Streamlined Proxy Voting & Simplified Regulatory Reporting using DLT - Daml Webinar

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   good morning everybody good afternoon thank you very much for joining today's webinar about proxy voting i'm delighted to be joined today by our partners at intellect eu we're going to be talking about simplifying and improving the processes around proxy voting using smart contracts and distributed ledgers we have a live demo today of an application built by intellect to you running on our demo for quarter smart contract integration layer i

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   would encourage people please if you have questions to use the zoom chat feature which if you move your mouse you'll see at the bottom of the screen there's a little speech bubble with chat written by it if you tap on that you can feel free to direct your questions to any of the panelists directly or perhaps to the whole room um i'll be watching that and i'll be flagging those questions up for our speakers today

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   if you do that we can keep it running we would like to make this interactive though so please i do encourage you to ask your questions um yeah we're looking forward to getting going so in terms of our agenda for today i'm going to talk briefly about smart contracts and demo for quarter itself and then i'm going to turn over to our colleagues of intellect to you um to talk about the challenges of proxy voting

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   um some of the the operational uh difficulties that arise with that and how distributed ledgers and smart contracts can help to alleviate some of those and then followed by a live demo so in terms of who's talking today my name is tim kemp i'm the head of emerging ledgers a digital asset my team is responsible for integrating damo our smart contract language on a variety of distributed ledger platforms

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   including corda uh hyperledger fabric sources bizu and also some non-distributed ledgers like amazon qldb and sql databases i'm joined today by luis morado if you'd like to introduce yourself please list i'm one of the technical leads at intellect to use specifically focused on everything related to digital assets as part of my activities as a software engineer at the company i do consultancy

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   with clients on different projects not only related to tamil but in distributed ledgers as a whole i've i have a background with it of course and i've been working with integration with legacy systems uh for pretty much all my career um and that's pretty much it so i will now probably pass the word to thomas to give his introduction as well thank you luis and uh thank you tim i'm

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   so i'm thomas i'm heading the blockchain and dlt solutions team at intellect eu this means i spend most of my time working together with our blockchain and smart contract partners um two very important ones are of course digital assets where we have a strategic focus on using their smart contract language demo in our products as well as r3 the company that delivered corda enterprise

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   or enterprise blockchain of choice when we work together with mainly financial institutions and so that's a second part of the um of my my day-to-day activities working with our larger uh client accounts being it's csd stock exchanges and global investment banks on providing blockchain consultancy and professional services and then next to that i work very closely together with our product team where we have the catalyst product suite a blockchain managed service and

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   software platform that we might touch upon uh shortly during this presentation as well um and my background has always been in finance and uh financial technology so back to you tim okay great thank you very much thomas um so if we could move on to the next slide please i want to talk a little bit about uh smart contracts so um i think most people now who've read business press been around technology for a while of

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    familiar with the promise of distributed ledgers and blockchains these are mechanisms which make it very easy for multiple parties with varying degrees of trust between them to agree on what is actually true what's a statement of facts that we can all agree on uh about the state of some business process or the state of the balance of an account um you know a ledger of assets being exchanged or the the state of the you know the contents of some database somewhere that represents inventory

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    um the underlying technical mechanisms of blockchains and distributed ledgers make that possible um what they don't really talk about though is what are the rules for how that state should change and that's where smart contracts come in so i'll give you an analogy for the moment um if you think about playing a game of chess over the mail so postal chess is used to be popular before email or even email chess um you've got a mechanism there for

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    keeping synchronized two different boards uh if i decide to play chess with luis which was probably a bad move on my part but if i did that um then then luige and i would both receive each other's letters in the mail we'd open them up we'd read the moves that each other had made and we would update our own boards accordingly um the that's that's essentially analogous to the blockchain or distributed ledger piece

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    but what about the actual rules themselves what governs how those pieces can move that's more about where the smart contracts come in so if you think about the game of chess you know you have a pawn which can move in a forward direction which can take diagonally and there's a little exception to that rule good on passang um you have knights that move in an l shape uh bishops and queens and so on you take it in turns to make moves there's certain point values when you take a piece there are rules that occur

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    when certain special situations arise like you get in check those rules there can be governed by something called a smart contract so the smart contract is a mechanism for controlling the allowable set of states and how they can move from one state to another uh on a distributed ledger or blockchain or really just any sort of place that records state any piece of uh infrastructure that can record a fact so

