Cross-Border Shareholder Vote Settlement

The traditional process involves multiple intermediaries (custodians, brokers, proxy advisors), creating delays, errors, and high costs. Blockchain-based voting creates a single, immutable record of ownership and vote instructions, cutting settlement from days to minutes. This directly reduces operational costs and audit complexity.

• Example: Broadridge's distributed ledger repo platform demonstrates a 90% reduction in reconciliation efforts for repo transactions, a model applicable to voting.

Lost votes and opaque processes undermine corporate governance. A permissioned blockchain provides an end-to-end, tamper-proof audit trail. Each vote is cryptographically signed and timestamped, visible to authorized parties (issuer, investor, regulator). This eliminates disputes and strengthens compliance with regulations like SRD II.

• Real-World Path: The Australian Securities Exchange (ASX) is replacing its CHESS settlement system with blockchain to provide real-time, verifiable ownership tracking.

Issuers and investors currently wait weeks for final vote results. Smart contracts can automate the tallying process, providing real-time, aggregated results to the issuer while maintaining individual voter confidentiality. This allows for faster corporate actions and more dynamic investor engagement.

• Industry Momentum: Nasdaq's Linq platform has been used for private market securities management, showcasing the model for transparent, instantaneous record-keeping.

The manual, multi-party process creates significant cost layers. Process automation via smart contracts removes redundant validation and messaging steps. Cost savings are realized across custodial fees, proxy processing, and internal operational overhead.

• ROI Justification: A major European bank's blockchain pilot for bond issuance showed a potential 30% reduction in total issuance costs—a framework directly applicable to vote settlement lifecycle management.

Global voting requires navigating a patchwork of local regulations and formats. Blockchain can embed compliance rules directly into smart contracts, automatically validating votes against jurisdictional requirements. This reduces legal risk and operational burden for global asset managers and their service providers.

• Example: The Hong Kong Monetary Authority's blockchain trade finance platform, eTradeConnect, automates compliance checks, demonstrating the model for complex, rule-based financial processes.

Adoption is happening through industry consortia and incremental integration. The key is not a full rip-and-replace but strategic integration with existing systems (like DTCC or Euroclear) to create a shared source of truth.

• Current State: Projects like the Bond-i bond issuance by the World Bank on a blockchain platform prove the operational and investor acceptance of the technology for regulated securities.

Current systems rely on a chain of intermediaries—custodians, proxy advisors, vote tabulators—each with separate ledgers. This creates:

• Multi-day settlement delays (T+2 or more).
• High error rates from manual reconciliation.
• Lack of transparency: Shareholders cannot verify if their vote was counted as cast.
• Example: A 2022 Broadridge study found manual processes and data mismatches are the top challenges in global proxy voting.

The financial justification is clear through operational efficiency and risk mitigation.

• Cost Reduction: Automating manual reconciliation and communication between custodians can reduce administrative costs by 30-50%.
• Capital Efficiency: Faster settlement (T+0) frees up capital tied in collateral for custodians.
• Risk Mitigation: Eliminates costly errors, disputes, and potential fines from failed vote execution or reporting.
• Strategic Value: Enables new shareholder engagement models like real-time voting on ESG initiatives.