Thousands of small investors will soon get an opportunity to cast their votes on crucial corporate actions till the last minute, from the comforts of their home or office.
Electronic voting (e-voting), launched a little over two years earlier, is set to get a boost after platforms provided by the country’s two depositories, Central Depository Services Ltd (CDSL) and National Securities Depository Ltd (NSDL), have been certified for user-friendliness and security in facilitating such transactions.
Last May, the Union ministry of corporate affairs (MCA) made its approval mandatory for agencies appointed to provide and supervise an e-voting platform. It also asked these agencies to obtain a certificate from the Standardisation Testing and Quality Certification (STQC) directorate, an attached office of the department of information Technology.
|HOW E-VOTING WORKS FOR INVESTORS|
The e-voting systems of CDSL and NSDL, approved by MCA, have now also secured STQC certificates. The delay in getting this was a key hurdle behind the slow response for an e-voting system, say officials.
“We received the STQC certificate about a week or 10 days back. So, we now expect more companies to sign-up for the e-voting facility,” P S Reddy, executive director at CDSL, told Business Standard last week. CDSL was the first to launch an e-voting system in India, in November 2009.
As of now, six companies, including Jaiprakash Associates and Tata Metaliks, have used CDSL’s e-voting platform. There are 20 more that have signed for this facility, Reddy says. Tata Motors has also shown interest in using e-voting and has taken the demonstration, according to a senior official at a depository.
NSDL, India’s largest depository, launched its e-voting platform on January 25. It received an STQC certificate on January 19. “We are completely ready with our system. If the company walks in on Tuesday, it can straightaway go ahead with e-voting,” said Nitin Ambure, vice-president at NSDL. He said they were in talks with companies and had already presented the demonstration to some.
Even global players are keen to enter the e-voting business in India. US-based Broadridge Financial Solutions, which provides a voting platform to global investors, is waiting for MCA approval to launch its platform. “At present, the MCA has shortlisted only two players for e-voting, as it's a new concept in India. They will see how it does and then open it to other players,” said V Laxmikanth, managing director of Broadridge Financial Solutions India.
Experts believe the e-voting system is expected to grow, as it is convenient and user-friendly. However, it is only available to individual investors at present.
"Investors who have registered for e-voting can just click and exercise their voting rights. They can cast their vote on the last minute of the day through e-voting, which they can't do in a physical postal ballot," said Sanjeev Nandu, director-operations at Link Intime India, a leading registrar and transfer agent. “As of now, we are providing e-voting services to individual investors only. In the case of institutions and corporate bodies, identification of authorised persons is not possible through e-voting.”
The system will also result in cost-saving for companies. According to officials, on the average, companies have to spend Rs 20 per shareholder in stationary and postage to conduct voting through postal ballot.
“E-voting is a win-win system for both small investors and companies. It’s eco-friendly and cost-effective for companies,” said Hinesh Doshi, vice-president of Investors’ Grievances Forum (IGF), a Securities and Exchange Board of India-recognised investors' association. “Participation of retail investors in deciding resolutions of companies will at least double in e-voting.”