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    even a database so a smart contract is um uh you know that whole set of technology came about with with the advent of blockchains and distributed ledgers as a way to control the evolution of information on those um what we've been finding at digital asset is that there's enormous interest in using um there's enormous business benefits in using smart contracts to help as a title associate construct or bridge islands between

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    silos in institutions and enterprises so between different desks at a bank for example just as much as there is between silos external to the institution so between vendors and suppliers between banks and brokers and their trading counter parties and so on so smart contracts are a way to make that happen um in generally in the case of blockchains and distributed ledgers the way that you

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    create those smart contracts is you write code in a traditional general purpose programming language you might have some extensions to javascript in the case of solidity you may be using kotlin or java or jvm based languages if you're writing smart contracts for recorder-based blockchain um if you could change the next slide please thomas um at digital asset we we looked um at that

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    problem not from the perspective of the creators of a distributed ledger platform but rather from the perspective of somebody who would want to write a smart contract to control and govern a business process so we created from the ground up a domain specific programming language called damil it stands for the digital asset modeling language although we prefer these days that we just call it damn it's its own word

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    damil is a programming language created specifically for controlling the evolution of information on distributed systems it's a perfect language for uh writing those rules for describing the uh you know the interactions of pieces in a game of chess or for controlling the roles and responsibilities of the different parties involved in a proxy voting process as we're going to see in a bit um the way that demo works is that you

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    you write your application you write your business application your code in demo um that demo runs on a runtime a piece of software here represented by that block in the middle the demo runtime in the ledger api that runtime talks to an integration the integration layer then speaks to an underlying distributed ledger or database so there's that set of boxes there at the bottom all those logos describing

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    the various different platforms on which damol can run the variant the interesting thing about damil here is that a piece of code that you write uh in prototyping mode on day one um targeted to run on a postgres database there's no distributed element there right it's just postgrains um you can take that demo code and without changing a single character of it deploy it on a fabric distributed ledger to prove your concept

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    out to a wider audience and perhaps test it out with multiple parties then when you're ready to move it to production um you've got your choice of uh of of ledges with certain privacy guarantees you can pick a distributed ledger which makes sense for the uh the characteristics of your use case you could deploy that on cord or enterprise if you want heavy support you can put it on vmware if you want backing from that firm and so on um so the the demo code stays exactly

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    the same um the way that your application interacts with it through the ledger api your website or your service or whatever sends calls in through the ledger api um the run time all of that's the same you just change the integration change the underlying platform and your demo code is fully portable and runs on any of those underlying platforms with more coming so the the one platform that i think is

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    is of interest for our webinar today uh and the one that which uh luis and his team have built uh the proxy voting demo um against is quarter um dall four chorder is an integration just like in that previous box which allows demo code to run on any flavor of the uh quarter distributed ledger it works in an enterprise context on quarter enterprise if you want support from r3 the additional features in quarter enterprise it works fine on that if you just want to get started if you're supporting yourself

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    if you're prototyping what have you uh then it works exactly the same way on on chord or open source demo has a number of additional ancillary benefits that it brings above quarter um the language itself supports sub-transaction privacy um blinded transactions so the operator of the network is not able to see the content of your smart contracts or the data that you're transmitting across it

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    um as long as you interact through the ledger api damn will provide that guarantee for you uh and then the other semantics of the the damn language itself which i'm not going to get into now but we can certainly welcome to talk to anybody offline about that and then luis will be touching on some of that in his presentation too about offer accept patterns and insurance of consistency and correctness of the code that you're writing um so um just to wrap up all of this

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    um the promise of damo you know with a specific language built just for creating smart contracts there are no concerns about the system no management of keys no need to worry about how you send messages or how you persist state to the underlying platform that's all done for you damil gives you a significant increase in productivity in terms of how fast you can get your application built being a very narrow language focused entirely on the business domain and the rules that you're writing for your

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    application um you can turn out uh the the consistent sorry you can turn out um a functional application much faster than you would be able to on something like java or kotlin or javascript where you have to worry about all the you know the system's mechanics around the side um runs in a variety of platforms and in quarter terms it runs on enterprise and quarter open source um i think that's

