[Federal Register Volume 75, Number 208 (Thursday, October 28, 2010)]
[Proposed Rules]
[Pages 66622-66642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26536]
[[Page 66621]]
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Part VI
Securities and Exchange Commission
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17 CFR Parts 240, 249, 270 et al.
Reporting of Proxy Votes on Executive Compensation and Other Matters;
Proposed Rule
Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 /
Proposed Rules
[[Page 66622]]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 240, 249, 270, and 274
[Release Nos. 34-63123; IC-29463; File No. S7-30-10]
RIN 3235-AK67
Reporting of Proxy Votes on Executive Compensation and Other
Matters
AGENCY: Securities and Exchange Commission.
ACTION: Proposed rule.
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SUMMARY: The Securities and Exchange Commission is proposing rule and
form amendments under the Securities Exchange Act of 1934 and the
Investment Company Act of 1940 that, if adopted, would require an
institutional investment manager that is subject to Section 13(f) of
the Securities Exchange Act to report annually how it voted proxies
relating to executive compensation matters as required by Section 14A
of the Securities Exchange Act, which was added by the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
DATES: Comments should be received on or before November 18, 2010.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml);
Send an e-mail to [email protected]. Please include
File Number S7-30-10 on the subject line; or
Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number S7-30-10. This file number
should be included on the subject line if e-mail is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments
are also available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street, NE., Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. All comments received will be posted without change; we do not
edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT: Alberto H. Zapata, Senior Counsel;
Michael C. Pawluk, Branch Chief; or Mark T. Uyeda, Assistant Director,
at (202) 551-6784, Office of Disclosure Regulation, Division of
Investment Management, Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-8549.
SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission
(``Commission'') is proposing new rule 14Ad-1 under the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and amendments to Form N-PX
\2\ under the Exchange Act and the Investment Company Act of 1940
(``Investment Company Act'').\3\ The Commission is also proposing a
technical amendment to rule 30b1-4 under the Investment Company Act.\4\
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\1\ 15 U.S.C. 78a et seq.
\2\ 17 CFR 274.129. Currently, Form N-PX is adopted under the
Investment Company Act only. In this release, we are proposing to
amend Form N-PX under both the Exchange Act and the Investment
Company Act.
\3\ 15 U.S.C. 80a-1 et seq.
\4\ 17 CFR 270.30b1-4.
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Table of Contents
I. Background
II. Proposed Amendments
A. Class of Reporting Persons
B. Scope of Reporting Obligation
1. Types of Votes Required To Be Reported
2. Voting Power
3. Securities With Respect to Which Votes Are Required To Be
Reported
C. Time of Reporting
D. Joint Reporting of Proxy Votes
E. Form N-PX Reports
1. The Cover Page
2. The Summary Page
3. Proxy Voting Information
F. Requests for Confidential Treatment
G. Technical and Conforming Amendments
H. Compliance Dates
III. General Request for Comments
IV. Paperwork Reduction Act
V. Cost/Benefit Analysis
VI. Consideration of Burden on Competition and Promotion of
Efficiency, Competition, and Capital Formation
VII. Initial Regulatory Flexibility Analysis
VIII. Consideration of Impact on the Economy
IX. Statutory Authority
Text of Proposed Rule and Form Amendments
I. Background
Section 951 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (``Dodd-Frank Act''),\5\ enacted on July 21, 2010, added
new Section 14A to the Exchange Act.\6\ Section 14A requires issuers to
provide shareholders with a vote on certain executive compensation
matters, and it requires certain institutional investment managers to
report how they voted on those matters.
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\5\ Public Law 111-203, 124 Stat. 1376 (2010).
\6\ To be codified at 15 U.S.C. 78n-1.
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Section 14A(a) requires that a proxy or consent or authorization
for an annual or other meeting of the shareholders for which the proxy
solicitation rules of the Commission require compensation disclosure
include: (1) Not less frequently than once every three years, a
separate resolution subject to shareholder vote to approve executive
compensation; and (2) not less frequently than once every six years, a
separate resolution subject to shareholder vote to determine whether
the required executive compensation votes will occur every one, two, or
three years. Section 14A(b) requires that any proxy or consent or
authorization relating to a meeting at which shareholders are asked to
approve an acquisition, merger, consolidation, or proposed sale or
other disposition of all or substantially all the assets of an issuer
include a separate resolution subject to shareholder vote to approve
executive compensation agreements and understandings that relate to the
transaction unless these agreements or understandings were subject to a
shareholder vote under Section 14A(a). The requirements for a vote on
executive compensation and on the frequency of the executive
compensation vote required by Section 14A(a) are effective for
shareholder meetings occurring on or after January 21, 2011.\7\ The
requirement for the vote on executive compensation agreements and
understandings that relate to certain transactions required by Section
14A(b) will be effective when the Commission's rules implementing that
provision become effective. In a companion release, we are proposing
rules to implement the voting requirements of Sections 14A(a) and (b)
of the Exchange Act.\8\
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\7\ See Section 14A(a)(3) of the Exchange Act (making the
requirements of Section 14A(a) effective for shareholder meetings
occurring after the end of the six-month period beginning on the
date of enactment of the Dodd-Frank Act).
\8\ Exchange Act Release No. 63124 (Oct. 18, 2010).
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Section 14A(d) of the Exchange Act requires that every
institutional investment manager subject to Section 13(f) of the
Exchange Act report at least annually how it voted on the executive
compensation-related shareholder votes
[[Page 66623]]
required by Sections 14A(a) and (b) (the ``Section 14A Votes''), unless
such vote is otherwise required to be reported publicly by rule or
regulation of the Commission. Today, we are proposing rule and form
amendments to implement this reporting requirement.
II. Proposed Amendments
To implement Section 14A(d) of the Exchange Act, we are proposing
new rule 14Ad-1 under the Exchange Act, which, if adopted, would
require institutional investment managers that are required to file
reports under Section 13(f) of the Exchange Act to file their record of
Section 14A Votes with the Commission annually on Form N-PX. We are
also proposing to amend Form N-PX, which is currently used by
registered management investment companies (``funds'') to file their
complete proxy voting records with the Commission, to accommodate the
new filings by institutional investment managers. In addition, we are
proposing certain technical and conforming amendments to our rules.
A. Class of Reporting Persons
We are proposing to require every institutional investment manager
(as that term is defined in Section 13(f)(6)(A) of the Exchange Act
\9\) that is required to file reports under Section 13(f) of the Act to
file its record of Section 14A Votes on Form N-PX.\10\ Thus, a person
will become subject to the new reporting requirement if it meets two
criteria: (1) The person is an institutional investment manager as
defined in Section 13(f)(6)(A) of the Exchange Act; and (2) the person
is required to file reports under Section 13(f) of the Exchange Act. As
described in the following paragraph, these are the same persons that
are required to report on Form 13F under the Exchange Act.\11\
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\9\ To be codified at 15 U.S.C. 78m(f)(6)(A). Section 929X of
the Dodd-Frank Act redesignated former Section 13(f)(5) of the
Exchange Act as Section 13(f)(6).
\10\ Proposed rule 14Ad-1.
\11\ Form 13F [17 CFR 249.325] is the form used for quarterly
securities holdings reports under Section 13(f) of the Exchange Act
by institutional investment managers that exercise investment
discretion with respect to accounts holding certain equity
securities having an aggregate fair market value of $100 million or
more.
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Section 13(f)(6)(A) of the Exchange Act defines the term
``institutional investment manager'' to include ``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.'' An institutional
investment manager is required to file reports under Section 13(f) if
the institutional investment manager exercises investment discretion
\12\ with respect to accounts holding Section 13(f) securities \13\
having an aggregate fair market value on the last trading day of any
month of any calendar year of at least $100 million.\14\ Institutional
investment managers meeting this threshold are required to file
quarterly reports with the Commission on Form 13F disclosing their
holdings of Section 13(f) securities for the final quarter of the
calendar year in which the threshold is met and continuing for each of
the first three quarters of the subsequent calendar year.\15\ In order
to implement the requirement of Section 14A(d) of the Exchange Act that
``every institutional investment manager subject to section 13(f)'' of
the Exchange Act report its Section 14A Votes, we are proposing that an
institutional investment manager required to report on Form 13F would
also be required to report its Section 14A Votes on Form N-PX.
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\12\ ``Investment discretion'' has the meaning set forth in
Section 3(a)(35) of the Exchange Act [15 U.S.C. 78c(a)(35)]. In
addition, an institutional investment manager is ``deemed to
exercise `investment discretion' with respect to all accounts over
which any person under its control exercises investment
discretion.'' Rule 13f-1(b) under the Exchange Act [17 CFR 240.13f-
1(b)].
Under Section 3(a)(35) of the Exchange Act, ``a person exercises
`investment discretion' with respect to an account if, directly or
indirectly, such person (A) is authorized to determine what
securities or other property shall be purchased or sold by or for
the account, (B) makes decisions as to what securities or other
property shall be purchased or sold by or for the account even
though some other person may have responsibility for such investment
decisions, or (C) otherwise exercises such influence with respect to
the purchase and sale of securities or other property by or for the
account as the Commission, by rule, determines, in the public
interest or for the protection of investors, should be subject to
the operation of the provisions of this title and the rules and
regulations thereunder.''
