The Securities and Exchange Board of India (“SEBI”), in order to increase participation by the public non-institutional shareholders/ retail shareholders and the efficiency of the voting process, has vide its circular dated December 9, 2020 (“Circular”) decided to enable e-voting to all the demat account holders, by way of a single login credential, through their demat accounts/ websites of depositories/ depository participants.  

Pursuant to the Circular, demat account holders would be able to cast their vote without having to register again with the e-voting service providers (“ESPs”), thereby, facilitating seamless authentication as well as enhancing ease and convenience of participating in the e-voting process.  

SEBI has decided to implement the same in a phased manner as under: 

Phase –1: 

a) Following process for e-voting is required to be implemented within 6 months of the date of the Circular:

i. Direct registration with depositories: Shareholders can register directly with the depository and would be able to access the e-voting page of various ESPs through the websites of the depositories without further authentication by ESPs for participating in the e-voting process; or

ii. Through demat accounts with depository participants: Demat account holders will have the option of accessing various ESP portals directly from their demat accounts. They would be routed to the webpage of the respective depositories from their demat accounts, which in turn would enable access to the e-voting portals of various ESPs without further authentication by ESPs for participating in the e-voting process.

b) Depositories will send a confirmatory SMS to the shareholders that the vote has been cast based on the confirmation received from the ESP.

c) Listed entity will provide details of the upcoming annual general meetings (“AGMs”) requiring voting to the depository. Further, the depositories will send SMS/ email alerts in this regard, to the demat account holders, at least 2 (two) days prior to the date of the commencement of e-voting. 

Phase –2:  

a) In order to further enhance the convenience and security of the e-voting system, the depository will validate the demat account holder through a One Time Password (“OTP”) verification process as under:

i.          Direct registration with depositories: Depositories will allow login through registered mobile number/ E-mail based OTP verification as an alternate to login through username and password.

ii.         Through demat accounts with depository participants: A second factor authentication using mobile/ E-mail based OTP shall be introduced before the demat account holders can access the websites of the depositories through their demat accounts.

The above is required to be implemented within 12 months from the completion of process in phase 1.

b) Depositories will have to establish a dedicated helpline to resolve technical difficulties faced by shareholders relating to the e-voting facility. Further, the listed companies are required to ensure that the ESPs engaged by them also provide a dedicated helpline in this regard.

c) In order to enable better deliberation and decision making by the shareholders while casting their votes, ESP Portals will provide specific weblinks to the following:

i. disclosures by the company on the websites of the stock exchanges; and

ii. report on the websites of the proxy advisors. 

Applicability:

a) The aforementioned facility is available to all individual shareholders holding securities in demat mode.

b) ESPs may continue to provide the facility of e-voting as per the existing process to all physical shareholders and shareholders other than individuals namely institutions/ corporate shareholders. 

Please find the copy of the Circular here.

This update has been contributed by Aastha (Partner) and Swaraj Narula (Associate).