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    probably enough for me um again questions please put them in the uh the zoom chat um if there aren't any then i'll turn over to thomas and we i think we can get started with a specific uh example of how damol is used to create um you know a piece of viable business functionality here in the proxy voting domain um all right thank you very much tim uh for that introduction um so what we will be trying to do with intellect you

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    uh lois and myself for the next 30 minutes or so is we want to dive a bit deeper into a specific use case um named proxy voting for the capital markets we will touch upon what are today some of the challenges that we see in that market how could blockchain and smart contracts more specifically demo potentially help in solving these problems and then we will dive into the actual demo and also uh technical architecture on how we have built

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    this proof of concept now with everything that we say um i would like you to think of this as a broader problem a broader problem that we see in financial services in capital markets in the insurance industry but even in supply chains and logistics where a lot of different participants are looking at a specific piece of data and on top of that data they're trying to implement their business processes and continuously reconciling with each other and proxy

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    voting is a very nice example of such a process and that is why we have chosen this one to showcase the demo on carta demonstrator i will keep it very high level for what proxy voting exactly is as i see most of the people in this call are also from the capital markets and investment banking industry but so in general at the highest level proxy voting is really the process where there is a ballot cost by a person or corporation on behalf

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    of another shareholder or a corporation who might not be able to attend a shareholder meeting now in this specific example we're speaking about issuers so corporations who are traded on publicly on public markets so for example a company trading on the nasdaq or a company trading on the new york stock exchange a potential issuer could for example be tesla now what happens during shareholder meetings they have to decide on certain things this is anyway for

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    example uh are we gonna do a stock split is there gonna be a merger and acquisition and so these votes these proxy votes can have quite a big impact on the financial structure of the company and the long-term viability and future of it now um one example what do we see happening with proxy voting often the biggest shareholders of companies like apple of companies like tesla are the big funds the big investment companies and they might vote on behalf of actually the

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    shareholders the individuals so we're here looking at the investment managers and or the asset managers now the proxy voting process itself has four main blocks first of all there will be an announcement from the issuer that there is a certain uh topic that needs voting there will be interactive interaction with the customer on the agenda there will be the process of voting itself and there will be the confirmation confirmation of results

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    now within this process we see a lot of different steps and even more important a lot of different stakeholders so there is a very long holding chain from where the information is going from the issuer itself to the actual voter um on the ballot now who do we have in between so first of all it starts with the issuer we will communicate to the local custodian we'll communicate to the global custodian who will communicate to the central securities depository

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    who might communicate to the international central securities depository as an example a dtcc or a euroclear and they will then communicate it to the asset managers now today how do does this communication happen partially is still paper based so manual standalone tools and proxy services are being used message based networks all in different formats looking at different data so we now understand the process of proxy voting we know it has using different tools different formats

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    and a lot of different steps and stakeholders in between now all of that brings some challenges first of all as i said before for example on a merger and acquisition it can be quite important the impact of the vote now what we see because of the different standards different tooling different communication layers like often there is the risk of information being lost at the same time there are also deadlines that need to be met there is uh the cut off date for a

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    specific vote now if that deadline is not met that vote is not counted well those votes could have a big impact on the actual decision now what we also see is that because of the inherent structure of how csds and stock exchanges refer to shareholders with omnibus accounts with legal versus beneficial owners not always the voting comes to the actual end shareholder the individual but the voting happens

40. 18:18

    in build from um from the the asset manager and so they're hiding the actual shareholder now with all of this of course we have an inefficiency that we have created um we have a lot of costs that come with it because of the messages the tools and the intermediaries and we have the need for continuous reconciliation between all the participants included there now what is the um the business process so the business process which we are

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    envisioning in which we are also going to show during the demo so i will run very high level to this we will uh show a meeting creation we will look who is uh entitled um to vote and send that to the local custodian send all the data in a standardized format over the voting instructions execute on top of this voting confirm and share the actual results now we will do that using demo as the smart contract layer the programming language and we use

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    coda underneath as the distributed ledger to share the actual data between the nodes between the intermediaries what um kind of benefits and advantages do we want to bring with this so um first of all because we now have a solution where we have a single place of communication a single place of information in the distributed ledger in the actual persistence layer we are now making sure that we have a golden copy of the data and we execute on that golden copy

