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Background |
In Japan, the legal framework of shareholder rights is based on the nominee concept, with the rights of beneficial shareholders being left unclear, unlike in the US where beneficial shareholder rights are clearly part of the legal framework. As a result, an efficient system for distributing shareholder meeting materials to anonymous beneficial shareholders, and the subsequent collection and execution of their votes, has not been developed. |
The existence of a variety of intermediaries throughout the process has resulted in a very complex and fairly inefficient proxy process in Japan. In addition, but not surprisingly, Japanese is the only legally recognized language in Japan, making introduction of overseas systems and concepts a difficult process.
Fuelled by the desire to enhance Japanese domestic market efficiencies while recognizing the increasingly important role overseas shareholders are playing in Japan, the Tokyo Stock Exchange Inc. (TSE) and the Japan Securities Dealers Association (JSDA) have teamed up with the world’s largest proxy service provider,Broadridge Financial Solutions, Inc. (Broadridge). |
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| The ICJ platform provides the solutions necessary for issuers to communicate effectively with the voting public, as well as provides institutions with the ability to receive proxy statements on the day of release and vote up until the day before the meeting date. |
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| Japanese issuers are increasingly recognizing the growing importance of corporate governance and the vital role that proxy voting plays in enhancing governance. As these issuers seek to become more “investor friendly,” they are recognizing the IR value of improving the proxy voting process for their institutional shareholders, both domestic and overseas. By participating in the ICJ platform, Japanese issuers are providing institutional investors with expanded voting deadlines, consolidated voting capability, and quicker access to meeting materials. |
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