Taiwan Depository & Clearing Corporation

To improve corporate governance and safeguard shareholders’ rights, in recent years Financial Supervisory Commission (FSC) has been actively promoting e-voting in listed companies and the results have been spectacular. On Jan 18, 2017, FSC announced that as of 2018, all listed companies should adopt e-voting as one of the measures to exercise voting rights at shareholders’ meetings.

The custodian banks which are foreign investors’ proxy at domestic shareholders’ meetings believe that the policy will promote corporate governance and introduce foreign investments into domestic securities market. First of all, e-voting can reduce the risks of custodian banks’ appointment of domestic proxy for shareholders’ rights execution at shareholders’ meetings; it also cuts down personnel and paperwork costs of custodian banks’ proxy attendance at shareholders’ meetings. In addition, TDCC’s StockVote platform offers ballot track as voting proof; from August 31, 2016, the duration of e-voting inquiry has been extended from 90 days after shareholders’ meetings to one year. Custodian banks can employ e-voting to preserve ballot track as voting proof for foreign investors’ reference, which also greatly enhances operation efficiency.

Besides e-voting, TDCC further provides Straight Through Process (STP). TDCC has built direct connections to Broadridge so as to elevate efficiency of data transmission and processing for the company’s clients’, that is, custodian banks. In 2016, TDCC processed a total of 1702 companies’ English bills and nearly 90,000 ballots from foreign investors, which covered 90 % of foreign investors’ data. Custodian banks point out that STP effectively boosts overall market efficiency, integrates with international system, and improves operation procedure of shareholders’ meetings between custodian banks and stock affairs units.

Most important of all, through e-voting, listed companies all adopt the method of voting by case, which raises the percentage of board member and supervisor nomination, and thus the transparency of voting improves as well. Obviously, e-voting not only has a positive effect on the improvement of corporate governance but also benefits the introduction of foreign investments into the market in Taiwan.