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    secondly because we use demo and we have standardized and partially automated the workflow we have a deterministic outcome and we directly link the shareholders with the actual issuers that create the meeting so we're able to automate uh partially deadlines notifications and update updates with direct communication we provide more transparency and trust into the system that you as a shareholder of a specific

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    company that your vote will be counted and you can also look and track back how the voting has happened because we streamline the operations we reduce the need for reconciliation to the bare minimum we can also have big savings on costs because of partially that automated reconciliation and um because of the blockchain um and definitely with integrations and in a broader financial infrastructure

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    we're able to comply to um srd2 the shareholder rights directives to a new directive that makes it uh obligatory to really pinpoint the uh beneficial uh shareholders as well now um i want you also to look at this um a bit more in in a broader sense um so this particular solution um could for example be used centralized look at a csd that might implement this to communicate with their participants it might be a local or a global

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    custodian to communicate with their asset managers but where we which intellect you really see the value is by building a fully end-to-end decentralized system where we leverage the workflow part together with the blockchain dlt corda enterprise part now if we want to zoom out of this um we see that proxy voting is very similar as a lot of the corporate actions and actually what is for productions it's a multi-party workflow with multiple stakeholders where we want

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    to create a deterministic outcome whilst standardizing a certain process or business workflow so this solution could easily be expanded to other communication layers between financial intermediaries starting from the issuer now um if we then zoom out a bit more we can really start thinking about smart financial products what if we issue directly bonds equities derivatives on chain models in demo and then link

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    these actions live proxy voting library productions directly to um the actual financial product and that is a vision um that we are also creating with intellectu and with partners like archery and digital assets um so creating this trust and efficiency into the network um now i will um not any longer keep you waiting um and and pause the mike to uh my colleague luis uh we will go a bit deeper into uh the technicalities and then uh showcase you the actual demo that we

49. 23:44

    have built yes uh thank you thomas of course for the presentation on the use case and also on the on the broad scene that exists so we're not definitely targeting just this use case it's it's more than that uh but focusing on the technical overview for the damon carter so this is a a little bit of a an architectural view where we can see the containers uh that that this solution has so your common dental applications in essence will will connect through the the

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    standard the demo ledger api uh that will then uh connect to a corda adapter that finally reaches out to the actual cordon node and where a chord app a specific chord app for demo should be installed and deployed and then as exercises and creations of contracts are pushed into through the ledger api they will of course being notarized through the notary service the from r3 uh they will reside on the vault test as regular states uh then of course if that state is evaluated that needs to be

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    shared across nodes the communication happens in the standard way between as as it's regular within r3 between the chord apps uh with as part of the workflow that has been defined all right so moving a little bit closer to the demo in this case and showing a little bit just a very brief snippet of the architecture so for the demo we're just providing two notes okay so in essence uh the the use case on

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    on proxy services that proxy voting sorry uh that we're going to show uh there are multiple parties interacting with it but uh within each quarter node we allocated specific parties as demo parties that have access to that node okay so this is is the way we've separated things so uh for this demo where in one core the node we have the regulator the issuer and the csd that can connect and view

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    the contracts that reside at that node and on the other node we see the proxy services voting party and the local and global custodian all right so this is the basic setup and i'm going now to start moving uh to the presentation put to the demo itself i should be now trying to share my screen hopefully okay let me quickly okay this one hopefully everyone can see the screen uh so at this stage here i just have two navigator windows so this is going to act as my ui for this use case uh behind the scenes i

54. 26:38

    already have my demo encore the network running okay so with the two nodes i've already managed to deploy and this can be shown the contracts and allocate the correct parties at each node so on this first navigator we see the parties corresponding to the first node we've created and on this other navigator we see the remaining ones all right so first thing uh for this setup this current network is

55. 27:11

    is is clean so in essence there apart from the the application that has been deployed and the parties that have been allocated there are still no contracts and as it is uh general practice uh within demo applications it is usual for some basic setup of contracts to be created before we actually delve into the more standard workflows uh on the use cases and for that i prepared a few scripts that we're going to see acting uh behind the scenes and then we can see how the contracts

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    uh show in the navigator so the first contract i'm actually going to push through this through the script is going to be triggered by the csd so right now this is empty as we see it and i'm going to behind the scenes here uh create or execute the first script which will will basically trigger a couple of contracts a couple of proposals that follow the the pattern of an initiate accept uh stand um design pattern for demo

