To provide Taiwan market with full mechanism for shareholders to execute their voting rights, TDCC has completed the implementation of e-voting platform, STOCKVOTE in 2009 by following the order of competent authority.
Issuers, after signing contracts with TDCC, will be able to offer electronic voting services to their shareholders through the platform, which will have the same effect as attendance in person at general meetings. By utilize the Internet as its user interface, STOCKVOTE allows investors to log in to the system for voting with secure ID check mechanism, i.e., identification by user’s CA (Certificate of Authentication). Following the launch of this new platform, shareholders will be able to exercise their voting rights regardless of distance, and concentration of general meetings. Each voting record is embedded with a digital signature of CA. There will also be a full audit trail for those e-voting record.
On receiving a notice of general meetings, shareholders would be advised whether the company has provided electronic voting services. Alternatively, the shareholder may access the website of STOCKVOTE (https://www.stockvote.com.tw/) to get to know if the company adopts TDCC’s “STOCKVOTE” for their general meetings. After logging in to the system with CA, the shareholder may choose the specific company and input his/her/its Shareholder Account Number to access the agenda and related details of the general meetings, and then exercise their rights through electronic voting for those proposals.
For foreign institutional investors and mutual funds, e-voting can be done through their agents or representatives such as custodian banks and securities investment trust firms (SITEs), etc. Apart from using CA to verify the identity of these agents/representatives, TDCC also designed the confirmation mechanism of voting contents for these agents/representatives to meet their internal control. Furthermore, online voting and batch voting are also available for these agents/representatives to make the operation more convenient.
Automated corporate action information transmission
In order to enhance the operating efficiency of the market, TDCC established C.A.Net, a dedicated corporate action information website in April 2013 upon the approval of the competent authorities. The purpose of C.A.Net is to provide electronic corporate action services (excluding voting) for depositories and issuers’ corporate action units.
With more companies going public on the TWSE and TPEx markets, depositories and the corporate action units of issuing companies had to put in a huge workforce to manually process information of dividend distribution and tax benefits and keep foreign investors informed, either by email, facsimile or inquiry letter, and a standardized operating procedure was nonexistent. As such, in March 2014, TDCC incorporated into C.A.Net a system of information transmission between depositories and the corporate action units for matters regarding dividend distribution and tax benefits, and provided a standardized operating procedure and message format to ensure safe, efficient and convenient exchanges of information between depositories and issuers, consequently improving the market efficiency and reducing the operating costs and risks.
Straight Through Process (STP) service
Given the recommendation of the Asian Corporate Governance Association (ACGA) in its 2011 annual report that Taiwan should establish a STP mechanism to facilitate participation in corporate actions and voting by foreign shareholders, and in response to the Corporate Governance Blueprint laid out by competent authorities, TDCC had worked with Broadridge, the largest international voting platform provider, on automated transmission before introducing our own STP mechanism in December 2014 to provide various services including (a) review of holdings statement for domestic depositories and the corporate action units of issuing companies; (b) forwarding of English meeting agendas on behalf of depositories; and (c) receipt of voting instructions from clients of depositories from overseas and the subsequent data processing.
To expand the service scope for foreign investors, TDCC entered into the partnership with Institutional Shareholder Services (ISS), the second largest international voting platform provider, connecting directly to ISS via STP mechanism to receive voting instructions from ISS' global custodian clients. The partnership enabled more foreign investors to participate in shareholder meetings and improved the competitive capability of Taiwan’s capital market.
With the STP mechanism in place for cross-border voting by foreign investors, depositories and issuers can create standardized, automated and streamlined operating procedure as far as voting is concerned. The improved voting efficiency will reduce the risks and costs of market operations. Investors now have more time (2-4 extra days versus without STP) to vote, and issuers also have more time to win the support of foreign investors for their proposals.