New Form N-PX Filing Requirement for Managers that File Form 13F
Form N-PX is a form used to report certain proxy votes. Historically, only mutual funds and other registered investment companies were required to file Form N-PX. Starting in August 2024, however, all institutional investment managers[1] that file Form 13F, including investment advisers solely to private funds (“Managers”), will also need to file Form N-PX to report their proxy votes with respect to “say on pay” proxy votes for which the Managers “exercised voting power” during the reporting period. Such Managers will not need to report on the other proxy voting categories described in Form N-PX that still apply to registered investment companies.
The first report on “say on pay” proxy votes by Managers is due on August 31, 2024, covering the period from July 1, 2023 to June 30, 2024.
“Say on pay” proxy votes under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include votes on executive compensation, executive compensation vote frequency and extraordinary transaction executive compensation. A Manager “exercises voting power” with respect to a “say on pay” matter when it (a) has the power to vote (or direct the voting of) a security or (b) uses its proxy voting authority to influence a voting decision. Thus, required reporting captures not just voting the security, but also recalling loaned securities or indirectly voting them through an agreement or relationship with another person.
Form N-PX consists of cover and summary pages that identify the Manager and whether any other Manager’s proxy voting record is included on the form. In addition, the Manager may indicate on the cover page that it did not exercise any voting power during the year, or that it has a clearly disclosed policy of not voting and it did not in fact vote any proxies during that year. If a Manager cannot check one of those boxes, it must list all the “say on pay” proxies it voted during the period covered by the report.
Managers required to report will need to track the following information to complete the table on Form N-PX for “say on pay” proxy votes: (1) the name of the issuer; (2) issuer CUSIP number; (3) the shareholder meeting date; (4) a description and categorization of the matter(s) voted on; (5) the number of shares voted and whether the Manager’s advised accounts had loaned out shares and not recalled them; (6) how the shares were voted on the proposal; and (7) whether those votes were for or against management’s recommendation.
The form and instructions are available here: Form N-PX (sec.gov).
If you have any questions about Form N-PX, please contact one of the Shartsis Friese attorneys in the Investment Funds & Advisers Group.
[1] Section 13(f)(6)(A) of the Exchange Act defines “institutional investment manager” as “any person, other than a natural person, investing in or buying and selling securities for its own account, and any person exercising investment discretion with respect to the account of any other person.”