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    and we'll create those two contracts from the cst to an issuer and to voting parties okay in this case we just have one in this demo that we'll be showing but what we'll be able now to see in a few seconds is that a few contracts hopefully will will appear here under the csd in the meantime because sometimes this shows a little bit slowly at first hopefully things will work out okay so

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    a few more seconds while the system seems to be warming up i'm checking if everything has worked successfully it seems like it has so just refreshing just in case okay here we have so we have the two onboarding proposals uh that the csd has sent uh across so we see right now we're on the first node okay and we have one of the contracts is between the csd and the issuers so no information in this case has

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    has gone from this first node into the second because the issuers is still is maintained as an allocated party within the first node uh but in the other case where the voting party is the new participant that is invited to one port we will actually see here okay seems to need to refresh consistently okay and here we have the onboarding proposal okay so we already see a glimpse of the system working and we have the segregation between nodes

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    of course because we see that certain information was sent out or created within the first node and shared to a second node this in this case specifically for the voting party all right so uh with this first script that is was triggered we now need to push for some other in some other parties to do certain other actions to fulfill the setup in this case we're going to trigger uh the

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    the voting party to invite a set of partners uh which each of these partners will be part of the custody chain what we call here the custody chain which just links how the that voting party is connected to a local global or proxy services okay so in the case that when uh a general meeting is is agenda is scheduled uh then it's needed for the csd to send out the an entitlement for a specific voting party and with that knowledge on who are the

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    partners for this voting party or who are the the entities that are part of the of the custody chain it's easier to transmit that information but again all this has to be set up in the beginning so this is not something that we jump straight forward we need to to push certain contracts as part of the modeling uh that create these relationships or or in another way what we call the

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    disclosure contract the relationship disclosure contract okay but so again this is a again a proposal so it has been the voting party which has proposed to those other uh global custodians local and so forth uh to accept um to to they are they have proposed a partnership in this case so we will take a role uh during the proxy voting based on this and uh each of these parties will have to

64. 31:59

    accept okay and as we do that so we'll probably be seeing that certain of these contracts uh will start becoming partner contracts instead of partner proposals so this takes a little bit longer eventually so as we're doing some more let's wait a little bit while it runs okay here we see one of them has already changed but this is a more global view on the voting party so not necessarily on the csd on the on the each and specific entity

65. 32:33

    okay let's wait a little bit longer see if things update just checking how the scripts are running still running so we'll take a little bit longer uh in the meantime uh so one of the things that should have happened here is that as part of the scripts the issuer might already yes so the proposal the onboarding proposal that was sent out by the uh by the csd was already accepted as well by the issuer so this this onboarding proposal will

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    allow the issuer a set of rights so in in in such of these rights are the creation of the meeting then to send out the results as as the results are uh become available for for the issuer so some of these things are only possible when both parties the cst and in this case the issuers sign up for this contract uh i guess things should be pretty much over so expectedly we've given enough time there's still one that hasn't executed successfully it seems okay it's wrapping up

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    as we see here so now it's updated successfully it seems um one other thing that we are able to see is that these partner contracts uh become visible for the csd as well and why we've done this in this particular exercise that we did uh was that we wanted to emulate uh the csd doing a due diligence on the entities that work with the voting parties okay so in order for the cse to work with multiple local

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    custodians or proxy services they need to explicitly approve their entry into the system so actually they they will have a right on the partner contract to approve and that's what's going to happen next it's the final step on this on these scripts that i'm executing um that is going to take these contracts and create a more broad partners contract which has the full costly change so we are able to match the voting party to

69. 34:41

    each and eve each individual entity that with which it works on this use case okay we should be running soon enough hopefully in the meantime i can already share on the other parties we see the individual contracts so even if for example the information is stored on the nodes and the node is is a single instance where multiple parties the allocated parties connect to the actual truth is that they cannot simply go at it and re and read all the information because uh unless of course

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    uh they go directly to the vault uh but even then as as tim has mentioned that data is is blinded so it's not easily seen by the by any party even if they have direct access to the vault but nevertheless so hopefully this event has ended yes we have here the single uh partners contract and the relevance for this contract is this this is going to be leveraged in both the the voting and the entitlement actions uh in order to send out the information

