SWIFT has announced a proof-of-concept (PoC) on e-Voting, using distributed ledger technology (DLT).
SWIFT said it will jointly conduct the PoC in the Asia Pacific region, 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. 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.
According to a statement ftrom SWIFT, 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.
According to Lisa O’Connor, Managing Director, Securities, Treasury & Standards, Asia Pacific at SWIFT, 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,” O’Connor said. “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,” she added.
Proxy voting remains today an untapped area for asset servicing automation, with many paper-based processes, according to Jyi-chen Chueh, Executive Director and Head, Custody Services, Standard Chartered Bank. “Enhancing market best practices through industry collaboration sits at the very core of our DNA at Standard Chartered,” said Chueh. “The co-design of an e-Voting market utility which combines blockchain technology with ISO standards could pave the way for game-changing benefits for both the investor and issuer communities,” Chueh added.