Broadridge Financial Solutions Inc. has won a patent that applies blockchain technology to proxy voting and other applications, the Lake Success company announced Thursday.
Broadridge, which was granted U.S. Patent No. 9,967,238, delivers proxy statements and annual reports to investors and processes transactions for investment banks.
Blockchain is a distributed digital ledger system best known for underpinning cryptocurrency transactions.
Companies such as Bank of America and IBM are racing to file patents and apply blockchain to other business processes. On Long Island, Farmingdale-based Long Blockchain Corp. has announced plans to develop uses for blockchain in the financial services industry.
Horacio Barakat, Broadridge vice president of corporate strategy, said in an email that blockchain technology offers several advantages.
"Transactions and votes on a blockchain are secure and have an immutable historical record of information, which ensures a full audit trail and traceability," he said.
Proxy votes are cast on behalf of a securities owner who opts not to attend a shareholder meeting.
Barakat said using blockchain in proxy voting will offer "end-to-end vote conformation" and insight for participants, including daily progress, vote totals and other details.
"It will improve security by managing access and permission to information via cryptographic tools," he said.
The Broadridge blockchain patent also applies to repurchase, or repo, agreements. Repo agreements are short-term borrowing arrangements in which the seller of a security agrees to buy it back at a specific price and time. The seller pays interest when repurchasing the securities.
The company is currently using blockchain technology in pilot projects with select clients and expects to widen those tests.
Barakat said that Broadridge also is investing in artificial intelligence technologies to further its business.
Shares of Broadridge rose 3 percent to close Thursday at $117.27. The stock has climbed more than 65 percent in the past 12 months.