The project concluded the using distributed ledger technology results in the reduction or elimination of complex reconciliation processes.
Broadridge Financial Solutions has successfully conducted the first Proof of Concept (PoC) of blockchain-based proxy voting in Japan together with ICJ, a joint venture of the Tokyo Stock Exchange (TSE) and Broadridge.
The project, which used Quorum as the underlying distributed ledger technology (DLT), was developed specifically for the Japanese proxy market. The solution mirrored the proxy voting processes which included unique file transfer protocols on the ICJ electronic voting platform.
ICJ-participating issuers represent 87% of the TSE First Section market cap, 97% of Nikkei 225 index constituents and 84% of Japan Exchange Group (JPX)-Nikkei Index 400 constituents.
Patricia Rosch, President of Investor Communication Solutions, International at Broadridge Financial Solutions, commented:
“The successful completion of the Japan market DLT-based voting platform PoC builds on our investment in leading-edge technology solutions in the investor communications space. The Japan project validated our view on how an interoperable blockchain platform can play a central role in raising corporate governance by creating end-to-end vote transparency and driving operational efficiency in light of the unique processing requirements in Japan.”
ICJ Incorporated is a joint venture company of TSE and Broadridge, which operates an Electronic Voting Platform for Foreign and Institutional Investors. Shigeo Imakiire, President, ICJ Inc., said:
“The PoC is the first step to deploy and utilize this new technology, and we will continue to pursue a path in enhancing the efficiency and transparency of the voting process in Japan, which involves a variety of domestic and global market players.”
The PoC was validated in a test environment in which the role of local custodians, global custodians, the central securities depositary, and local transfer agents was simulated. The official statement said the final positions of these organizations were loaded on the ledger and reconciliation was performed using smart contracts.
As a result, Broadridge and ICJ found that the ledger can be used for performing position management and be used as the single source of truth for subsequent data reference needs, resulting in the reduction or elimination of complex reconciliation processes.