Form N-PX Amendments: What You Need to Know
July 31, 2023
The U.S. Securities and Exchange Commission ( the “SEC”) adopted amendments to Form N-PX filings to make proxy voting disclosures more useful and informative for investors. This high-level overview of the changes, including who it affects, timing, and best practices, might be helpful as you prepare for the effective date.
Background
On November 2, 2022, the SEC adopted rule and form amendments that will require:
- Registered investment companies to disclose more detail on their proxy votes
- Institutional Investment Managers who are currently required to file Form 13F, to disclose their votes annually on executive compensation, referred to as “say-on-pay” votes, if they have the power to vote and exercise the power to influence a voting decision for the security. This is consistent with the mandate from Section 951 of the Dodd-Frank Act of 2010.
Note that all holdings will be considered, not just those filed on Form 13F.
Who it Affects
The changes affect the following current Form N-PX filers, and the following current Form 13F filers:
Current Form N-PX filers:
- Registered Investment Companies (such as Open-End Funds, Closed-End Funds, and ETFs) Must still file and will need to follow additional requirements
Current Form 13F filers:
- Institutional Investment Managers subject to Section 13(f) reporting are now required to file Form N-PX
There are no exceptions for 13F Filers from the Form N-PX requirements. Note that even institutional investment managers who have a disclosed policy of not voting proxies and did not vote during the reporting period must indicate so in a “Notice Report” without providing additional information about each voting matter individually. In this case, the manager would only file the cover page and required signature.
Timing
- Effective Date: July 1, 2024
- Compliance Date: August 31, 2024, for reports covering the period of July 1, 2023 to June 30, 2024
Managers will be required to file a report on Form N-PX with:
- Say-on-pay votes for the period ending June 30 for the calendar year following the manager’s initial filing on Form 13F
- Respect to any shareholder vote for the period July 1 through September 30 of the calendar year in which the manager’s final filing on Form 13F is due
Best Practices
Although the first filing is not until August 31, 2024, with recordkeeping having started on July 1, 2023, it’s important to ensure all processes are in order. Here are some reminders for making sure you’re on the right track:
- Review your recordkeeping practices. The information to be accounted for as well as the structure of such information will have been affected by the amendments.
- Confirm use of third parties. If the recordkeeping burden is too much, consider engaging with a vendor if not already [or using FilePoint’s template for the documentation of records, which can then be easily converted to XML]. Whichever vendor you have chosen, continue the conversation as they are implementing all updates to Form N-PX. Verify that your vendor has what they need and is prepared to see you through these changes.
- Review your current Form 13F, Form ADV 2A disclosure of proxy voting, and current proxy policy for any reportable data.
Questions? We can help.
Please let us know if we can assist with any questions you may have, or provide support with data conversion or provide a template for your recordkeeping.