\13\ ``Section 13(f) securities'' mean ``equity securities of a
class described in section 13(d)(1) of the [Exchange] Act that are
admitted to trading on a national securities exchange or quoted on
the automated quotation system of a registered securities
association.'' Rule 13f-1(c) under the Exchange Act [17 CFR 240.13f-
1(c)]. Equity securities of a class described in Section 13(d)(1) of
the Exchange Act [15 U.S.C. 78m(d)(1)] include, among other things,
equity securities of a class which is registered pursuant to Section
12 of the Exchange Act, equity securities of an insurance company
which would have been required to be so registered except for the
exemption contained in Section 12(g)(2)(G) of the Exchange Act, and
equity securities issued by a closed-end investment company
registered under the Investment Company Act. The Commission
publishes a list of Section 13(f) securities that is available on
the Commission's Internet Web site at: http://www.sec.gov/divisions/investment/13flists.htm.
\14\ Section 13(f)(1) of the Exchange Act [15 U.S.C. 78m(f)(1)];
rule 13f-1(a)(1) under the Exchange Act [17 CFR 240.13f-1(a)(1)].
\15\ Rule 13f-1(a)(1).
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B. Scope of Reporting Obligation
We are proposing to require an institutional investment manager
that is required to report on Form N-PX to include in the report the
manager's proxy voting record (1) for each shareholder vote pursuant to
Sections 14A(a) and (b) of the Exchange Act (2) with respect to which
the manager, whether directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, had or shared
the power to vote, or to direct the voting of, (3) any security.
1. Types of Votes Required To Be Reported
We are proposing to require an institutional investment manager
that would be required to report on Form N-PX to include in the report
the manager's record for each shareholder vote pursuant to Sections
14A(a) and (b) of the Exchange Act, i.e., Section 14A Votes.\16\ The
scope of votes that would be required to be reported under the proposal
is the same as the scope provided by new Section 14A(d) of the Exchange
Act. The institutional investment manager, therefore, would be required
to report votes required by Section 14A(a) on the approval of executive
compensation and on the frequency of executive compensation approval
votes, as well as votes required by Section 14A(b) on the approval of
executive compensation that relates to an acquisition, merger,
consolidation, or proposed sale or other disposition of all or
substantially all the assets of an issuer. Institutional investment
managers would not be required to include votes on any other matters in
the reports on Form N-PX.\17\
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\16\ Proposed rule 14Ad-1(a); proposed Item 1 of Form N-PX.
\17\ Funds would continue to be required to report their
complete proxy voting record on Form N-PX. See rule 30b1-4 under the
Investment Company Act; current and proposed Item 1 of Form N-PX
(requiring disclosure of proxy voting information ``for each matter
relating to a portfolio security considered at any shareholder
meeting held during the period covered by the report and with
respect to which the [fund] was entitled to vote'').
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2. Voting Power
Under the proposal, an institutional investment manager would be
required to report a Section 14A Vote for a security only if the
manager, whether directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, had or shared
the power to vote, or to direct the voting of, the security.\18\ An
institutional
[[Page 66624]]
investment manager would be required to report a Section 14A Vote if
the manager had or shared voting power over the particular Section 14A
Vote, without regard to whether the manager had voting power over other
matters. Whether a manager has the requisite voting power would depend
on an analysis of all the relevant facts and circumstances.\19\
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\18\ Proposed rule 14Ad-1(a); proposed Item 1 of Form N-PX. This
is similar to the language of rule 13d-3(a) under the Exchange Act
[17 CFR 240.13d-3(a)], which provides that a beneficial owner of a
security includes any person who, ``directly or indirectly, through
any contract, arrangement, understanding, relationship, or otherwise
has or shares * * * [v]oting power which includes the power to vote,
or to direct the voting of, such security. * * *''
\19\ Cf. Exchange Act Release No. 13291 (Feb. 24, 1977) [42 FR
12342, 12344 (Mar. 3, 1977)] (stating that ``[a]n analysis of all
relevant facts and circumstances in a particular situation is
essential in order to identify each person possessing the requisite
voting power'' to be considered a beneficial owner within the
meaning of rule 13d-3 under the Exchange Act).
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Basing an institutional investment manager's requirement to report
a Section 14A Vote on whether it has or shares voting power with
respect to the Section 14A Vote appears to be consistent with the plain
language of Section 14A(d), which requires a manager to report on ``how
it voted'' on Section 14A Votes. In the case of Section 14A Votes where
an institutional investment manager does not have or share voting
power, the manager would not, in our view, have anything to report
under this statutory language.\20\
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\20\ This could arise, for example, where an investment manager
to a plan that is subject to the Employee Retirement Income Security
Act of 1974 (``ERISA'') [29 U.S.C. 1001 et seq.] is expressly
precluded from voting proxies by the plan document or the investment
management contract. See 29 CFR 2509.08-2 (``DOL Interpretive
Bulletin'').
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We note that reporting on Form 13F is based on ``investment
discretion'' rather than ``voting power.'' \21\ As a result, the use of
a test based on voting power for Form N-PX may contribute to
discrepancies between securities reported by an institutional
investment manager on Form 13F and securities for which votes are
reported on Form N-PX. For example, if an institutional investment
manager exercises investment discretion with respect to a particular
Section 13(f) security held in a client's account, but the client
retains all rights to vote proxies with respect to the security, the
manager would report that security on its holdings report on Form 13F
if it held the security at the end of a calendar quarter, but would not
report any Section 14A Votes with respect to that security under our
proposal.\22\ Similarly, an institutional investment manager that has
or shares voting power over a security, but is not required to report
the security on Form 13F because it does not have investment discretion
over the security, would be required to report Section 14A Votes with
respect to that security provided that the institutional investment
manager is otherwise required to file reports under Section 13(f) of
the Exchange Act.
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\21\ Rule 13f-1(a)(1); General Instruction 1 to Form 13F. See
supra note 12 (explaining ``investment discretion'').
\22\ There are other circumstances in which the securities
reported by an institutional investment manager on Form 13F may not
correspond to the securities for which Section 14A Votes are
reported by the manager on Form N-PX. For example, a manager may
have voted proxies for a particular security and subsequently
disposed of the security prior to the end of the calendar quarter.
Under these circumstances, the proxy votes would be disclosed on the
manager's Form N-PX report, but the holdings would not be included
on a Form 13F report. See also discussion infra Part II.B.3
(discussing differences in reporting between Form 13F and Form N-
PX).
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We request comment on the use of voting power as the basis for
determining which Section 14A Votes would be reported by an
institutional investment manager and, in particular, on the following
issues:
Should the reporting requirement be based on having the
power to vote with respect to Section 14A Votes or should we use some
other basis, such as investment discretion? Should we, as proposed,
base the requirement to file on a manager having either sole or shared
voting power?
Should we provide guidance concerning the circumstances
under which a manager has sole or shared voting power? For example,
would it be helpful for the Commission to provide guidance regarding
the application of the Form N-PX ``sole or shared voting power''
standard as it would apply to ERISA plans? Commenters who believe that
guidance would be helpful are asked to specify the nature of the
guidance that would be helpful.
3. Securities With Respect to Which Votes Are Required To Be Reported
We are proposing that an institutional investment manager report
Section 14A Votes with respect to ``any security'' with respect to
which it meets the voting power test described above. Thus, we are not
proposing to limit in any way the types of securities with respect to
which an institutional investment manager must report its Section 14A
Votes.\23\ As a result, the proposal would require an institutional
investment manager to report Section 14A Votes with respect to a
security without regard to whether the manager had previously reported
or been required to report the security as a holding on Form 13F. For
example, on Form 13F, a manager reports its holdings as of the end of
the quarterly reporting period and is permitted to omit holdings of
fewer than 10,000 shares (or less than $200,000 principal amount in
case of convertible debt securities) and less than $200,000 aggregate
fair market value.\24\ Under the proposal, an institutional investment
manager would be required to report Section 14A Votes without regard to
whether the securities were held as of the close of any quarter and
without regard to the size of the holding.
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\23\ Section 14A(a), by its terms, applies to a proxy or consent
or authorization for a shareholder meeting ``for which the proxy
solicitation rules of the Commission require compensation
disclosure.'' Section 14A(b), by its terms, applies to any proxy or
consent or authorization relating to ``proxy or consent solicitation
material (the solicitation of which is subject to the rules of the
Commission pursuant to [Section 14A(a)]).'' The proxy rules apply to
the solicitation of any proxy or consent or authorization in respect
of any security (other than an exempted security) registered
pursuant to Section 12 of the Exchange Act. Section 14(a) of the
Exchange Act [15 U.S.C. 78n(a)]. See note 13 for a description of
the securities required to be reported on Form 13F.
