TORONTO — The Toronto Stock Exchange operator, TMX Group Ltd, said on Thursday it has developed a blockchain-based prototype for electronic shareholder voting, the latest effort by an exchange operator to leverage the technology to try to solve an industry problem.

The secure electronic voting prototype, which was developed in consultation with Accenture Plc, would make voting during annual shareholder meetings significantly more efficient and accurate, and help boost shareholder involvement in corporate governance without the need to vote in person, said TMX.

Thousands of clients could potentially benefit from the technology, according to TMX, including more than 3,000 issuers listed on its exchanges, more than 200 sell-side broker/dealers and several intermediaries, or transfer agents, involved in the process.

“This (industry problem) is something that’s been plaguing us for quite some time,” John Lee, vice president of TMX’s Innovation and Enterprise Delivery, said in an interview.

“The technology to try and address this problem wasn’t really something we could use until you looked at something like blockchain.”

Distributed ledger technology (DLT), more commonly known as blockchain and popularly associated with the virtual currency bitcoin, is a decentralized, distributed record of data or transactions. The database characteristics and immutable nature of the technology make information transparent and easy to track, and large-scale hacking extremely difficult.

Banks and other large financial institutions have been ramping up efforts to develop practical applications using blockchain. Proponents say it will help make some of their most burdensome back-office processes, such as the clearing and settlement of securities, simpler, cheaper and more transparent.

Nasdaq Inc, one of the world’s largest providers of technology for exchanges and clearing houses, uses blockchain to power its U.S. market for shares of private companies and has been testing it to run proxy voting for companies listed on its exchange in Estonia.

Lee said the technical components of another prototype in partnership with certain members of the Liquidity Alliance are also nearing completion. Participating alliance members include Deutsche Borse, Clearstream, Strate and VPS. That blockchain project addresses how a collateral business can operate in a multi-jurisdictional environment.

TMX’s new proxy voting system prototype still needs regulatory approval before it can be tested live, the company said.

“There’s always constant dialog taking place. As you can imagine, the TMX group is a heavily governed organization,” Lee said, noting that talks would involve a number of federal and provincial regulators.

© Thomson Reuters 2017