AST has successfully completed a scaled pilot of its blockchain-enabled proxy voting and tabulation network, developed through its strategic partnership with blockchain specialist firm NuArca.
The pilot was designed to test the solution’s ability to scale efficiently and economically to support the volumes and speed of transaction required in large-scale proxy campaigns while validating accurate and immutable ledgers of vote transactions. The scale of the test spanned more than 400 securities and eight million shareholders representing more than one trillion shares. During the pilot, the solution reached processing speeds of over 100 transactions per second. When the service launches in March 2018, it will be one of the few live solutions of this scale using distributed ledger technology (DLT) in the market.
“AST is committed to the development of leading technology solutions that will transform and disrupt the industry,” says Brian J Longe (pictured), President and Chief Executive Officer of AST. “As we look to the future, we will strategically deploy emerging technologies like blockchain to improve the speed, accuracy and transparency of business processes for all market participants.”
The proxy voting network utilises Hyperledger Fabric and will be deployed as a cloud service. With its blockchain record-keeping and tabulation engine, and blockchain network, AST’s proxy solution will create a new pathway for simplifying and decreasing the cost of proxy vote obligations for issuers, brokers, intermediaries and custodians.
In addition to the success noted in blockchain transaction-processing speeds and scale, the solution also presents an enhanced issuer UX that provides greater access to information, transparency to the process as well as analytics to support campaign forecasting and management – all optimised for mobile. The shareholder voting platform has also been redesigned to provide a clear, mobile-friendly interface that simplifies the voting process.
“A key concern with blockchain or DLT solutions in financial services in the past has been their ability to scale enough to cope with the volumes that an everyday financial solution needs to handle,” says Todd Cooper, Managing Director and Co-Founder of NuArca. “By successfully completing this pilot, we have shown that our proxy voting system will be able to meet the needs of even the largest campaigns without compromising on transparency or reliability.”
Apart from feedback-driven fine-tuning, the successful pilot marked the last major developmental hurdle for AST’s blockchain-enabled solution. This is a major milestone in AST’s planned rollout of DLT-enabled solutions across its range of client-facing offerings, from proxy voting to record-keeping. AST and NuArca intend to continue the strategic partnership to develop additional offerings that take advantage of the companies’ combined expertise.
“AST is already a leading provider of proxy solicitation, annual general meeting and proxy tabulation services,” says Sue Lawrence, Chief Marketing and Strategy Officer of AST. “We recognised the applicability of blockchain to the complex proxy voting infrastructure and saw an opportunity to revolutionise the industry with this service. Our objective is to create a process that promotes efficiency, accuracy and data security in every campaign by establishing direct connectivity across parties.”