\24\ See General Instruction 3 and Special Instruction 10 to
Form 13F.
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We request comment on the securities for which institutional
investment managers would be required to file proxy voting records on
Form N-PX, and, in particular, on the following issues:
Should we, as proposed, require institutional investment
managers to report Section 14A Votes with respect to ``any security?''
Should we, instead, limit in any way the securities with respect to
which Section 14A Votes are required to be reported? For example,
should we require Section 14A Votes to be reported only with respect to
securities that a manager has previously reported or been required to
report on Form 13F?
Should we prescribe any threshold position size below
which a manager would not be required to report its Section 14A Votes?
For example, consistent with Form 13F, should a manager be permitted to
omit Section 14A Votes from Form N-PX reports with respect to
securities where it held fewer than 10,000 shares (or less than
$200,000 principal amount in case of convertible debt securities) and
less than $200,000 aggregate fair market value? If we adopt a reporting
threshold that is different from the Form 13F reporting threshold, or
adopt no threshold, will this make the information required to be
reported on Form N-PX more difficult to track or impose any other
burdens?
[[Page 66625]]
C. Time of Reporting
We are proposing to require institutional investment managers to
report their Section 14A Votes annually on Form N-PX not later than
August 31 of each year, for the most recent twelve-month period ended
June 30.\25\ This is the same schedule on which funds are required to
report their complete proxy voting records on Form N-PX.\26\ This
reporting schedule is intended to have the same advantages for
institutional investment manager reporting that it has for funds,
namely, each institutional investment manager's proxy voting record
will be available within a relatively short period of time after the
proxy voting season, and all institutional investment managers will
provide their voting records over a uniform July 1-June 30 period.\27\
A uniform reporting schedule for all institutional investment managers
and funds also would facilitate joint reporting that would eliminate
duplicative vote reporting by multiple entities.\28\
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\25\ Proposed rule 14Ad-1(a); proposed General Instruction A to
Form N-PX.
\26\ Rule 30b1-4.
\27\ See Investment Company Act Release No. 25922 (Jan. 31,
2003) [68 FR 6564, 6569 (Feb. 7, 2003)] (``Form N-PX Adopting
Release'') (noting that the approach taken under Form N-PX ``will
have the advantages of making each fund's proxy voting record
available within a relatively short period of time after the proxy
voting season, [footnote omitted] and of providing disclosure of all
funds' proxy voting records over a uniform period of time'').
\28\ As outlined in Part II.D below, our proposal would, under
some circumstances, permit an institutional investment manager to
satisfy all or part of its reporting obligations by referencing the
proxy voting record that is reported on Form N-PX by a fund or
another institutional investment manager.
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We are proposing transition rules that govern the timing of an
institutional investment manager's Form N-PX filing obligations
whenever the manager enters and exits from the obligation to file Form
13F reports. An institutional investment manager would not be required
to file a Form N-PX report for the twelve-month period ending June 30
of the calendar year in which the manager's initial filing on Form 13F
is due.\29\ For this purpose, an ``initial filing'' on Form 13F means
any quarterly filing on Form 13F if no filing on Form 13F was required
for the immediately preceding calendar quarter.\30\ This transition
rule is intended to provide institutional investment managers who
become subject to the requirement to file Form N-PX reports sufficient
time to implement the systems needed to record and report proxy votes.
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\29\ Proposed rule 14Ad-1(b); proposed General Instruction A to
Form N-PX.
\30\ Proposed rule 14Ad-1(b); proposed General Instruction A to
Form N-PX.
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For example, assume that an institutional investment manager does
not meet the $100 million threshold test on the last trading day of any
month in 2012 but does meet the $100 million threshold test on the last
trading day of at least one month in 2013. As a result, the
institutional investment manager is not required to file a Form 13F
report in 2013 but is required to file a Form 13F report no later than
February 14, 2014, for the period ending December 31, 2013.\31\ Under
the proposal, the manager would not be required to file a Form N-PX
report for the twelve-month period ending June 30, 2014, but would be
required to file a Form N-PX report no later than August 31, 2015, for
the twelve-month period from July 1, 2014, through June 30, 2015. The
manager would have a minimum of six months (December 31, 2013-June 30,
2014) before it is required to begin recording its Section 14A Votes
for the purposes of reporting on Form N-PX.\32\
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\31\ The obligation to file Form 13F arises when an
institutional investment manager exercises investment discretion
over accounts holding at least $100 million in Section 13(f)
securities as of the ``last trading day of any month of any calendar
year.'' However, the manager's obligation to file Form 13F commences
with the report for December 31 of that year, which is required to
be filed within 45 days after December 31. Rule 13f-1(a)(1); General
Instruction 1 to Form 13F.
\32\ An institutional investment manager who crosses the $100
million threshold for the first time on December 31, 2013, would
have six months before it is required to begin recording Section 14A
Votes on July 1, 2014. By contrast, an institutional investment
manager that passes the $100 million threshold on January 31, 2013,
would have 17 months before it is required to begin recording
Section 14A Votes on July 1, 2014.
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In addition, an institutional investment manager would not be
required to file a report on Form N-PX with respect to any shareholder
vote at a meeting that occurs after September 30 of the calendar year
in which the manager's final filing on Form 13F is due. For this
purpose, a ``final filing'' on Form 13F means any quarterly filing on
Form 13F if no filing on Form 13F is required for the immediately
subsequent calendar quarter.\33\ Instead, the manager would be required
to file a report on Form N-PX for the period July 1 through September
30 of the calendar year in which the manager's final filing on Form 13F
is due. This short-period Form N-PX filing would be due no later than
February 28 of the immediately following calendar year.\34\ An
institutional investment manager's obligation to file Form 13F reports
always terminates with the September 30 report,\35\ and this transition
rule conforms the ending date for reporting Schedule 14A Votes with the
ending date for Form 13F reporting. The February 28 due date provides a
two-month period for filing after December 31, when the manager's Form
13F filing status will be determined for the coming year.\36\
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\33\ Proposed rule 14Ad-1(c); proposed General Instruction A to
Form N-PX.
\34\ Proposed rule 14Ad-1(c); proposed General Instruction A to
Form N-PX.
\35\ See rule 13f-1(a) (institutional investment manager that
meets $100 million threshold on last trading day of any calendar
year is required to file Form 13F for December 31 of that year and
the first three calendar quarters of the subsequent calendar year).
\36\ An institutional investment manager is required to file a
report on Form 13F in the coming year if it meets the $100 million
threshold on the last trading day of any month of the current
calendar year. As a result, in cases where the manager does not meet
the threshold in January through November, its status will not be
determined until December 31.
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For example, assume that an institutional investment manager ceases
to meet the $100 million threshold in 2015. The manager's final report
on Form 13F would be filed for the quarter ended September 30, 2015.
The manager's final report on Form N-PX would include all Section 14A
Votes cast during the period from July 1, 2015, through September 30,
2015, and would be required to be filed no later than February 28,
2016.
We request comment on the proposed time of reporting rules for
institutional investment managers required to file Form N-PX reports
and, in particular, on the following issues:
Should we, as proposed, require institutional investment
managers to report their Section 14A Votes annually on Form N-PX not
later than August 31, for the most recent twelve-month period ended
June 30? Should we instead require reporting as of some other period
end date (e.g., May 31 or December 31), or with a shorter or longer lag
period after the end of the reporting period (e.g., 1 month, 3 months,
or 6 months)? Should we require reporting to occur more frequently than
annually (e.g., monthly, quarterly, or semi-annually)? If we require
reporting on a schedule other than that proposed, should we also change
the schedule on which funds report so that institutional investment
managers and funds would report on the same schedule?
We are proposing that an institutional investment manager
would not be required to file a Form N-PX report for the twelve-month
period ending June 30 of the calendar year in which the manager's
initial filing on Form 13F is due. Is this transition rule appropriate
for managers entering the
[[Page 66626]]
Form 13F and Form N-PX filing requirements, or is some other rule more
appropriate? For example, should we require an institutional investment
manager to report Section 14A Votes for the period commencing January 1
(rather than July 1) of the calendar year in which the manager's
initial filing on Form 13F is due? Or should we require an
institutional investment manager to report Section 14A Votes for the
period commencing on the first day of the month immediately following
the date on which it meets the $100 million threshold? That is, if a
manager meets the $100 million threshold on the last trading day of
August 2013, should the manager be required to report Section 14A Votes
commencing September 1, 2013, rather than July 1, 2014, as proposed? If
we require institutional investment managers to report Section 14A
Votes for periods earlier than proposed, what, if any, implementation
issues would this raise for managers?
Should we, as proposed, not require an institutional
investment manager to file a Form N-PX report with respect to any
shareholder vote at a meeting that occurs after September 30 of the
calendar year in which the manager's final filing on Form 13F is due?
Should we, instead, require an institutional investment manager to
report Section 14A Votes cast at meetings that occur during some period
after September 30 of the calendar year in which the manager's final
filing on Form 13F is due? If so, what should that period be?
