KARACHI, May 29: The apex regulator, Securities and Exchange Commission of Pakistan (SECP) proposes to initiate the concept of e-voting, which envisages a change from the current voter presence in person or by proxy to vote at the Annual General Meetings (AGMs) of companies.

A communiqué by the SECP posted on the KSE-website on Tuesday stated that it was to facilitate the shareholders and benefit from automation in the capital market, that the introduction of e-voting was being considered.

In this context, a concept paper has been prepared by the Central Depository Company of Pakistan Limited (CDC).“The proposed e-voting would essentially be an internet based platform that will enable the shareholders to vote on resolutions proposed by companies without being physically present at the meeting," the SECP explained.

The chief regulator has invited views/comments on the concept paper by June 11, 2012.

The concept paper lists the benefits of e-voting, which include: The implementation of e-voting system would make it possible to monitor the whole voting system in a timely manner; transparency and efficiency will be achieved from e-voting, record keeping, with respect to each voter will be very easy and accurate; results of e-voting will be available immediately after e-voting with 100 per cent accuracy.

As for shareholders, the need for their physical presence or proxy dependency will be substituted with the ease of voting from anywhere and the casting of invalid votes would be minimised.

The concept paper mentions that e-voting system has been developed and implemented worldwide, by various depositories, for achieving efficiency in the voting process involved in company AGMs.

“This process, while it may not completely replace the process of physical voting, does, however, provide another channel for shareholders to exercise their right.”

It results in the increase of overall percentage of voting due to this facility.

At the same time, this process adds a lot of efficiency and transparency in the overall voting process, the concept paper says.

The drawbacks in currently prevalent system, which the e-voting seeks to solve include: In the current voting system, shareholders are required to be present physically at the meeting place to exercise their voting rights.

Due to this limitation of current voting system, it becomes impossible for an investor to participate if he has invested in multiple securities and some of them conduct their AGMs at the same date.

Secondly, from the point of view of minority shareholders it is not always feasible to travel to meeting place, especially where investor is not the part of urban population or meeting place is out of his native city.

Due to this limitation, the current voting system has a low response of just around 10-15 per cent.