Singapore Exchange Regulation (i.e. RegCo), together with the Singapore Institute of Directors (SID) and the Chartered Secretaries Institute of Singapore (CSIS), has today issued a Standard (the “Standard”) for Vendors of Virtual/Hybrid General Meeting Systems (“Systems”) which sets out the functionality standards of Systems which the providers of virtual and hybrid meeting services (“Service Providers”) should aspire towards.
First, to answer the questions that (probably) led you here. Is the Standard mandatory for Service Providers? Are issuers limited to only engaging Service Providers that follow the Standard? No … but both the Foreword and Explanatory Notes to the Standard contain a written encouragement to issuers to, when choosing their Service Provider, have regard to it. Consequently, compliance with, and due regard to, the Standard is voluntary. However:
- The Standard makes clear that there are certain baselines expected of Systems – and functions and matters that are expressed as things that “shall” be included as a part thereof are a “requirement” (as distinct from those stated to be “could” or “may”, which indicate only “recommendations” and “a possibility”).
- You can be sure that if and when things go wrong, the Standard will be used as a metric in any after action review – Service Providers will be asked the extent to which it had been complied with, and issuers will be queried on why and how they chose their Service Provider (particularly, where the Service Provider used was one that did not comply with the Standard).
Broadly, the Standard seeks to address 3 key aspects of the Systems, namely:
- Functional capabilities of the Systems
- Technological risk management
- Measurement, analysis and improvement
Amongst the many “shall-s” of the Standard are the following:
Functional Capabilities of the System
- The Systems shall allow for members to provide relevant information to allow their identities to be verified and shall communicate with the share registrar for verification (implicit in this is the need to ensure that the Service Provider, Systems and share registrar are able to work together).
- Members attending virtually shall be able to submit questions in the form of text via the meeting platform and to vote on resolutions put before the meeting, with the casted votes recorded for auditability (implicit in this is the need to ensure that the Service Provider, Systems and scrutineer are able to work together).
- The appointment of proxies shall be a functionality, along with the means to split votes (e.g. for X number of shares to be voted “FOR” and Y number of shares to be voted “AGAINST”).
- The Systems shall be able to designate certain members as interested persons or otherwise ineligible to vote and disallow them from doing so.
- The Systems shall include the means for technical support to be provided by distinct channels that are not reliant or dependent on it (which means that there must be a back-up, communicated in advance).
Technological Risk Management
- Service Providers need to undertake comprehensive testing of the stability and availability of the Systems, which must be documented, and the results made available to customers on request (so an argument by an issuer “how can I possibly know that a Service Provider is unreliable?!” does not hold water).
- The historical availability of voting and question and answer modules need to exceed 99%.
- There needs to be alternative webcast channels in the event of a failure of the primary one.
- The Service Provider shall cater for back-ups/fail-over systems.
- The Service Provider shall ensure that the Systems comply with relevant information security standards, such as ISO/IEC 27001.
Measurement, Analysis and Improvement
- Service Providers are expected to regularly monitor, improve and update the Systems independently and on account of any feedback received, to ensure and maintain their continued suitability, adequacy and effectiveness.
While issuers should take active steps to ensure that their Service Provider complies with the Standard, they may also rely on representations and warranties on this point. We would be happy to advise on your service agreement with a Service Provider! If you have any questions or require any additional information, please contact our Jeremiah Huang* and Brittany Lau.
*Disclosure: Jeremiah was one of the representatives of the Law Society of Singapore’s Corporate Practice Committee that participated in the discussions and drafting of the Standard.