D. Joint Reporting of Proxy Votes
Section 14A(d) of the Exchange Act requires an institutional
investment manager to report any Section 14A Vote ``unless such vote is
otherwise required to be reported publicly by rule or regulation of the
Commission.'' In order to implement this provision and prevent
duplicative reporting, we are proposing amendments to Form N-PX that
would permit (1) a single institutional investment manager to report
Section 14A Votes in cases where multiple institutional investment
managers share voting power; and (2) an institutional investment
manager to satisfy its reporting obligations by reference to the Form
N-PX report of a fund that includes the manager's Section 14A Votes.
This method for prevention of duplicative reporting is similar to that
employed by Form 13F, which permits a single manager to include
information regarding securities with respect to which multiple
managers exercise investment discretion.\37\
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\37\ See Section 13(f)(6)(B) of the Exchange Act [to be codified
at 15 U.S.C. 78m(f)(6)(B)] (directing the Commission to ``adopt such
rules as it deems necessary or appropriate to prevent duplicative
reporting * * * by two or more institutional investment managers
exercising investment discretion with respect to the same amount'');
General Instruction 2 to Form 13F.
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We are proposing that if two or more institutional investment
managers, each of which is required to report on Form N-PX for the
reporting period, shared the power to vote, or to direct the voting of,
the same securities on a Section 14A Vote, only one such manager must
include the information regarding that vote in its Form N-PX
report.\38\ In addition, an institutional investment manager would not
be required to report Section 14A Votes that are reported on a Form N-
PX report that is filed by a fund.\39\ An institutional investment
manager may, however, choose to report Section 14A Votes that are also
reported by another institutional investment manager or a fund.
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\38\ Proposed General Instruction D.1 to Form N-PX.
\39\ Proposed General Instruction D.2 to Form N-PX. Because Form
N-PX will permit cross-references to Form N-PX reports filed by
other institutional investment managers and by funds, we propose to
delete the current instruction that prohibits incorporating any
information by reference. See current General Instruction D to Form
N-PX.
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If an institutional investment manager's Section 14A Votes are
reported by another institutional investment manager or a fund, the
non-reporting manager must file a Form N-PX report that identifies each
institutional investment manager and fund reporting on its behalf.\40\
The Form N-PX report of an institutional investment manager that, as
permitted, reports Section 14A Votes that are subject to shared voting
power must identify any other institutional investment managers on
whose behalf the filing is made.\41\ The Form N-PX report of a fund
that reports proxy votes that would otherwise be required to be
reported by an institutional investment manager must identify any
institutional investment managers on whose behalf the filing is
made.\42\ This information is intended to help users of Form N-PX to
readily identify all reports that contain Section 14A Votes of a
particular manager.
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\40\ Proposed General Instruction D.3 to Form N-PX.
\41\ Proposed General Instruction D.4 to Form N-PX.
\42\ Proposed General Instruction D.5 to Form N-PX.
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We request comment on the proposal to address duplicative reporting
and, in particular, on the following issues:
Should we, as proposed, permit a single institutional
investment manager to report Section 14A Votes in cases where multiple
institutional investment managers share voting power? Should we, as
proposed, permit an institutional investment manager to satisfy its
reporting obligations by reference to the Form N-PX report of a fund
that includes the manager's Section 14A Votes? Is there any reason not
to permit joint reporting, e.g., would it confuse users of Form N-PX or
make Form N-PX harder to use? Are there other ways to address
potentially duplicative reporting that are consistent with Section
14A(d) of the Exchange Act and that we should consider? Should we
prohibit an institutional investment manager from reporting Section 14A
Votes that are also reported by another manager or a fund? Would it
confuse users of Form N-PX if, as permitted, joint reporting of Section
14A Votes is optional?
E. Form N-PX Reports
We are proposing to amend Form N-PX to accommodate reporting of
Section 14A Votes by institutional investment managers. The amended
form, as proposed, consists of three parts: Cover Page, Summary Page,
and required proxy voting information.\43\ The Cover Page and the
Summary Page information would be required to be presented in the
format and order provided in the form, and additional information would
not be permitted in the Cover Page or Summary Page.\44\ A report filed
by an institutional investment manager would be required to be signed
on behalf of the manager by an authorized person.\45\
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\43\ Proposed Special Instruction A.1 to Form N-PX.
\44\ Proposed Special Instruction A.2 to Form N-PX.
\45\ Proposed General Instruction E.2.a to Form N-PX. A report
filed by a fund would continue to be required to be signed on behalf
of the fund by its principal executive officer or officers. Id.;
current General Instruction F.2 to Form N-PX.
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1. The Cover Page
The Cover Page of Form N-PX would, as it does today, require the
name of the reporting person, the address of its principal executive
offices, the name and address of the agent for service, the telephone
number of the reporting person, identification of the reporting period,
and the reporting person's file number.\46\ We are proposing to delete
the requirement that the Cover Page include the date of the reporting
person's fiscal year end which currently applies to Form N-PX filings
by funds
[[Page 66627]]
because the fiscal year end of the reporting person appears to be
unrelated to the information reported on Form N-PX, which would be
filed on a uniform July 1-June 30 basis. In addition, for funds, the
fiscal year end information in Form N-PX duplicates information that is
required in other Commission filings.\47\
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\46\ In the case of a fund, the file number is an Investment
Company Act number beginning ``811-.'' In the case of an
institutional investment manager, the file number is a Form 13F
number beginning ``28-.''
\47\ See, e.g., Form N-CSR [17 CFR 249.331 and 274.128] (cover
page); Form N-Q [17 CFR 249.332 and 274.130] (cover page).
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Currently, Form N-PX does not expressly provide for amendments to a
previously filed report. We are proposing to include a new section on
the Cover Page of Form N-PX to be used in cases where the filing is an
amendment to a previously filed Form N-PX report, e.g., to correct
errors in a previous filing or as part of the confidential treatment
process.\48\ This information is intended to facilitate the ability of
users to link the information in multiple Form N-PX filings for a
single reporting person that all relate to the same filing period.
Amendments to a Form N-PX report must either restate the Form N-PX
report in its entirety or include only information that is being
reported in addition to the information already reported in a Form N-PX
report for the same period. If a Form N-PX report is filed as an
amendment, then the reporting person must check the amendment box on
the Cover Page, enter the amendment number, and check the appropriate
box to indicate whether the amendment is a restatement or adds new
proxy voting entries.\49\
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\48\ See, e.g., proposed Confidential Treatment Instruction 7 to
Form N-PX (regarding the filing of amendments upon the final adverse
disposition of a confidential treatment request or the expiration of
previously granted confidential treatment).
\49\ Proposed Special Instruction B.1 to Form N-PX.
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We are also proposing to require that the Cover Page include
information that will help users to identify whether the reporting
person is a fund or an institutional investment manager. If the
reporting person is an institutional investment manager, this
information would also help users to identify reports filed by other
institutional investment managers and funds that contain Section 14A
Votes of the reporting person under the provisions to prevent
duplicative reporting. Specifically, the reporting person would be
required to check a box in order to identify the report as one of the
following four types: (1) Registered management investment company
report; (2) institutional investment manager ``voting'' report when the
report contains all Section 14A Votes of the manager; (3) institutional
investment manager ``notice'' when the report contains no Section 14A
Votes of the manager and all Section 14A Votes are reported by other
institutional investment managers or funds under the provisions to
prevent duplicative reporting; and (4) institutional investment manager
``combination'' report when the report contains some Section 14A Votes
of the manager and some Section 14A Votes of the manager are reported
by other institutional investment managers or funds under the
provisions to prevent duplicative reporting. In addition, when the
report type is in the third or fourth category, the Cover Page would be
required to include a list of the file numbers and names of the other
institutional investment managers and funds whose Form N-PX reports
include Section 14A Votes of the reporting manager.\50\
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\50\ Proposed Special Instruction B.2 to Form N-PX.
---------------------------------------------------------------------------
We request comment on the proposed Cover Page of Form N-PX and, in
particular, on the following issues:
Should we adopt the Cover Page as proposed, or should we
modify it in any way, e.g., by adding or removing information? Would
the proposed Cover Page adequately identify the reporting person and
the reporting period? Would the proposed Cover Page adequately enable
users to identify a reporting person's Form N-PX report for a given
period and any amendments to that report? Would the proposed Cover Page
adequately enable users to identify the type of reporting person? In
the case of a report filed by an institutional investment manager,
would the proposed Cover Page adequately enable users to identify
reports filed by other persons that contain Section 14A Votes for which
the manager had, or shared, voting power?
2. The Summary Page
We are proposing to add a new Summary Page to Form N-PX that is
similar to the Summary Page in Form 13F and that is intended to enable
users to readily identify any institutional investment managers (in
addition to the person filing the report) whose Section 14A Votes are
included on the Form N-PX report under the provisions to prevent
duplicative reporting.\51\ The Summary Page would be required to be
included in any Form N-PX report that is filed by a fund.\52\ It would
also be required in any Form N-PX report filed by an institutional
investment manager other than a ``notice'' report.\53\ The Summary Page
would not be required in a ``notice'' report because a notice report
could not contain any Section 14A Votes at all and, therefore, would
not contain any Section 14A Votes of other institutional investment
managers.
