Exercise Shareholder Rights Without Attending an AGM ... Korea Securities Depository (KSD) Unveils Electronic AGM Platform

[Financial News] Ahead of the launch of electronic general meetings of shareholders next year, KSD has unveiled eVOP, an electronic voting rights platform that supports everything from advance electronic voting to real-time questions and voting on the day of a shareholders’ meeting. The platform supports foreign shareholders’ online attendance and movement between the meetings of multiple companies, and incorporates security measures on par with those used in electronic registration and settlement systems.
The Ministry of Justice and KSD held an event on the introduction of electronic general meetings of shareholders and the platform launch on the 4th at the Four Seasons Hotel in Jongno District, Seoul. Under the revised Commercial Act, which takes effect on January 1 next year, around 210 large listed companies with total assets of 2 trillion won or more will be required to hold in-person and electronic shareholders’ meetings in parallel.
eVOP adds real-time participation on the day of a shareholders’ meeting to the existing advance electronic voting service. Shareholders can apply to attend by 5 p.m. on the day before the meeting using a PC, smartphone or other device. On the day, they can listen to company presentations and ask questions by text, or request the floor and ask questions orally. The platform also supports online attendance by shareholder proxies.
Procedures for foreign shareholders to participate will also be improved. Previously, complex communication channels involving standing proxies and others meant they had to exercise their voting rights 9–10 days before a shareholders’ meeting. They also faced restrictions on electronic voting because it was difficult to use domestic identity verification methods. Going forward, they will be able to access electronic shareholders’ meetings using a shareholder identification number and password issued after an application by a standing proxy and confirmation by the listed company.
KSD President Lee Yun-su said, “Foreign shareholders will now have a way to exercise their voting rights on an equal footing with domestic shareholders,” adding, “For major agenda items that require in-depth review, shareholders will be able to exercise their rights flexibly up to the day of the meeting, dramatically increasing the time available to review the items.”
Based on a business agreement with Broadridge, KSD also plans to establish a linked system to support advance electronic voting by foreign investors. In the long term, it will also consider ways for domestic investors to exercise voting rights in overseas companies.
Lee explained, “This means Korean retail investors who invest in overseas stocks exercising their voting rights in global companies such as Nvidia and Tesla through KSD’s voting rights platform.”
He emphasized that security and stability had been made the top priorities in preparations amid recent hacking and data breach incidents in the financial sector. KSD has also applied to eVOP the security framework used in key operational systems, including electronic registration and settlement, as well as its triple-redundant data storage system. It prepared the infrastructure for peak-season traffic based on the assumption that every listed company subject to the requirement would use the service.
Lee emphasized, “We approached this with the determination to ensure stability and security at least on a par with the current securities depository and settlement system,” adding, “Internally, I was determined that if there were an outage, I would have to resign, wouldn’t I?”
KSD has also put measures in place to prevent outages, including streamlining functions in the event of a surge in users. It will continue testing with listed companies ahead of their regular shareholders’ meetings in March next year, and plans to hold a pilot electronic shareholders’ meeting in December with the Ministry of Justice and the Korea Listed Companies Association.
The scope of responsibility for listed companies and KSD in the event of an incident will be specified during the contracting process. Lee said, “Many people’s assets and rights are at stake,” adding, “We will work harder to make sure nothing like that happens.”
[email protected] Bae Han-geul Reporter