening or closing of conversion windows, notice periods, and other contractual conditions.
The technology can also support continuous monitoring by connecting the information contained within the original documentation to subsequent market events.
However, it remains dependent on firms knowing which provisions and exceptions they need to identify.
“Provided we know which quirks we are looking for, we can call upon that information and begin tracking them,” Ruck says.
The difficulty is that voluntary events and convertible bond structures are not entirely uniform. An AI model trained on previous events may struggle when faced with a new contractual feature or an unfamiliar variation.
“AI only learns from what it knows,” he explains. “When something completely new comes along, it needs to learn again.”
Human review therefore remains necessary, particularly where an extracted term could influence a financially significant decision.
“It has not solved the problem from A to Z,” Ruck adds. “The process still needs to continue, but it makes the job much easier because the information required from the document can be found more quickly.
“It is still a tool. It is not a solution.”
Closing the visibility gap
As corporate actions data becomes increasingly structured and accessible, Ruck believes the industry’s next priority should be making the market risk embedded within events more visible.
Although institutions are generally aware that corporate actions can create financial exposure, the size, and location of that exposure may not be apparent to the operational teams responsible for processing the event.
“When an instrument moves from one floor to another, the element of risk does not change,” he observes.
“In most operational areas, that risk may not materialise as market risk. In corporate actions, it absolutely does.”
Greater visibility could help institutional investors, custodians, and asset servicers move beyond treating all exceptions or voluntary events with the same level of urgency.
Instead, teams could use the financial exposure attached to each event to direct human expertise towards the most consequential positions.
“Now that we have come a long way in normalising data, we can begin to look at the next level,” Ruck concludes.
“We need to turn our attention to the risk embedded within corporate actions and make it visible. That would allow far better prioritisation, so human effort is directed towards the right place rather than spread across everything.
“There is a significant visibility gap, and we need to begin closing it.”
For Jonny Ruck, co-founder and CEO of IntelliActions, the distinction is important. A missed deadline or incorrectly processed election can create an operational liability for a custodian or asset servicer.
For the investor, however, the same failure may result in a missed opportunity, a suboptimal outcome, or a direct loss of value.
“The event is the same, but from an operational point of view, missed deadlines and missed elections bring potential downside risk, whereby clients may need to be made good,” Ruck explains.
“From an investor perspective, making suboptimal elections, missing elections, or receiving a default option creates missed-value opportunities.”
Ruck brings experience from both sides of the corporate actions lifecycle.
After beginning his career in corporate actions operations, he moved into the front office and spent approximately 15 years trading arbitrage around corporate actions at investment banks and hedge funds.
His career included positions at Lehman Brothers and Nomura, before he became CEO of Scorpeo, a company focused on reducing investor losses around corporate actions.
He later co-founded IntelliActions, which uses corporate actions and convertible bond data alongside AI-driven analysis to help firms identify missed value and quantify risk.
Having worked in both operations and trading, Ruck believes corporate actions are among the areas of post-trade processing most directly exposed to market risk.
“It is probably the one area of operations that carries the most market risk, yet quite often that risk is unseen,” he says.
“Operations teams can be a little blind to what the value at risk is, which is not a criticism. They simply do not always have the tools that the front office has.”
Beyond processing accuracy
Corporate actions teams have traditionally concentrated on whether events were received, elections were submitted, and entitlements were processed correctly.
Those controls remain essential. However, Ruck argues that firms also need greater visibility into the potential financial consequences of an error.
“In the front office, there is so much emphasis placed on risk. It is a huge part of everything that happens,” he says.
“In operations, risk is often considered in terms of whether something was processed, how it was processed, whether it was correct, and whether anything was missed.”
The reason those controls matter, he adds, is ultimately because failures can produce a financial loss. Understanding the scale of that possible loss could therefore help operations teams decide which events require the greatest attention.
“Knowing what the potential loss could be is equally important because it allows for better prioritisation,” Ruck explains.
This is particularly relevant for voluntary corporate actions, where events frequently include different election options, deadlines, conditions, and market-specific requirements.
While mandatory events may lend themselves more readily to straight-through processing (STP), voluntary events are more difficult to automate because apparently minor differences can materially change the outcome.
“There are thousands of corporate actions every year, and some are far riskier than others,” Ruck informs.
“Voluntary corporate actions still tend not to be fully straight-through processed because there are quirks in all of them. Each event is slightly different, and that slight difference is usually the part that makes all the difference.”
Without a clear view of the value at risk, operational resources may be distributed relatively evenly across events, despite some carrying substantially greater financial exposure than others.
“We are not always able to prioritise which events we should put more time into and which require less,” he adds. “Everything can receive a similar level of attention, even though some events are obviously far riskier.”
The cost of making no election
The consequences of that complexity are not limited to processing errors. Investors may also lose value by failing to make an election altogether.
Ruck says IntelliActions recently examined 10 large US merger and acquisition events from the past five years in which shareholders were required to choose between consideration options such as cash or stock.
Across the events, a weighted average of more than 25 per cent of shareholders made no election.
“They did not go left, they did not go right; they did not do anything,” he reiterates.