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\51\ See Special Instructions to Form 13F (discussing the
Summary Page).
\52\ Proposed Special Instruction B.2.a to Form N-PX.
\53\ Proposed Special Instructions B.2.b-d to Form N-PX.
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The Summary Page of a Form N-PX report would be required to state
the total number of institutional investment managers, not counting the
reporting person, whose Section 14A Votes are included in the report.
If there are no such institutional investment managers, the number zero
(``0'') should be entered.\54\ The Summary Page would also be required
to include a list of the institutional investment managers, other than
the reporting person, whose Section 14A Votes are included. This
information would be required to be provided using the title (i.e.,
``List of Included Institutional Managers''), column headings, and
format indicated in Form N-PX.\55\ If a Form N-PX report does not
report the proxy votes of an institutional investment manager other
than the reporting person, the word ``NONE'' would be entered under the
title and the column headings and list entries would not be
included.\56\ If a Form N-PX report does report the proxy votes of one
or more institutional investment managers other than the reporting
person, the list would be required to include all such managers (not
including the reporting person) together with their respective Form 13F
file numbers. In addition, each such manager in the list should be
assigned a number (which need not be consecutive), and the list should
be presented in sequential order.\57\ These numbers would be used in
identifying the particular manager(s) who had or shared the power to
vote, or to direct the voting of, the securities voted.\58\ Requiring
the list to be sequential is intended to make the list easier to use.
Permitting the list to be non-consecutive is intended to facilitate
assigning the same number to the same manager across filings of
different reporting persons and different time periods.
---------------------------------------------------------------------------
\54\ Proposed Special Instruction C.1 to Form N-PX.
\55\ Proposed Special Instruction C.2 to Form N-PX.
\56\ Proposed Special Instruction C.2.a to Form N-PX.
\57\ Proposed Special Instruction C.2.b to Form N-PX. Cf.
Special Instruction 8.b to Form 13F (requirement to assign
sequential numbers to managers included in another manager's report
on Form 13F).
\58\ See infra note 87 and accompanying text.
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[[Page 66628]]
We request comment on the proposed Summary Page of Form N-PX and,
in particular, on the following issues:
Should we adopt the Summary Page, as proposed, or should
we modify it in any way? Will the Summary Page enable users to readily
identify any institutional investment managers whose Section 14A Votes
are included in a Form N-PX report?
3. Proxy Voting Information
We are proposing to require an institutional investment manager to
disclose information for each Section 14A Vote relating to any security
considered at any shareholder meeting held during the reporting period
and with respect to which the manager had voting power.\59\ If an
institutional investment manager does not have any Section 14A Votes to
report for the reporting period, the manager would be required to file
a report with the Commission stating that the manager does not have
proxy votes to report.\60\ However, an institutional investment manager
that files a ``notice'' report to indicate that the manager's Section
14A Votes are reported by other institutional investment managers or
funds should file a Cover Page and required signature only and should
not include a statement that the manager does not have proxy votes to
report.\61\
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\59\ Proposed Item 1 of Form N-PX. As is currently the case, a
fund would be required to disclose information for each matter
relating to a portfolio security considered at any shareholder
meeting held during the period covered by the report and with
respect to which the fund was entitled to vote. See current and
proposed Item 1 of Form N-PX.
\60\ Proposed Item 1 of Form N-PX.
\61\ Proposed Special Instruction B.2.c to Form N-PX.
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We are proposing to require that the following information be
disclosed for each proxy vote that is required to be included in a Form
N-PX report of an institutional investment manager or a fund.\62\ The
information would be required to be disclosed in the order presented
below.\63\
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\62\ As is currently the case, if a fund offers multiple series
of shares, the required information must be provided separately for
each series. The term ``series'' means shares offered by a fund that
represent undivided interests in a portfolio of investments and that
are preferred over all other series of shares for assets
specifically allocated to that series in accordance with rule 18f-
2(a) under the Investment Company Act [17 CFR 270.18f-2(a)].
Proposed Special Instruction D.5 to Form N-PX; current Instruction 1
to Item 1 of Form N-PX.
\63\ Proposed Special Instruction D.1 to Form N-PX.
---------------------------------------------------------------------------
The name of the issuer of the security; \64\
---------------------------------------------------------------------------
\64\ Proposed Item 1(a) of Form N-PX.
---------------------------------------------------------------------------
The exchange ticker symbol of the security; \65\
---------------------------------------------------------------------------
\65\ Proposed Item 1(b) of Form N-PX. As is currently the case,
the exchange ticker symbol may be omitted if it is not available
through reasonably practicable means, e.g., in the case of certain
securities of foreign issuers. Proposed Special Instruction D.2 to
Form N-PX; current Instruction 2 to Item 1 of Form N-PX.
---------------------------------------------------------------------------
The Council on Uniform Securities Identification
Procedures (``CUSIP'') number for the security; \66\
---------------------------------------------------------------------------
\66\ Proposed Item 1(c) of Form N-PX. As is currently the case,
the CUSIP number may be omitted if it is not available through
reasonably practicable means, e.g., in the case of certain
securities of foreign issuers. Proposed Special Instruction D.2 to
Form N-PX; current Instruction 2 to Item 1 of Form N-PX.
---------------------------------------------------------------------------
The shareholder meeting date; \67\
---------------------------------------------------------------------------
\67\ Proposed Item 1(d) of Form N-PX.
---------------------------------------------------------------------------
A brief identification of the matter voted on; \68\
---------------------------------------------------------------------------
\68\ Proposed Item 1(e) of Form N-PX.
---------------------------------------------------------------------------
For reports filed by funds (but not by institutional
investment managers), whether the matter was proposed by the issuer or
by a security holder; \69\
---------------------------------------------------------------------------
\69\ Proposed Item 1(f) of Form N-PX.
---------------------------------------------------------------------------
The number of shares the reporting person was entitled to
vote (for funds) or had or shared voting power over (for institutional
investment managers); \70\
---------------------------------------------------------------------------
\70\ Proposed Item 1(g) of Form N-PX.
---------------------------------------------------------------------------
The number of shares that were voted; \71\
---------------------------------------------------------------------------
\71\ Proposed Item 1(h) of Form N-PX.
---------------------------------------------------------------------------
How the reporting person voted those shares (e.g., for or
against proposal, or abstain; for or withhold regarding election of
directors) and, if the votes are cast in multiple manners (e.g., for
and against), the number of shares voted in each manner; \72\
---------------------------------------------------------------------------
\72\ Proposed Item 1(i) of Form N-PX. In the case of votes on
the frequency of executive compensation votes, there would be four
potential ways of voting (1-year frequency, 2-year frequency, 3-year
frequency, or abstain).
---------------------------------------------------------------------------
Whether the vote was for or against management's
recommendation; \73\ and
---------------------------------------------------------------------------
\73\ Proposed Item 1(j) of Form N-PX.
---------------------------------------------------------------------------
Identification of each institutional investment manager on
whose behalf the Form N-PX report is filed (other than the reporting
person) and who had or shared voting power as to the securities voted
by the number assigned to the institutional investment manager in the
Summary Page.\74\
---------------------------------------------------------------------------
\74\ Proposed Item 1(k) of Form N-PX.
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This information, which is intended to identify the security voted,
the matter with respect to which the vote occurred, and how the
reporting person voted, is substantially the same as the information
currently required by Form N-PX. However, we are proposing to modify
the format and content of the information that is currently required by
Form N-PX in the following ways: (1) The information would be required
to appear in a standardized order; (2) institutional investment
managers would not be required to disclose whether a matter was
proposed by the issuer or by a security holder; (3) information would
be required about the number of shares the reporting person was
entitled to vote (for funds) or had or shared voting power over (for
institutional investment managers), and the number of shares that were
voted; (4) the institutional investment managers who had or shared
voting power for a matter would be identified; and (5) standardized
descriptions would be required for Section 14A Votes.
As noted above, we are proposing to amend Form N-PX to require that
information be disclosed in a standardized order.\75\ This change is
intended to facilitate comparisons of voting records among reporting
persons.\76\ This requirement would apply to both institutional
investment managers and funds.
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\75\ See proposed Special Instruction D.1 to Form N-PX.
\76\ In July of this year, we published a concept release in
which we requested comment on amending Form N-PX to require either a
standardized reporting format or tagged information in order to
facilitate comparisons of proxy voting records among funds. See
Exchange Act Release No. 62495 (July 14, 2010) [75 FR 42982, 43008
(July 22, 2010)] (``Concept Release''). The comment period for the
Concept Release closes on October 20, 2010.
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As proposed, Form N-PX would continue to require funds to disclose
whether a matter was proposed by the issuer or by a security holder,
but would not extend this requirement to institutional investment
managers.\77\ We are not proposing that institutional investment
managers make this disclosure because Section 14A Votes relate
exclusively to matters proposed by issuers and not by security holders.