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    between all the all the ksd chain as we'll see next okay so having this setup i will now start really by generating as an issuer i will create a meeting okay so i as thomas as mentioning as mentioned so we'll create a general meeting where as part of the details i'm could set the agenda for uh a stock split something like that so they're going to vote whether a stock split will happen or not i'm just here going to push who's the

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    regulator here so who's the regulator with which i'm going to share this information i just need to copy this here and hopefully yeah you see there this section has occurred successfully so as we do this this means that this contract for a meeting that was just created from this onboarding contract is available on the issuer and will also be available in this case before the cst and the regulator okay so at this stage

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    this meeting has been shared just with these two entities as the csd is now he knows about the meeting it can immediately inform uh having eventually the the information on the beneficial ownership of the shares it can inform each voting party on the entitlement that he has for the votes so to do that he needs of course here to to push to exercise a new choice within the meeting contract which will he will explicitly say

74. 37:34

    which is the party that is giving the entitlement to and the number of votes and when he does that so what is going to happen is that a new contract for the end the entitlement is created and this contract is shared to the second node to pre to actually all the parties that exist there because uh apar in uh despite we haven't just input the voting party on the choice by using the the contract that sets the the custody chain uh the csd is able to share or to define

75. 38:12

    exactly who are the parties who have the visibility on this entitlement so instead of the cascading of messages that needs to go step by step through through the custody chain we can deliver uh this notification in one swoop okay so that's really the use case here that we are trying to the the real benefit we get from from what we're showing here so we see the global custodian has visibility on the entitlement as well as the services provider and the local custodian in this case

76. 38:44

    okay so moving forward we have then the voting party that does indeed have he does have to vote or give his instruction given his entitlement and to do so all he has to do is say give his instructions which you can say just vote for okay it will create a contract and in in the inverse way so instead of going into uh from the cst into the in to the voting party in that in that in that direction we get now a new contract that goes that flows in the the the inverse direction

77. 39:25

    uh however this contract on the beating instructions does not reach the csd so it stops in this case at the local custodian it's only available to the parties which are part of the custody chain till the local custodian and this happens because then as part of the of the workflow we've defined here uh that local custodian when the date comes from for the meeting itself because these instructions can be set out previous to the meeting uh it's when the execution of the vote will actually

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    happen and for that the the custod the local custodian will need to act specifically and deliberately on the voting execution all right and as he does that this voting execution uh this confirmation on the execution will be shared not only to the local custodian but to the voting party and of course this execution will also be shared to the issuer itself so here with the voting uh with the execution

79. 40:30

    the issuer can now really accept the vote so say explicitly again everything is all right with this vote it has gone as expected and just simply accept it all right and as we do this one last the one last step is that the the issuer would collect uh all the votes in this case in this demo what we're showing is just one single vote of course uh and would send out uh so sorry it's not this contract it's not this the meeting one and would

80. 41:03

    send out the meeting results saying since the voting party that was on the system voted for so uh the results was that the general meeting agenda points were approved okay and we just need to set here again the regulator to inform him on the results of the general meeting all right and this uh marks the end of our demo uh it's important real really here to reference that again this application we could we've actually delivered or first implemented

81. 41:35

    it to to run with dabble as well in a centralized system and we through this work that we did what we we understood was that it was very simple really to port uh the application into a new ledger like damilon carter okay so again the the the important message here that we think it's it's it's uh to to deliver it's that it doesn't matter too much what is your governance model for the application that you want to build it's important to share the information across different entities then exactly if

82. 42:16

    there's more centralized or decentralized way that you want to govern as these applications demo does provide you with that flexibility so if you want to go centralized it's definitely a good option to go with either double or sql some sql database some standard sql database and if you want to go decentralized definitely chord and specifically if you're if you're an enterprise a big enterprise which has uh many requirements uh related to security

83. 42:49

    privacy it's definitely core the the top choice and and in particular if you really keen to have all those capabilities that enterprise uh delivers it's definitely the go-to option uh with any solution like this all right so on my part i think i'm pretty much over uh i would pass the word either to tim or thomas to continue thank you thanks very much um thank you for the for the comprehensive demo um so

84. 43:19

    your last point actually is a nice segue into the first question that we've got from emmeline denney and i'm sorry if i'm saying the name wrong um which is you know specifically about regulatory change what's required to actually get something like this implemented um you touched luis on um you know the fact that if you run this on a centralized service we have the options of doing that with dabble and postgres um all of which is good and doesn't require much change right it's just it's just a

