Strate innovates with E-voting portal to ease proxy voting

Proxy voting in South Africa, and to a lesser degree in the wider world, has always been a largely manual process. Certain participants within the process have attempted to automate their involvement, but the overall process is still reliant on manual processes and the “four-eyes” principle.

Now, in an innovative move, Strate, South Africa’s central securities depositary, has collaborated with Nasdaq to bring an electronic voting (E-voting) solution to South Africa, taking proxy voting to a new level and offering a market-wide solution. This new solution is now live, having reached the final stages of development and testing in late 2019. Strate asked fund administrator Maitland to test-drive the system.

A key feature of the new solution is a single platform connecting all participants, right from the issuer through to the asset holder needing to vote. Built on the Chain blockchain technology, E-voting uses the “smart contract” and “digital ID” concepts of blockchain and links issuers and registrars to the asset owners through the current complex registers managed by depositories, custodians and asset administrators.

These “smart contracts” allow each participant in the chain of ownership to allocate assets to sub-owners in near real time Web User Interface  and Application Programming Interfaces (API). Asset owners are then able to interface or load their votes in actual real time to the event or meeting. The platform allows for a detailed audit trail of all actions and provides a highly secure solution to the market.   

This is a major step forward long in the making.

Specifically, having the resolutions to be voted on loaded to the platform removes a significant amount of manual intervention in the process by employees, and simultaneously ensures that all parties – including the custodians – are referencing the same resolution when interacting. With the central securities depositary participants (CSDP)s also on-board, the system eliminates the need for staff to upload elections to various portals or fax elections to various locations, and instead provides one point of access to achieve all requirements.

For asset owners wanting to handle their own proxy voting requirements, the new platform allows them to choose and track their elections directly on the platform, and ensure that these elections roll-up through the levels directly to the meeting secretary for tallying.

There is a way to go still with market-wide implementation of the offering, but the early indications are that the Strate E-voting solution will be a market changer for the good.

Paul Ferreira is Senior ICT Architect at Maitland