---------------------------------------------------------------------------
\77\ See proposed Item 1(f) of Form N-PX; cf. current Item 1(f)
of Form N-PX (requirement currently applicable to funds).
---------------------------------------------------------------------------
We are proposing to amend Form N-PX to provide information about
the number of shares voted which will, among other things, accommodate
different votes on the same matter by the same reporting person.\78\
This could occur, for example, when an institutional investment manager
votes for a matter, on behalf of one client, and against the same
matter, on behalf of a different client. We are concerned that, if we
do not make specific provision for this situation, the information
filed on Form N-PX could, in a number of cases, be rendered largely
meaningless because it would indicate that a manager voted in multiple
ways without providing any measure of the magnitude of the different
votes.
---------------------------------------------------------------------------
\78\ See Concept Release, supra note 76, 75 FR at 42994-95
(requesting comment on amending Form N-PX to require funds to
disclose the actual number of shares voted).
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[[Page 66629]]
For that reason, we are proposing to require disclosure of (1) The
number of shares the reporting person was entitled to vote (for funds)
or had or shared voting power over (for institutional investment
managers); \79\ (2) the number of those shares that were voted; \80\
and (3) how the reporting person voted those shares (e.g., for or
against proposal, or abstain; for or withhold regarding election of
directors) and, if the votes were cast in multiple manners (e.g., for
and against), the number of shares voted in each manner.\81\ Because
these disclosures will make it clear whether the reporting person cast
a vote on the matter, we are also proposing to amend Form N-PX to
remove the related disclosure requirement currently found in Item
1(g).\82\ In disclosing the number of shares over which an
institutional investment manager had or shared voting power, the
manager would be required to report the number of shares over which it
had sole voting power separately from the number of shares over which
it had shared voting power. The manager would also be required to
separately report shares when the groups of institutional investment
managers who share voting power are different.\83\
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\79\ Proposed Item 1(g) of Form N-PX.
\80\ Proposed Item 1(h) of Form N-PX.
\81\ Proposed Item 1(i) of Form N-PX. In the case of a
shareholder vote on the frequency of executive compensation votes, a
reporting person would be required to disclose the number of shares,
if any, voted in favor of each of 1-year frequency, 2-year
frequency, or 3-year frequency, and the number of shares, if any,
that abstained.
\82\ See current Item 1(g) of Form N-PX (requiring disclosure of
whether the fund cast its vote on a matter).
\83\ See proposed Special Instruction D.4 to Form N-PX. For
example, if the reporting institutional investment manager shares
voting power with respect to 10,000 shares with Manager A and shares
voting power with respect to 50,000 shares with Managers A and B,
then the groups of 10,000 and 50,000 shares would be required to be
separately reported. Similarly, a fund would be required to
separately report shares with respect to which different
institutional investment managers or groups of institutional
investment managers have or share voting power.
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We are proposing to extend the disclosures relating to the number
of shares the reporting person was entitled to vote and the number of
those shares that were voted in each manner to funds. In the case of
Section 14A Votes, we believe these disclosures by funds are necessary
to achieve consistent reporting with respect to institutional
investment manager votes because a portion of the votes of those
managers may be reported on Form N-PX reports filed by funds under the
provisions to prevent duplicative reporting.\84\ Therefore, unless we
require funds to report this information, the record of institutional
investment managers will be incomplete. In addition, information about
the magnitude of a fund's voting power and the number of votes cast
contribute to the transparency of proxy voting. For that reason, we are
also proposing to extend the new requirements to the complete proxy
voting records of funds. This is intended to improve transparency of
fund proxy voting records and enable fund shareholders to better
monitor their funds' involvement in the governance activities of
portfolio companies.\85\
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\84\ See discussion supra Part II.D.
\85\ See Form N-PX Adopting Release, supra note 27, at 6580
(noting Commission's belief ``that requiring funds to disclose their
complete proxy voting records will benefit investors by improving
transparency and enabling fund shareholders to monitor their funds'
involvement in the governance activities of portfolio companies'').
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As described above, in order to prevent duplicative reporting, the
Section 14A Votes of an institutional investment manager may, in some
cases, be reported on the Form N-PX report of another institutional
investment manager or a fund.\86\ In order to ensure that the
particular votes with respect to which each institutional investment
manager had or shared voting power may be identified, we are proposing
to require that the reporting person identify each institutional
investment manager on whose behalf the Form N-PX report is filed and
who had or shared the power to vote, or to direct the voting of, the
securities voted. A manager would be identified by entering the number
assigned to the manager in the Form N-PX Summary Page.\87\
---------------------------------------------------------------------------
\86\ See discussion supra Part II.D.
\87\ See proposed Item 1(k) of Form N-PX. Form 13F includes a
similar requirement. See Special Instruction 12.b.vii to Form 13F
(identification of managers with shared investment discretion).
---------------------------------------------------------------------------
In addition, we are proposing to require that, in the case of
Section 14A Votes, standardized descriptions be used to provide the
required brief identification of the matter voted on.\88\ This
standardization is intended to facilitate the ability of users to
compare proxy voting records among reporting persons and would be
required of funds as well as institutional investment managers. We are
proposing standardization of descriptions with respect to Section 14A
Votes because they can be readily identified in three different
categories, because these votes were selected by Congress for special
disclosure in Section 951 of the Dodd-Frank Act, and because uniform
identification may make it easier to find these votes within the
complete proxy voting records filed by funds. Under our proposal, votes
pursuant to Section 14A(a)(1) of the Exchange Act would be identified
as ``14A Executive Compensation,'' votes pursuant to Section 14A(a)(2)
of the Exchange Act would be identified as ``14A Executive Compensation
Vote Frequency,'' and votes pursuant to Section 14A(b) of the Exchange
Act would be identified as ``14A Extraordinary Transaction Executive
Compensation.'' \89\
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\88\ Proposed Item 1(e) of Form N-PX; proposed Special
Instruction D.3 to Form N-PX.
\89\ See proposed Special Instruction D.3 to Form N-PX.
---------------------------------------------------------------------------
Finally, we are proposing a technical amendment to Form N-PX that
would require reporting persons to disclose whether each reported vote
was ``for or against management's recommendation.'' \90\ Currently,
Form N-PX requires funds to disclose whether the vote was ``for or
against management.'' \91\ This amendment is intended to clarify that
the report is required to disclose how the vote was cast in relation to
management's recommendation, as opposed to how the vote may have
affected management.
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\90\ Proposed Item 1(j) of Form N-PX. Management's
recommendation would include any recommendation from a company's
board of directors or any board committee (e.g., audit committee or
compensation committee).
\91\ Current Item 1(i) of Form N-PX.
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We request comment on the information that we propose to require be
disclosed in Form N-PX reports, and, in particular, on the following
issues:
We are proposing to require the disclosure of
substantially the same information under amended Form N-PX that we
currently require funds to disclose on Form N-PX. Should we modify the
proposed content requirements in any way for either institutional
investment managers or funds? Is there any information that we propose
to require that should not be required? Is there additional information
that should be required?
Should we, as proposed, require the information in Form N-
PX reports to be disclosed in a standardized order? Would this
facilitate comparisons or be otherwise useful to users of this
information? What costs, if any, would be associated with
standardization? Should the requirement to standardize apply to
institutional investment managers, funds, or both? If we standardize
the order of the information in Form N-PX reports, should we use the
order set forth in our proposal, or would some other order of
information be more appropriate?
Are there methods other than standardizing the order of
information that would render the information reported on Form N-PX
more useful? Should we require reporting persons to
[[Page 66630]]
provide the information reported on Form N-PX in interactive data
format? Is it feasible for reporting persons to tag Form N-PX in a
manner that provides for uniform identification of each matter voted
(e.g., for every reporting person to assign the same tag to a
particular matter) if issuers of securities do not themselves create
these tags by tagging their proxy statements? What alternatives exist,
other than having issuers of portfolio securities tag their proxy
statements and assign tags to each matter on their proxy statements,
that could result in uniform tags being assigned by all reporting
persons on Form N-PX to each matter? What, if any, costs would be
associated with these alternative methods?
Should we amend Form N-PX, as proposed, to require
disclosure of the number of shares the reporting person was entitled to
vote or had voting power over, the number of shares voted, and the
number of shares voted in each manner? Is this quantitative information
necessary to make the reports of institutional investment managers
meaningful? Would this quantitative information make the reports of
funds more useful than they are today? Should these requirements apply
to both institutional investment managers and funds? For funds, should
they apply to all matters or only to Section 14A Votes? What, if any,
costs would be associated with disclosure of this quantitative
information?
Should we, as proposed, require a reporting person to
identify, for each vote reported, each institutional investment manager
who had or shared voting power as to the securities voted? Or is it
sufficient to require a reporting person to disclose on the Summary
Page the institutional investment managers for whom it is reporting,
without identifying, for each vote reported, the institutional
investment managers who have or share voting power? If we require
identification of the institutional investment managers that have or
share voting power for each vote reported, should we use the sequential
numbering system that we have proposed for the Summary Page, or should
we instead use the managers' Form 13F file numbers, i.e., the numbers
beginning ``28-?''
