National Settlement Depository (NSD), Russia’s central securities depository, reports that it has begun to develop an electronic voting platform for shareholder meetings: e-voting. NSD plans to launch the new service in H1 2017, when the majority of annual general shareholder meetings are held in Russia.
The e-voting platform will enable security holders to remotely participate in physical shareholder meetings, as well as meetings held in absentia. Shareholders will be able to register for a meeting, study meeting materials and vote online by filling out the electronic ballot on a specializd website. Authorization will be conducted using the Unified System of Authorization and Authentication (USAA) of the State Service Portal within the framework of the new platform. Thus, shareholders who already use state services via the portal will have convenient access to the e-voting service.
One of the platform’s primary tasks is to provide all Russian issuers with a single e-voting site. It will allow investors holding securities issued by different corporations to utilize the unified service.
Maria Krasnova, Deputy Chairperson of the Executive Board, NSD, stated: “E-voting is a revolutionary platform not only for the Russian market, but also for most foreign markets, including developed ones. This type of voting already works in Turkey, India, Korea, Taiwan and in some other markets and it has demonstrated its efficiency. E-voting significantly increases the level of shareholder participation (including foreign ones) at annual meetings, and also upgrades market attractiveness for global investors. The biggest challenge we now face is developing and implementing the newest reliable technological solutions for this project.”
The adoption of the Russian Federal Law №210-FZ (in 2015), which legalized e-voting at shareholder meetings, made implementation of the e-voting service possible in the Russian market.
The e-voting platform will give shareholders free access to the e-voting website. They will be able to follow the meeting by either watching video or reading text broadcasting (by their choice) and vote on agenda items. All information required for voting will also be accessible online.
Shareholders will be able to access the platform anywhere in the world; there will be no need for any special technical voting methods. Thus, shareholders will be fully independent when using e-voting resources.
The new service will be available to all shareholders, regardless of where securities are kept – in the register or with the depository. If an investor holds shares of a few companies, he/she will be able to vote using the single platform’s services and will incur no additional expenses.
Issuers and professional market participants
The e-voting platform will be a ready solution that issuers will integrate with their own systems, as well as with their registrar's computer systems.
An issuer and its ballot commission will be able to receive ballots online. Thus, for counting votes and adopting resolutions, the issuer will take into account the votes of shareholders attending the meeting in person, as well as shareholders voting remotely via the e-voting system.
The document interchange between issuers, registrars and the CSD will be based on international ISO formats implemented by NSD as part of corporate actions reform. This will provide the opportunity for straight through processing at all stages of shareholder meetings.
This platform will be convenient for different issuers, including the largest corporations (with thousands of shareholders) and minor companies. The e-voting service will be in high demand if a company’s shareholders live across Russia and abroad.
According to law, the provision of e-voting technology is not a mandatory requirement (as distinct from e-proxy voting), when ballots are transmitted via depositories that service shareholders. Issuers can use e-voting at shareholder meetings on their own volition.
E-voting and e-proxy voting – new technologies providing access to voting at shareholder meetings
E-voting is an electronic voting technology that allows security holders to study materials for the shareholder meeting and vote using the website.
Using the e-proxy voting technology, shareholders exercise their rights to securities via their depository by giving the depository instruction(s) on creating and sending the ballot.
The key difference is that the e-proxy voting technology is available only for shareholders with securities kept in depository accounts, whereas there are no limits on the e-voting technology.