85. 43:44

    software platform change but emily's question is um how do you know do you consider the adoption of this technology in a widespread basis achievable without facilitating changes in the regulatory framework and i'll drop in a quick answer which is yes in terms of dam all but not in terms of decentralization let's get to that in a second um second part what are your views on changes that would be desirable in the regulatory framework to allow and fully exploit the use of this

86. 44:08

    technology for proxy voting and to what extent has this technology been adopted by the leading and largest companies involved in providing proxy voting services including broadridge and euroclear so i'll hand over to the intellect to you team if you want to have a stab at that question and then we've got a couple more yeah most definitely um thank you so first of all to touch upon a part of it is um

87. 44:32

    we definitely see that regulatory barriers um to build a solution like this as a global solution um are are still there like there are local legislations there are different interpretations um but where we see getting a lot of traction with these kind of solutions are to implement them um locally first with becoming and growing globally and interoperable over time this is not only for proxy voting but for example with intellectual we have also been very active in the know your customer space around data sharing

88. 45:10

    but also around post-trade processes and what we truly believe is that the combination of really this technologies where demo can create a standardized workflow on how we process um the the actual data and then solutions like corda that can create the interoperability through for example the the business networks and the corda network that they already provide that we will be able to grow that um

89. 45:40

    globally over time now also from our experience um we have been working a lot together with the regulators and we truly see that regulators are open uh to this um we see things moving pretty quickly in uh asia most definitely for example singapore stock exchange has already been uh looking into proxy voting um but also in europe and in us we are in communication with indeed um institutions that that are using these these proxy voting services like the the icsds the big stock

90. 46:12

    exchanges and the regulators into mutualizing uh the legislations and into facilitating the changes in these regulatory frameworks okay thank you there's actually a follow-up here from jacqueline who would like to know um about compliance with srdii um i can read the whole question out uh it's almost yeah yeah yeah so since september this solution i can i can answer a little bit so this solution of course uh as a demo that it is it doesn't follow fully uh

91. 46:45

    the the standards the iso standards in essence but as intellectuals we're actually swift partners we've been working extensively with swift uh for over 10 years and we do have knowledge on on some on the iso standards and know how to apply them even on the work that we've done uh while first analyzing this use case we considered whether we wanted to push forward already something like that but in the end we decided just to opt for a more simplified process here just to show the value

92. 47:16

    uh because uh we we saw of course uh that's under a demo though so this is not to take for production right away it wouldn't have to be uh somewhat reshaped uh it's it's then on the data model that we need to to change things so certain certain actions that we we exercise during demo instead of just pushing for some simple information fields like we did we would have to fill out all the all the fields that come from the iso standards so that's pretty much what would probably happen of course

93. 47:48

    there are certainly caveats that we need to handle as we do that but as part of the work we did that's definitely possible and it's something that we would definitely be looking forward to to provide as well okay so primarily a matter of expanding the schema basically adding the additional fields and to ensure compliance okay um from christian wilke uh how do you ensure that all parties along the custody chain use a quarter node

94. 48:12

    compared to today's swift standard um yeah so definitely so i think that also comes a bit back to what lewis was just saying so we we truly believe that the iso 2022 standards that are being put in place um are creating a lot of value and are very compatible with what we can do with demo and with corda um one of the um the the live exam the the examples that proves that is what um digital asset is doing in australia for example where the full implementation of

95. 48:44

    the new chess platform is iso um 20 or 22 as well um as well we believe that these kind of um systems are should be open interoperable and um integrate with the existing infrastructures these can be existing infrastructures of the banks of the market infrastructures or networks like for example swift and then indeed if we want to create that true end-to-end efficiency um we have to move to a system where

96. 49:15

    most of the big organizations are running um their nodes uh themselves so they're quarter notes now what we not expect is that every bank in the world is going to start running a node specifically for proxy voting or specifically for core productions but this comes a bit back to the the bigger vision that we wanted to share there as these markets are moving from electronic and message based communication to more transactional based and