Should we, as proposed, require standardized descriptions
to be used to identify Section 14A Votes? Is the proposed
standardization likely to be useful to users of the information? Should
we modify the proposed descriptions in any way? What would be the
benefits and costs of requiring this standardization? What are the
benefits of standardizing descriptions only with respect to Section 14A
Votes while not standardizing descriptions with respect to other
matters? Are there alternative methods for achieving any benefits that
would accrue from such standardization, e.g., by requiring standardized
computer tags to be used to identify various types of proxy vote
matters? What would be the costs associated with these alternatives?
F. Requests for Confidential Treatment
The Commission intends to make the information filed on Form N-PX
publicly available through the Commission's Electronic Data Gathering,
Analysis, and Retrieval (``EDGAR'') system.\92\ Pursuant to rule 24b-2
under the Exchange Act,\93\ which governs requests for confidential
treatment of information required to be filed under the Act, an
institutional investment manager could request confidential treatment
of information reported on Form N-PX.\94\ Generally, it does not appear
that confidential treatment would be appropriate in order to prevent
proxy voting information from being made public. It appears that
confidential treatment could be appropriate, if at all, only in
narrowly circumscribed circumstances where an institutional investment
manager has filed a confidential treatment request for information
reported on Form 13F that is pending or has been granted and where
confidential treatment of information filed on Form N-PX would be
appropriate in order to protect information that is the subject of the
Form 13F confidential treatment request.\95\
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\92\ See proposed Paperwork Reduction Act Information in Form N-
PX (explaining that the Commission will make information filed on
Form N-PX public); see also rule 80(c)(3) promulgated under the
Freedom of Information Act [17 CFR 200.80(c)(3)] (stating that
filings made through the EDGAR system are publicly available on the
Commission's Web site).
\93\ 17 CFR 240.24b-2.
\94\ See proposed Confidential Treatment Instruction 1 to Form
N-PX.
\95\ Section 13(f)(3) of the Exchange Act provides that the
Commission, as it determines to be necessary or appropriate in the
public interest or for the protection of investors, may delay or
prevent public disclosure of information filed on Form 13F in
accordance with the Freedom of Information Act. Section 13(f)(3)
also provides that any information filed on Form 13F that identifies
the securities held by the account of a natural person or an estate
or trust (other than a business trust or investment company) shall
not be disclosed to the public.
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We are proposing to include instructions in Form N-PX that
prescribe the specific procedures to be used in requesting confidential
treatment of information filed on Form N-PX, the required content of a
confidential treatment request, and the required filing of information
that is no longer entitled to confidential treatment.\96\ These
instructions are based on the Form 13F confidential treatment
instructions, which apply in similar circumstances.\97\ We note that
current Form N-PX does not include any confidential treatment
instructions. Currently, there is transparency of fund portfolio
holdings information apart from Form N-PX,\98\ and, as a result, we are
not aware of any situation in which confidential treatment would be
appropriate for information filed by funds on Form N-PX.
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\96\ See proposed Confidential Treatment Instructions to Form N-
PX.
\97\ See Form 13F Instructions for Confidential Treatment
Requests.
\98\ Portfolio holdings information is required to be disclosed
by funds on a quarterly basis with a 60-day lag, through semi-annual
shareholder reports pursuant to rule 30e-1 under the Investment
Company Act [17 CFR 270.30e-1] and Form N-Q.
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We request comment on the confidential treatment provisions of the
proposed amendments to Form N-PX and, in particular, on the following
issues:
In what, if any, circumstances would it be appropriate for
the Commission to grant confidential treatment to information filed on
Form N-PX by institutional investment managers? Should Form N-PX or
rules of the Commission identify certain circumstances in which
confidential treatment may be appropriate?
Are the proposed instructions to Form N-PX that prescribe
the specific procedures to be used by institutional investment managers
that are requesting confidential treatment, the required content of a
confidential treatment request, and the required filing of information
that is no longer entitled to confidential treatment appropriate?
Should these instructions be modified in any way to address any aspect
of confidential treatment requests?
G. Technical and Conforming Amendments
We are proposing two technical and conforming amendments. We are
proposing to amend the heading of Subpart D of Part 249 of the Code of
Federal Regulations to include new Section 14A of the Exchange Act and
to indicate that Exchange Act reports are filed by both issuers and
other persons (e.g., institutional investment managers). We are also
proposing amendments to reflect the fact that Form N-PX will be an
Exchange Act form, as well as an Investment Company Act form.\99\
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\99\ Proposed rule 30b1-4; proposed 17 CFR 249.326 and 274.129.
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[[Page 66631]]
H. Compliance Dates
If the proposed amendments are adopted, the Commission expects to
require institutional investment managers to file their first reports
on Form N-PX covering Section 14A Votes at meetings that occur on or
after January 21, 2011 (the first date on which the voting requirements
of Section 14A apply to shareholder meetings), and ending on June 30,
2011. The reports would be required to be filed not later than August
31, 2011. We also expect to require that funds comply with the
amendments to Form N-PX in their reports filed for the period July 1,
2010, through June 30, 2011, which are required to be filed not later
than August 31, 2011, except that, for votes at meetings that occur
before January 21, 2011, funds would be permitted to include the
information currently required by Form N-PX in the format currently
required by Form N-PX. The compliance dates are intended to provide a
uniform mechanism of reporting votes at meetings that occur on or after
January 21, 2011, because funds will be permitted to report Section 14A
Votes for institutional investment managers. However, in order to
reduce the burden of compliance, funds would not be required to report
pre-January 21, 2011 votes using the new requirements.
We request comment on the proposed compliance dates and, in
particular, on the following issues:
Would the proposed compliance dates provide adequate lead
time for institutional investment managers that would be required to
file Form N-PX for the first time? Would the proposed compliance dates
provide adequate lead time for funds that would be required to comply
with the amendments to Form N-PX? What, if any, implementation issues
would be raised for institutional investment managers, funds, and their
service providers in complying with the proposals?
How should we address any implementation issues? Should
we, for example, permit delayed filing (e.g., to September 30, October
31, November 30, or December 31, 2011) of Form N-PX for institutional
investment managers, funds, or both for the period ended June 30, 2011,
in order to provide more time to prepare the initial filings on revised
Form N-PX? As another alternative, should we not require institutional
investment managers to report Section 14A Votes that occur before July
1, 2011, on Form N-PX, with the result that institutional investment
managers would file their first report on Form N-PX not later than
August 31, 2012, for the period July 1, 2011, through June 30, 2012? If
so, should we require institutional investment managers to report their
Section 14A Votes that occur from January 21, 2011, through June 30,
2011, in some other manner, such as on their Web sites? For what
period, if any, should we delay required compliance by funds with the
revised Form N-PX requirements?
III. General Request for Comments
The Commission requests comment on the amendments proposed in this
release, whether any further changes to our rules or forms are
necessary or appropriate to implement the objectives of our proposed
amendments, and on other matters that might affect the proposals
contained in this release.
IV. Paperwork Reduction Act
Certain provisions of our proposal contain ``collection of
information'' requirements within the meaning of the Paperwork
Reduction Act of 1995 (``PRA'').\100\ We are submitting the proposed
collections of information to the Office of Management and Budget
(``OMB'') for review in accordance with the PRA.\101\ The title for the
existing collection of information is: ``Form N-PX--Annual Report of
Proxy Voting Record of Registered Management Investment Companies.''
\102\ An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number.
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\100\ 44 U.S.C. 3501 et seq.
\101\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
\102\ We intend to rename the title for the collection of
information relating to Form N-PX as ``Form N-PX--Annual Report of
Proxy Voting Record.''
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Section 14A(d) of the Exchange Act requires that every
institutional investment manager subject to Section 13(f) of the
Exchange Act report at least annually how it voted on the executive
compensation-related shareholder votes required by Sections 14A(a) and
(b) (the ``Section 14A Votes''), unless such vote is otherwise required
to be reported publicly by rule or regulation of the Commission. To
implement Section 14A(d), we are proposing new rule 14Ad-1 under the
Exchange Act, which, if adopted, would require institutional investment
managers that are required to file reports under Section 13(f) of the
Exchange Act to file their record of Section 14A Votes with the
Commission annually on Form N-PX. We are also proposing to amend Form
N-PX (OMB Control No. 3235-0582), which was adopted pursuant to Section
30 of the Investment Company Act \103\ and is currently used by funds
to file their complete proxy voting records with the Commission, to
accommodate the new filings by institutional investment managers.
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\103\ 15 U.S.C. 80a-29.
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Form N-PX, including the proposed amendments, contains collection
of information requirements. Form N-PX is currently used by funds to
file their complete proxy voting records with the Commission.
Compliance with the disclosure requirements of the form is mandatory.
Responses to the disclosure requirements would not be kept confidential
unless granted confidential treatment.
