National Stock Exchange of India Limited (NSE) has announced that it is conducting tests to use blockchain for E-voting for listed companies on Elemential Labs platform.
It was in July 2012 when stock market regulator SEBI decided to make it mandatory for top 500 listed companies to facilitate E-voting, making it easier for shareholders to participate in key decisions without being physically present in the meetings.
E-voting is performed through the electronic voting system developed by National Securities Depository Limited (NSDL) and CDSL Ventures Ltd (CVL). In case of e-voting, there is no physical collection and counting of postal ballot papers. Also, there is no need for verification of signatures of the shareholders who have exercised their votes.
Further, Mumbai-based Elemential is a blockchain middleware for enterprise. While the founders Raunaq Vaisoha, Anil Dukkipatty, Sahil Kathpal and Aaryaman Vir Shah dub Elemential as the WordPress of the blockchain space, Elemential products are sector agnostic and are being used to create a KYC utility by NSE, enable instant allotment for asset registries, manage royalty payments for media licenses.
NSE is now looking to enhance the transparency in the E-voting process with Elemential Labs. The Systems Integrator (SI) partner is NSE IT, which is in charge of building and managing the front-end application.
The pilot, which has been conducted would involve setting up a blockchain to connect the regulator with the company and the Register and Transfer agent (RTA) during the voting process.
The voting rights will be tokenized, thus making them easy to transfer and proxy. The test will be evaluated on the auditability of the actions on the chain as well as the ease of conducting the process using blockchain.
Sankarson Banerjee, CTO-Projects, NSE said, “The immutable nature of blockchain will ensure that every action taken by a network participant is transparent to the regulator. Additionally, the smart contract framework enables synchronisation of the vote count process between the company and the regulator in real time. These features will take us closer to an environment of improved corporate governance and compliance.”
The blockchain will be built using the Elemential platform on the Hyperledger framework. According to Elemential Labs CEO Raunaq Vaisoh, Hyperledger has recognised that in order for blockchain to get mainstream adoption in the enterprise world, it has to separate itself from permissionless ledgers like Bitcoin and Ethereum. Distributed systems require trust between parties to succeed.
He further added, “Blockchain enables a real-time, immutable trail of all activities for the regulator. This brings us a step closer to highly transparent and clear corporate governance; an operating standard that most companies aspire to.”
The blockchain has usually been introduced so far in the context of cryptocurrencies in a wider term. While the crypto debate is still on worldwide, blockchain as a technology is steadily making its mark in different sectors.
Most recently, IT solution provider NIIT Technologies launched Chain-m, a blockchain-based solution for airlines that aims to make transactions more simplified when buying air tickets.
At the same time, Government think-tank Niti Aayog has hired US-based tech giant Oracle Corporation to implement a pilot project to put the entire stock of medicines made in India on the blockchain with an aim to combat fake and spurious drugs. The work on the project is expected to commence by November.
Also, at present several states including Telangana, Karnataka, Andhra Pradesh, Rajasthan, Maharashtra and Kerala have already published a whitepaper, or working on the PPP model of blockchain projects in egovernance and other projects.