The prospect of applying blockchain technology to the proxy voting process has become more likely after Broadridge, one of the biggest providers of investor-related services, was awarded a patent for this very purpose.
US Patent No. 9,967,238 will be used to enhance proxy voting by adding more transparency and efficiency and allowing for more detailed insights into vote totals and progress against proxy timelines stated Broadridge's vice president of corporate strategy Horacio Barakat.
The patent could also be used to apply the same technology to repurchase, or repo agreements, said Barakat.
The proxy voting process has long been a source of frustation for investors, pension funds and fund managers alike due to the long chain of intermediaries, the operational inefficiency and the opaqueness of the process. This has meant that some investors are not always able to tell if their proxy vote has been cast.
At a time when pension funds and institutional investors are being called on to take a more active and accountable role in shareholder issues, the problems with proxy voting have become a top priority for multiple service providers.
Furthermore the merits of distributed ledger technology appear to be well suited to this particular issue and a number of industry participants have been working towards a live e-proxy voting system based on DLT.
Consequently there has been a race among various providers to file patents and launch pilots.
Back in November a working group of central securities depositaries (CSDs), comprising Cleartsream, Strate, Nasdaq, NSD and Swift, predicted that such a product could go live soon.
Meanwhile in late April Netherlands-based custodian Kas Bank announced the pilot of a blockchain-based shareholder voting system which it tested at its own annual general meeting.