In many events, non-electing shareholders receive a default outcome. That option may be less valuable than the alternatives available, or non-electors may be used to complete a proration process and consequently allocated the less attractive form of consideration.
According to Ruck, the combined missed value identified across the 10 transactions was approximately US$1.4 billion.
“This is often not a case of people making bad elections,” he points out. “It is a case of people making no election at all.”
In a more recent transaction, Ruck says the difference between the cash and stock options was approximately US$70 per share. Despite the disparity, just under 10 per cent of investors did not make an election, producing what he estimates was close to US$200 million in missed value.
The reasons behind non-election are not always clear. However, Ruck suggests that investors may lack access to a sufficiently clear explanation of the economic consequences of each option.
“Not everyone is able to understand what the value is because it can involve a number of unusual calculations,” he observes.
“Potentially, clients need a better view rather than simply more and more data.”
A dual instrument
The challenge becomes greater when corporate actions interact with convertible bonds. Convertible bonds combine characteristics of debt and equity, allowing a bondholder to convert the instrument into shares under specified circumstances. Servicing them therefore requires an understanding of both the bond and the underlying equity.
“A convertible bond is realistically a derivative of the underlying equity into which it converts, and it is driven largely by that equity,” Ruck explains.
The contractual terms governing a convertible bond may be contained within a prospectus extending beyond 200 pages. Those documents can include provisions relating to conversion prices, adjustment mechanisms, calls, puts, redemption rights, and conversion windows.
Many of those provisions are activated by developments affecting the underlying shares rather than the bond itself.
“In order to track the bond from an operational point of view, you also need to track every part of what is happening with the underlying equity,” Ruck says.
“Bonds are often viewed as fixed income and equities as equity. In convertibles, there is a significant crossover. Many things that affect the equity have a real influence on what happens to the bond.”
That duality makes the instruments difficult to oversee at scale. Ruck estimates that approximately 10,000 convertible bonds are currently live globally, each potentially requiring the monitoring of the bond, its underlying equity, and the individual conditions contained within its documentation.
The operational exposure may also differ significantly from the bond’s original notional value.
Ruck gives the example of a US$1 billion convertible bond issued when the underlying company’s share price was substantially lower. If the share price subsequently rises by 200 or 300 per cent, the equity value obtainable through conversion could reach US$3 billion.
“You may have a bond with a notional value of US$1 billion, but equity worth US$3 billion upon conversion,” he notes. “That is a significant difference.”
Other bonds may remain out of the money and present less immediate economic risk. They still require processing, but visibility into their underlying exposure could allow firms to concentrate resources on the positions with the greatest potential impact.
A tool rather than a solution
AI is beginning to make the documentation underpinning these events easier to process.
Models can ingest prospectuses, notices and amendments, extract relevant terms, and convert information presented in different formats into structured data.
“The area in which AI has helped is that it can read documentation very quickly and store the information,” Ruck informs.
“In the past, somebody would read the document, but they could not remember everything within it. If the information was not stored intelligently, it could not easily be called upon later.”
AI can improve the normalisation of corporate actions data, which has historically been complicated by inconsistent formats and terminology. Information can now be received in different forms and converted into a structure that downstream systems can interpret.
For Ruck, this represents a significant step forward, but it does not remove the underlying risk.
“Once the information is normalised and inside the system, you still need to determine where the risks lie and what needs to be done,” he remarks.
AI can help firms retrieve terms relating to the opening or closing of conversion windows, notice periods, and other contractual conditions.
The technology can also support continuous monitoring by connecting the information contained within the original documentation to subsequent market events.
However, it remains dependent on firms knowing which provisions and exceptions they need to identify.
“Provided we know which quirks we are looking for, we can call upon that information and begin tracking them,” Ruck says.
The difficulty is that voluntary events and convertible bond structures are not entirely uniform. An AI model trained on previous events may struggle when faced with a new contractual feature or an unfamiliar variation.
“AI only learns from what it knows,” he explains. “When something completely new comes along, it needs to learn again.”
Human review therefore remains necessary, particularly where an extracted term could influence a financially significant decision.
“It has not solved the problem from A to Z,” Ruck adds. “The process still needs to continue, but it makes the job much easier because the information required from the document can be found more quickly.
“It is still a tool. It is not a solution.”
Closing the visibility gap
As corporate actions data becomes increasingly structured and accessible, Ruck believes the industry’s next priority should be making the market risk embedded within events more visible.
Although institutions are generally aware that corporate actions can create financial exposure, the size, and location of that exposure may not be apparent to the operational teams responsible for processing the event.
“When an instrument moves from one floor to another, the element of risk does not change,” he observes.
“In most operational areas, that risk may not materialise as market risk. In corporate actions, it absolutely does.”
Greater visibility could help institutional investors, custodians, and asset servicers move beyond treating all exceptions or voluntary events with the same level of urgency.
Instead, teams could use the financial exposure attached to each event to direct human expertise towards the most consequential positions.
“Now that we have come a long way in normalising data, we can begin to look at the next level,” Ruck concludes.
“We need to turn our attention to the risk embedded within corporate actions and make it visible. That would allow far better prioritisation, so human effort is directed towards the right place rather than spread across everything.
“There is a significant visibility gap, and we need to begin closing it.”
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