SWIFT today announces a proof-of-concept (PoC) on e-Voting, using distributed ledger technology (DLT) to provide a more efficient and transparent management of the proxy voting process for shareholder meetings.
SWIFT is conducting the PoC with leading securities software provider SLIB and the Singapore Exchange (SGX), along with Deutsche Bank, DBS, HSBC and Standard Chartered Bank.
The PoC will explore whether DLT can help simplify the currently inefficient management of shareholder meetings and the associated voting processes that are often time-consuming and resource intensive. Proxy voting in particular often results in avoidable complexity and errors that could be eliminated through greater transparency and automation.
As a cooperative for the financial community, SWIFT will facilitate the PoC in its DLT sandbox testing environment with Deutsche Bank, HSBC and Standard Chartered Bank joining as participants, while DBS and SGX join as both participants and issuers. The participants will reuse the SWIFT network and their existing SWIFT infrastructure and interfaces to access, test and validate the applicability of DLT.
The PoC, which will run during the first half of 2019, is designed to:
- Test the deployment of a voting solution in collaboration with issuers and a Central Securities Depository (CSD), where the information is stored and managed on a permissioned private blockchain.
- Demonstrate the viability of hybrid solutions based on ISO 20022, combining messaging and DLT to foster interoperability and avoid market fragmentation.
- Test SWIFT’s capacity to host third-party applications in its sandbox and reuse its security and interface stack.
- Confirm the use of ISO 20022 as the foundation for standardising for Application Programming Interfaces (APIs) that expose DLT node contents to parties with direct access to the ledger.
Lisa O’Connor, Managing Director, Securities, Treasury & Standards, Asia Pacific at SWIFT said, “The expression of shareholders’ rights is often limited today by non-transparent, complex and inefficient paper-based processes. The emergence of blockchain technology is a new opportunity to look at improving these processes. It is also an opportunity for SWIFT to offer flexibility in the adoption of this new technology through the re-use of ISO 20022 based solutions together with a high level of security and resilience that our industry requires.”
Onur Ozan, Head of Middle East, North Africa and Turkey at SWIFT, said: “The e-Voting PoC is a great example of advanced problem solving and of what SWIFT does best; helping the financial community to adapt to a rapidly changing landscape. The PoC will help improve efficiency, transparency and eliminate errors and could transform the way shareholder voting takes place in the future.”
Tony Lewis, Head of Securities Services, HSBC, said: “Shareholder voice in corporate decision-making is stifled by the existing paper-based voting process. Technology is the solution to enhancing shareholder say. e-Voting using DLT has the potential to create greater efficiencies, transparency and participation. Through collaboration amongst key market players, the PoC has a real opportunity to revolutionise security services in Singapore. As the world’s most innovative investment bank, we are delighted to be contributing to another project building on the Republic’s position as a global fintech hub.”