Sebi proposes new mechanism to make e-voting convenient for shareholders

Regulator Sebi on Thursday proposed two mechanisms to make the e-voting process more secure, convenient and simple for shareholders.

At present, multiple players provide e-voting facility to listed entities in the country and shareholders require to register and maintain multiple user IDs and passwords with them, the Sebi noted in a consultation paper.

To enable e-voting through a single login credential, Sebi after consultation with the depositories and ESPs suggested a mechanism wherein demat account holders may access e-voting portals of multiple ESPs through web-based services provided by depository participants or depositories.

"There are multiple e-voting service providers providing e-voting facility to listed entities in India. This necessitates registration on various ESPs and maintenance of multiple user IDs and passwords by shareholders. Multiple login credentials, apart from being cumbersome for the shareholders to remember, are also prone to misuse," Sebi said.

Sebi has proposed authentication of shareholders at the depository level and ESPs shall allow the demat account holders to cast their vote based on the validation carried out by the depository.

To enable demat account holders to cast vote on different ESP portals without having to register again with the ESPs, Sebi has proposed two mechanisms.

Sebi suggested direct registration with depositories wherein, after the initial one-time registration, shareholders would be able to access the e-voting facilities through mobile or e-mail based OTP verification. Shareholders would be able to access the e-voting links of ESPs without further authentication by ESPs for participating in the e-voting process.

Alternatively, demat account holders will have the option of accessing various ESP portals directly from their demat accounts, through the facility provided by the depository. The depositories may authenticate the investors through mobile or e-mail based OTP verification for allowing such access.

Thereby, shareholders would be able to access the e-voting links of ESPs without further authentication by ESPs for participating in the e-voting process.

Depositories shall share necessary details of the demat account holders with other ESPs and similarly, ESPs shall also share the electronic logs and other related information with respect to the e-voting transactions with the depositories.

"This facility shall be available to all the shareholders holding the securities in demat mode. ESPs may continue to provide the facility of e-voting to physical shareholders as per the existing process," Sebi said.

Sebi said that depositories shall establish a dedicated helpline to resolve technical difficulties faced by shareholders relating to the e-voting facility.

Besides, it added that ESPs shall send the details of the vote cast to the shareholders via SMS or e-mail.

Comments on the proposal have been sought from the public by March 31, 2020.