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CSD Blockchain Consortium Advances Work on Proxy Voting System

A blockchain consortium backed by a group of central securities depositories (CSDs) is pushing ahead with plans to develop a distributed ledger-based proxy voting system.

The CSD Working Group on DLT was formed earlier this year by a group of companies – chiefly responsible for storing huge amounts of financial instruments – that are looking to apply the technology to their operations. The consortium, which includes Russia’s National Settlement Depository (NSD), as well as central securities depositories from South Africa, Switzerland, Sweden, Chile, Argentina and the United Arab Emirates, announced this week that it has outlined the technical requirements for a proxy voting platform to be used in shareholder meetings.

The details were shared during a recent workshop which included IBM, Hyperledger and SWIFT, among other companies. SWIFT assisted in ensuring the document adhered to the ISO 20022 standard. They did not announce which company would develop the platform.

According to the project’s outline, the group hewed to the ISO 20022 standard – used for financial maessages – in an effort to ensure that the final product can be applied across a broad spectrum of services.

Their ultimate goal is to create an e-proxy voting system which is both secure and transparent. The system would automatically allow or disallow voting privileges for members based on what voting rights they had within a particular organization. Minority stakeholders would not have as many rights as majority stakeholders, according the previously revealed plans.

“One of the key responsibilities of NSD as a systemically important Russian infrastructure is to define unified standards that enable implementation of new digital products both international and Russian markets,” Eddie Astanin, chairman of NSD’s executive board, was quoted as saying. “It appears that together with our partners we have managed to create a good working format and cooperation atmosphere aimed at creating new services and lowering the costs for the clients of CSDs.”

Voting box image via Shutterstock

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Russia's Central Depository Trials Hyperledger for Bond Trading

The National Settlement Depository (NSD), the central depository for Russia’s largest securities exchange group, has announced it is testing a new commercial bond trading platform built on top of the Hyperledger blockchain consortium’s Fabric software.

Already, Raiffeisenbank Russia has used the prototype platform to purchase $10 million-worth of bonds of MegaFon, the country’s second-largest mobile phone network. The bonds have a redemption date of December 22 and, despite the short-lived nature of the test, the NSD concluded that the technology could help keep the process “simple and transparent.”

“The ultimate goal [of the] NSD is to build blockchain infrastructure for any innovative financial product to operate on. Once the infrastructure is created, [the] technology holds potential to deliver a large variety of financial products and services operated by smart contracts,” Eddie Astanin, chairman of the NSD’s executive board, said in a statement.

Notably, the central depository operator has made the code behind the project open source on GitHub. California-based software firm Altoros also took part in developing the prototype platform.

The project adds to the slate of initiatives already underway at the NSD, including a cryptocurrency wallet as part of a broader suite of services.

“Our goal is to create a secure and user-friendly accounting infrastructure for digital assets,” Astanin said in a statement at the time.

The Linux Foundation-led Hyperledger consortium takes a focus on building blockchains for enterprises, and has so far signed up more than 130 members. Notably, it issued the Fabric software’s official release candidate in June, framing it as an important step towards a finalized version 1.0 launch.

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