Electronic Voting Platform, etc.
Toward Increasing Participation by Institutional Investors
In 2010, ICJ launched "Arrow Force“, a website listing convocation notices for institutional investors, in an effort to increase the number of institutional investors participating in general shareholders' meetings. In addition, these documents will be published on the website of the stock exchange starting from the general shareholders' meeting with a record date of March 2010.
Until now, some convocation notices had been posted on the issuing company's website or a dedicated external website and could be viewed electromagnetically, but the number of such notices was limited. As a complement to the stock exchange websites, Arrow Force enables users to view the convocation notices of all listed companies in Japan, and provides them with a flexible search function and notification function via e-mail of new arrivals.
More than 50 institutional investors and others, mainly in Japan, have already started using Arrow Force. In addition to the early availability of agenda information, Arrow Force has contributed greatly to the efficiency of shareholder meeting operations in terms of storage space saving through the provision of PDF files, and the ease of listing and searching convocation notices. With the operation of Arrow Force, we now have the prospect of centralizing the “outgoing" part of the administrative flow of the exercise of voting rights, which had been a pending issue.
In addition, in 2008, the exercise of voting rights via the platform by institutional investors holding shares in their own name, such as banks, life insurance companies, and non-life insurance companies, was realized with the cooperation of a managed trust bank. In the future, we believe that we must discuss the centralization of the “incoming" part with the relevant parties and proceed with our efforts.
Toward Increasing Participation by Issuing Companies
Recently, a number of parties have requested that we consider making it mandatory for issuers to participate in the platform from the viewpoint of expanding the number of users as quickly as possible. In this regard, the Financial Services Agency's Financial System Council's Subcommittee on Financial Services published a report in June 2009 titled "Study Group on the Internationalization of Japan's Financial Markets. In the report "Demonstration of Governance through the Exercise of Voting Rights" of the Study Group on the Internationalization of Japan's Financial and Capital Markets released by the Financial Services Agency's Financial System Council in June 2009, the use of platforms by listed companies was discussed, and the report stated that "Exchanges should consider, for example, requiring certain listed companies to use electronic voting platforms in order to promote the use of electronic voting platforms by listed companies.
In response to this recommendation, TSE held discussions at the Roundtable Meeting on Improvement of the Listing System, and in June 2010, when amending the Securities Listing Regulations, TSE, in order to create an environment that facilitates the exercise of voting rights, adopted an effort requirement in the Code of Corporate Conduct that substantial shareholders be able to instruct the exercise of voting rights via electronic means, with a view to promote the use of the platform. The Code of Corporate Conduct stipulates in the duty of effort (Rule 437, Item 5 of the Enforcement Regulations of Securities Listing Regulations) that listed companies that have not yet participated in the platform should make efforts to facilitate the exercise of voting rights.
We urge any listed companies that have not yet used the platform to consider participating.
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