In order to increase the efficiency of the voting process to ratify company resolutions in company convened meetings and increase the participation of retail investors in the ratification of resolutions, the capital market regulator Securities and Exchange Board of India (Sebi) has decided to enable e-voting to all the demat account holders (equity shareholders) by way of a single login credential. These login credentials will be provided to the demat account holders through their demat accounts or websites of Depositories or Depository Participants (DPs).
As per Sebi regulations, all the listed entities are required to provide remote e-voting facility to their shareholders, in respect of all shareholders’ resolutions. However, it has been observed that the participation by the public non-institutional shareholders/retail shareholders is at a negligible level.
Sebi said, currently, there are multiple E-voting Service Providers (ESPs) providing e-voting facility to listed entities in India. This necessitates registration on various ESPs and maintenance of multiple user IDs and passwords for the shareholders, making the process of participating in e-Voting cumbersome and unattractive.
To overcome these drawbacks, Sebi has decided that all demat account holders would be able to cast their vote without having to register again and again with the ESPs. This will not only facilitate seamless authentication but will also enhance the ease and convenience of participating in the e-voting process by the retail shareholders. This will be implemented in a phased manner, said the regulator.
Under Phase –1, to be implemented within six months from now, as a first option, shareholders can register directly with the depository for e-Voting. Shareholders would be able to access the e-voting page of various ESPs through websites of depositories without further authentication by ESPs for participating in the e-voting process.
Under the second option of Phase-I, demat account holders will have the option of accessing various ESP portals directly from their demat accounts. They would be routed to the webpage of the respective depositories from their demat accounts, which in turn would enable access to the e-voting portals of various ESPs without further authentication by ESPs for participating in the e-voting process.
The authentication of shareholders would happen at the depository level and ESPs shall allow demat account holders to cast their vote based on the validation carried out by the depository. It would send a confirmatory short messaging service (SMS) to shareholders that the vote has been cast based on the confirmation received from the ESP, Sebi said.
The listed entity will be required to provide the details of the upcoming AGMs requiring voting, to the depository. The depository would send SMS/email alerts in this regard, to the demat account holders, at least 2 days before the date of the commencement of e-voting, the circular from the regulator noted.
To make the process of e-Voting more convenient and safer for the shareholders, Sebi said, the depository should validate the demat account holder through a One Time Password (OTP) verification process. Depositories shall allow login through registered mobile number / email based OTP verification as an alternate to log in through username and password.
A second-factor authentication using mobile / e-mail based OTP shall be introduced before the demat account holders can access the websites of the depositories through their demat accounts. These authentication measures should be implemented within 12 months from the completion of the process in phase 1, Sebi said.
The depository may advise the demat-account holders to update their mobile number and email ID to access the e-voting facility. They will also be required to establish a dedicated helpline to resolve technical difficulties faced by shareholders relating to the e-voting facility. Further, the listed company shall ensure that the ESPs engaged by them also provide a dedicated helpline in this regard.
To enable better deliberation and decision making by the shareholders while casting their votes, ESP Portals shall provide specific weblinks to, disclosures by the company on the websites of the stock exchanges and report on the websites of the proxy advisors, Sebi said.
ESPs may continue to provide the facility of e-voting as per the existing process to all physical shareholders and shareholders other than individuals viz. institutions/corporate shareholders.
