JPMorgan Chase among new backers for paperless voting fintech

JPMorgan Chase, HSBC and Deutsche Bank are among eight major financial services companies investing $20m in Proxymity, an online shareholder voting platform being spun out of Citigroup’s venture arm.

The London-based platform’s maiden funding round comes as companies embrace digital alternatives to paper-based voting and physical shareholder meetings in the wake of the coronavirus pandemic.

Proxymity allows companies to issue digital voting cards and other information directly to their underlying investors, rather than through the network of custodians that typically relay paper voting cards and other missives to shareholders.

Proxymity said it had already facilitated digital voting for more than 3,000 shareholder meetings across the UK, Germany, the Netherlands, Belgium, Austria, Australia and Spain, since its launch in late 2017.

Okan Pekin, co-head of equities at Citi, said the coronavirus crisis would accelerate the platform’s growth, since sending paper documentation for shareholder votes makes little sense if most is going to almost-empty offices.

Proxymity is already seeing a “huge shift in the markets”, including companies postponing annual shareholders meetings and holding them virtually, co-founder Dean Little said.

He added that Proxymity plans to double its headcount from its current 30 over the next six months and is exploring new products beyond communications linked to AGMs.

The company hopes to be global in the longer term, but will concentrate its immediate expansion efforts in Europe where companies are trying to optimise their investor communications ahead of September’s planned adoption of the EU’s Shareholder Rights Directive, which requires groups to communicate smoothly with their investors.

New investors joining JPMorgan, HSBC and Deutsche in Proxymity’s $20m fundraising also include the custody banks State Street and BNY Mellon and the securities services groups Clearstream and Computershare. Citigroup is also in the funding round.

Mr Pekin said Proxymity was always envisaged as an industry-wide project rather than a Citigroup one. “This is an ecosystem,” he said.

Jane Karczewski, head of global custody at HSBC Securities Services, said Proxymity “reduces operational inefficiencies” and would allow the bank to offer a better service to clients.

Paul Conn, president for global capital markets at Computershare, said the fintech would “bring benefits to not just our corporate clients around the world, but to many of their investors globally, and to the industry as a whole”.

Mr Pekin said there would also be environmental benefits.