Proxy Voting

"The directive establishes a series of measures meant to benefit both listed companies in the European Union (EU)/European Economic Area (EEA) and their shareholders by enforcing greater transparency and efficiency in terms of shareholders’ identification and rights to vote. It also aims to improve communication by the issuers – through the chain of intermediaries – to their shareholders." source: Standard Chartered.

Market
With the implementation of Shareholder Rights Directive II (SRD2), there is an increasing regulatory demand to encourage long term shareholder commitment and discourage excessive risk. The main objective of this directive is to improve transparency and facilitate shareholder engagement. The directive sets the right to identify shareholders and mandates intermediaries like custodians to take an active role in providing information. SRD2 also aims to facilitate the process of voting and exercising other shareholders’ rights on an international level, by requiring intermediaries to transmit corporate actions and general meeting or proxy voting announcements without any delay.

Opportunity
Tokenization provides a possible solution for custodians and intermediaries to comply with this directive, by having direct access to a single source of truth and a consolidated overview of all asset holders. Whilst providing opportunities to offer more services to encourage shareholder engagement and data analyses.