TheCorporateCounsel.net

Yesterday, the SEC announced the adoption of amendments to Form N-PX that are intended to enhance the transparency of proxy voting by mutual funds, ETFs and other registered funds.  At the same time, the SEC also fulfilled one of Dodd Frank’s regulatory mandates by adopting rules requiring investment managers to disclose on Form N-PX how they voted on “say-on-pay” proposals. Here’s the 169-page adopting release and here’s the two-page fact sheet.  This excerpt from the SEC’s press release summarizes the changes:

To enhance proxy vote reporting, the amendments will require funds and managers to categorize each matter by type and, where a form of proxy or “proxy card” subject to the Commission’s proxy rules is available, tie the description and order of voting matters to the issuer’s form of proxy to help investors identify votes of interest and compare voting records. The changes also prescribe how funds and managers must organize their reports and require them to use a structured data language to make the filings easier to analyze.

Funds and managers will also be required to disclose the number of shares that were voted or instructed to be voted, as well as the number of shares loaned and not recalled and thus not voted. This latter requirement is designed to provide shareholders with context to understand how securities lending activities could affect a fund’s or manager’s proxy voting practices.

The new rules are effective for votes occurring on or after July 1, 2023 and will be reflected in filings beginning in 2024.  They were adopted by the now customary 3-2 vote along partisan lines, and I think it’s gotten to the point where when you read one of our blogs about rule adoptions you should just assume that was the vote unless we tell you otherwise.

– John Jenkins