The SEC believes the new requirements will balance investor informational needs, reporting burdens, and statutory obligations. Additionally, multiple parties could both have and exercise voting power over the same securities.
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Thus, the manager will have no reporting obligation when the client or another party determines how to vote a proxy.
The amendments focus on whether a manager influences a vote using its own independent judgment. 4 Voting power includes the ability to determine whether to vote the security or to recall a loaned security before a vote. 3Īn institutional investment manager will be required to report the say-on-pay votes only for a security over which the manager exercised its voting power to influence a voting decision for the security, either directly or indirectly by way of a contract, arrangement, understanding, or relationship. 2 The types of say-on-pay votes that managers must report include (1) votes on the approval of executive compensation, (2) votes on the frequency of such executive compensation approval votes, and (3) votes to approve “golden parachute” compensation in connection with a merger or acquisition. The amendments will require any institutional investment manager required to file Form 13F also to report annually its say-on-pay votes on Form N-PX. Say-on-Pay Disclosures - Applies to Registered Funds and 13F Filers Generally The SEC said that it believes the amendments will make these proxy voting records more user-friendly by improving investors’ ability to monitor how funds and managers vote and compare their voting records, thereby increasing transparency. The adopted rules are largely in line with the proposal from September 2021, with a few notable exceptions.Īmong other things, the amendments will require funds to categorize voting matters, structure and tag the data reported, and tie the description of each voting matter to the issuer’s form of proxy. 1 Additionally, any institutional investment manager who files Form 13F will be required to file Form N-PX to begin reporting proxy votes for the first time but limited to say-on-pay votes. Securities and Exchange Commission (SEC) adopted rule and form amendments to expand the information that mutual funds, closed-end funds, exchange-traded funds (ETFs), and other registered investment companies must disclose about their proxy votes. On November 2, 2022, by a vote of 3–2, the U.S.
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