CSD Working Group on DLT, an association of Central Securities Depositories working on developing reference products using Distributed Ledger Technology, has released product requirements for the proxy voting business case during the International Securities Services Association (ISSA) Operational Committee meeting in London on April 24, 2017.
The document titled “General Meeting Proxy Voting on Distributed Ledger: Product Requirements” contains requirements to all technical aspects of the product:
- Functional requirements for the process, described as a minimal viable product aimed at a generic market, and extension functionality that covers specific local needs of the markets in Russia, South Africa, Switzerland, Chile, Nordic and Baltic countries.
- Non-functional requirements.
- Trust requirements, enabling to provide the value typically associated with DLT-based solutions.
- Baseline data entities, roles and their access rights.
The document aims to provide a complete description of a reference product for proxy voting – one that can be used by business in most markets worldwide. The priorities of the working group were to capture the business value of using DLT in the field of proxy voting without completely reworking established business practices.
Alexander Chekanov, Enterprise Architect at NSD, the leader of the working group, says: «With this effort, we aim to provide clarity to the infrastructure operators and market participants in how to implement DLT-based solutions in their local markets and to create value associated with the technology. Proxy Voting has served as an excellent business case where the advantages are both visible and easy to achieve without causing a major disruption on the market. For NSD in particular, it is one of the many steps that we take to make Russian post-trade infrastructure more open and reliable for both the local market and internationally».
Monica Singer, CEO of Strate, says: «Strate has always maintained that collaboration with key market players and experts leads to the successful implementation of industry-wide projects that add significant value to the markets. Distributed ledger technology has opened the doors to a new world of how people can transact and we’re excited to be an integral part of this journey, where we’re changing history. Together with other working group members, we have embraced this technology to improve the financial markets and are excited at the progress being made on proxy voting using distributed ledger technology».
Javier Jara, Commercial and Legal Affairs Manager at DCV, says: «For the Central Securities Deposit of Chile, it is very important to be part of this project as one of the representatives of Latin America, it implies being in the leadership of projects that use Blockchain technology for Securities Deposits. In particular, this project of Proxy Voting raised the common requirements to all markets, allowing the incorporation of extensions that adapt to other specific markets, so when this project reaches the Chilean market, will already be thought of local needs. We hope to continue working with our colleagues from other Central Securities Depositaries around the world, to increase in the collaboration and support in adaptations and developments in new technologies».
The document has been produced by the working group during the period between October 2016 and April 2017 and involved collaboration between NSD, Strate (South African CSD), SIX Securities Services (European ICSD based in Switzerland), Nasdaq (CSD in Nordic and Baltic region) and DCV (CSD of Chile). The presentation to the ISSA Operational Committee in London on April 24th was the first public reveal of the document.
The group is continuing to work on the business case of proxy voting on DLT. Future updates of the document will be focused on:
- business value distillation for infrastructure operators and market participants,
- standardization and formal alignment with the existing market practices and ISO20022 standard,
- extensions for more markets worldwide.
The latest version of the document is available online on the NSD’s website.
The CSD Working Group on DLT welcomes any feedback or collaboration opportunities from potential partners. To get in touch with the working group, please contact one of the member organizations:
- National Settlement Depository, Russia – Alexander Chekanov, ;
- Strate, South Africa – Tanya Knowles, ;
- SIX Securities Services, Switzerland – Urs Sauer, ;
- Nasdaq, Nordic – Henri Bergström, ;
- Depósito Central de Valores, Chile - Claudio Calderón, .