97. 49:44

    digital markets we see the appetite of financial free institutions and market infrastructures to run these notes and create an end-to-end workflow from the issuance of financial products to the trading the settlement the post trade and then the asset servicing including the price of voting and corporate actions as well so great sorry i just wanted to add a brief reference so as part of the work we've done so not to focus solely on proxy voting here so we've looked at different standards so currently we're

98. 50:17

    we're actively looking at is the standards like cdm and fpml and working actively in projects that relate to it so it's not just uh of course these standards that we look for then we do we do invite or we push uh our customers as well to take these standards when when applying them in in their in their applications in their real world use cases good yeah i think the the i just want to pick up on something that thomas mentioned before you know what we're doing with the australian securities exchange is exactly that kind of hybrid model which

99. 50:50

    is the way that these things get adopted over time in large and complex financial networks which is you have that you have a central operator regulatory mandated authority which is which is looking after the network um and you bring you know you you give parties the ability to operate nodes on that from as early as they would like but you provide a level playing field legacy access model for those parties that are unable to do that and you gradually allow people to to

100. 51:20

     switch over over time as they get comfortable with it and as the network matures and and their technology you know budgets and appetite can catch up with that need um for the you know the the the benefits of governance and control over smart contracts um for um you know for the business aspects of this are really the same whether or not it's fully distributed um there are you know it's additional reconciliation steps if you're not taking um a a node on the distributed ledger

101. 51:51

     but the the actual control over the evolution of that data is the same regardless um so there's a question here from jean-claude chavo which is how can such a proxy voting solution also help solve the challenges of computing the beneficial shareholder ownership and voting rights of shareholders and passive investment and index funds yeah so i think it also relates a bit back to the the srd2 that we

102. 52:16

     um that we stated on before right so once we have a distributed ledger in place where directly we can see who exactly um the legal owners are and the beneficial owners in a shared environment as the the single source the golden copy we can then leverage demo um that can automatically calculate and execute on looking who is entitled to vote who are the better official owners and how do we communicate to these beneficial owners the right amount of

103. 52:50

     data with that um sub-transaction level of privacy so i would say exactly this kind of solution and the combination of these technologies um that is exactly what it could do in a in a secure distributed and private manner okay thank you uh i just want to pick up on um emmeline that the the last part of that question there was to what extent has this technology been adopted by leading the largest companies involved in providing proxy voting services including broad ridge and europe um i do want to point out that that

104. 53:23

     broadridge is a user of daml and they're they're using that technology in a distributed fashion on a distributed ledger for um providing tri-party repo services um so yeah they're they're enormous in proxy voting as everybody knows a key component of that infrastructure but um they have been exploring the technology and are now using it in in a different area um we would certainly hope that they consider it for proxy voting in future um the point there is you know that the

105. 53:54

     company has adopted it and is making use of it but um touching such a a critical part of their business is not something that's undertaken lightly and certainly not as a pilot project um okay uh james um javorsky would like to know if the demo is going to be published on the digital asset github um uh we didn't write it so it's really not for me to say whether it has a future in open source or not

106. 54:18

     um and i will put intellect to you on the spot but feel free to defer the question if you haven't decided i think i can answer this one so as a default for now we just we have a couple of videos really so one of them is just the use case kind of like we've shown here with navigator uh with demo navigator showing the contracts and we have actually or we're going to push another video within our youtube channel uh where we're using dabble and we have

107. 54:45

     a specific ui with it so that's you definitely invited to check out our youtube page at intellect to you and you should should have a visibility on on the on on this use case okay great thank you um so i think we we have covered all of the questions that people have asked a couple of people asked some some more technical questions which i dropped in um uh text answers in the chat channel so for yogi and bart if you're

108. 55:18

     not able to see those please let me know follow up directly with me afterwards if you like um otherwise uh we have reached the end of our agenda um i want to thank everybody again for attending uh for the excellent questions and the good discussion i definitely appreciate it um thank you to intellect to you also for uh contributing expertise and for working on the uh on the demo for this um and for um

109. 55:43

     being such great partners of ours with tamil as well for believing in the technology so um thank you all thank you very much all right all right thank you for having us as well tim i guess of course always a pleasure okay and also uh he's unsung and behind the scenes here but many of you know manish grover um thank you very much for uh for organizing this today manish and herding all the cats and putting this together right thank you all i think we will we will close um

110. 56:12

     have a good rest of the week everyone and thank you very much again likewise everyone okay thank you thank you