The proposed amendments to Form N-PX would accommodate reporting of
Section 14A Votes by institutional investment managers. The amended
form, as proposed, would consist of three parts: An amended Cover Page,
a new Summary Page, and proxy voting information. Under the proposed
amendments, funds and institutional investment managers would be
required to disclose the following proxy voting information: (a) The
name of the issuer of the security; (b) the exchange ticker symbol of
the security; (c) the CUSIP number for the security; (d) the
shareholder meeting date; (e) a brief identification of the matter
voted on; (f) for reports filed by funds, whether the matter was
proposed by the issuer or by a security holder; (g) the number of
shares the reporting person was entitled to vote (for funds) or had or
shared voting power over (for institutional investment managers); (h)
the number of shares that were voted; (i) how the reporting person
voted those shares (e.g., for or against proposal, or abstain; for or
withhold regarding election of directors) and, if the votes are cast in
multiple manners (e.g., for and against), the number of shares voted in
each manner; (j) whether the vote was for or against management's
recommendation; and (k) an identification of each institutional
investment manager on whose behalf the Form N-PX report is filed (other
than the reporting person) and who had or shared voting power as to the
securities voted.
The Commission estimates that there are approximately 2,800 funds
registered with the Commission, representing approximately 10,100 fund
portfolios that are required to file Form N-PX reports. The 10,100
portfolios are comprised of approximately 6,200 portfolios holding
equity securities and 3,900 portfolios holding no equity
[[Page 66632]]
securities.\104\ The current PRA burden associated with Form N-PX is
estimated to be 14.4 hours per response for portfolios holding equity
securities and 0.17 hours (10 minutes) per response for portfolios
holding no equity securities, for a total annual hour burden of
approximately 89,900 hours when calculated using the current number of
portfolios.\105\ There are currently no external costs associated with
Form N-PX for purposes of the PRA.
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\104\ The estimate of 2,800 funds is based on the number of
management investment companies currently registered with the
Commission. The Commission staff estimates that there are
approximately 5,700 portfolios that invest primarily in equity
securities, 500 ``hybrid'' or bond portfolios that may hold some
equity securities, 3,200 bond portfolios that hold no equity
securities, and 700 money market fund portfolios, for a total of
10,100 portfolios required to file Form N-PX reports. The staff has
based its portfolio estimates on a number of publications. See
Investment Company Institute, Trends in Mutual Fund Investing (June
2010); Investment Company Institute, Closed-End Fund Assets (Second
Quarter 2010); Investment Company Institute, Exchange Traded Fund
Assets (June 2010); Investment Company Institute, Supplemental
Trends Tables (June 2010).
\105\ (6,200 portfolios that hold equity securities x 14.4 hours
per year) + (3,900 portfolios holding no equity securities x 0.17
hours per year) = 89,943 hours. See also 74 FR 475 (Jan. 6, 2009)
(most recent submission to OMB to request extension of the
previously approved collection of information for Form N-PX).
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We are proposing to revise our current PRA estimates of the burden
to funds of complying with Form N-PX. It is our understanding that most
funds hire third-party service providers, such as proxy advisory firms,
to assist with the administrative tasks associated with voting,
recording voting decisions, and preparing the reports to be filed on
Form N-PX. As a result, we are proposing to reduce our estimate of the
current PRA burden of Form N-PX for portfolios holding equity
securities from 14.4 hours to 7.2 hours \106\ and add external costs of
$1,000 per portfolio paid to third-party service providers.\107\ We
propose no changes to our current estimate for portfolios holding no
equity securities because they generally have no proxy votes to report
and therefore do not require third-party service providers to assist
with proxy voting and preparing reports on Form N-PX. The revised
aggregate annual PRA burden is approximately 45,300 internal hours
\108\ and $6.2 million in external costs.\109\ We request comment on
any aspect of the proposed revised PRA burden to funds of complying
with Form N-PX.
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\106\ When we adopted Form N-PX in 2003, we estimated a PRA
burden of 14.4 hours and no external costs. Form N-PX Adopting
Release, supra note 27, at 6573-74. We also estimated that attorneys
and programmers would divide time equally on compliance with the
proxy voting disclosure requirements. Id. at 6576 n.77. Our revised
estimate removes the estimated hours allocated to programmers
because we believe that this burden is now generally borne through
external costs charged by third-party service providers.
\107\ This estimate is based on the Commission staff's
consultations with third-party service providers that assist funds
with the administrative tasks associated with voting, recording
voting decisions, and preparing reports to be filed on Form N-PX.
\108\ (6,200 portfolios holding equity securities x 7.2 hours
per year) + (3,900 portfolios holding no equity securities x 0.17
hours per year) = 45,303 hours.
\109\ (6,200 portfolios holding equity securities x $1,000 per
year) + (3,900 portfolios holding no equity securities x $0 per
year) = $6,200,000.
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We are also proposing to revise our estimates of the PRA burden
associated with Form N-PX to reflect our proposed amendments to Form N-
PX. For funds, the Commission estimates that compliance attorneys would
spend an average of 1.5 hours per portfolio holding equity securities
\110\ and funds would incur no external costs \111\ to comply with the
proposed amendments to Form N-PX, which would include preparation of
the amended Cover Page and the new Summary Page, disclosure of the
proposed additional proxy voting information relating to the number of
shares the fund was entitled to vote and the number of shares that were
voted, the identification of each institutional investment manager on
whose behalf the Form N-PX report is filed, and compliance with the
requirements that information appear in a standardized order and use
standardized descriptions for Section 14A Votes. We further estimate
that the proposed amendments would not increase the hour burden for
funds holding no equity securities because their reporting requirements
would remain substantially the same. Therefore, we estimate that the
proposed amendments would increase the total annual PRA burden for
funds to comply with Form N-PX by approximately 9,300 hours \112\ and
would not increase or decrease external costs.
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\110\ We estimate that the revised current PRA burden of Form N-
PX is 7.2 hours. For our proposed changes, we estimate an additional
1.5 hours based on the scope of the proposed additional disclosures
in Form N-PX as compared to the current disclosures in Form N-PX.
\111\ Based on Commission staff consultations with third-party
service providers, we believe that the external costs of the
proposed amendments will be included in the current fees already
charged by the service providers for Form N-PX compliance.
\112\ 6,200 portfolios holding equity securities x 1.5 hours per
year = 9,300 hours per year.
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The Commission estimates that there are approximately 4,000
institutional investment managers that are required to file reports
under Section 13(f) of the Exchange Act that would be required under
the proposed amendments to file their record of Section 14A Votes with
the Commission annually on Form N-PX.\113\ We also estimate that
approximately 200 amendments to Form N-PX reports will be filed
annually by institutional investment managers as a result of the final
adverse disposition of a request for confidential treatment or upon
expiration of previously granted confidential treatment.\114\ We
further estimate that for each institutional investment manager
required to file its record of Section 14A Votes on Form N-PX,
compliance attorneys would spend an average of 8.7 hours per year to
review filings on Form N-PX made under the proposal,\115\ and 1 hour
per amendment to review confidential treatment-related amendments to
filings on Form N-PX under the proposal.\116\ We also estimate that the
proposed
[[Page 66633]]
amendments would result in certain external costs for institutional
investment managers to generate and maintain the information disclosed
in Form N-PX reports, which we estimate to be $1,000 per year.\117\ We
estimate that the proposed amendments would result in a total annual
PRA burden for institutional investment managers to comply with Form N-
PX of approximately 35,000 hours \118\ and $4 million in external
costs.\119\
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\113\ Based on Commission staff analysis of Form 13F reports
filed with the Commission.
\114\ See proposed Confidential Treatment Instructions 6 and 7
to Form N-PX. Our estimate is based on the number of Form 13F
amendments received by the Commission during the year ended June 30,
2010, divided by four. We have assumed there will be fewer
amendments for Form N-PX because we believe that an annual filing
(as opposed to quarterly filings in the case of Form 13F) will
result in fewer confidential treatment requests for Form N-PX. For
purposes of this estimate, we are conservatively assuming that all
200 amendments filed are related to the adverse disposition of a
request for confidential treatment or the expiration of previously
granted confidential treatment, although some may be amendments
filed to correct errors or omissions in a previous filing. Like the
current PRA estimate for Form N-PX, our proposed estimate does not
allocate a separate burden to amendments that merely correct errors
or omissions in a separate filing. For that reason, and because we
do not expect funds to file confidential treatment-related
amendments, we are not including a burden estimate for amendments
filed by funds. See supra text accompanying note 98.
\115\ This estimate for institutional investment managers is the
same as the revised estimate for funds under the proposed amendments
(7.2 hours under the revised estimate + 1.5 hours under the proposed
amendments). In arriving at this estimate, we are taking a
conservative approach in assuming that institutional investment
managers will incur the same hourly burden for filing reports on
Form N-PX as funds, even though managers will only be required to
report Section 14A Votes whereas funds are required to file their
complete voting record. In addition, for purposes of this estimate,
we are assuming that every manager will file its full record of
Section 14A Votes on an institutional investment manager ``voting''
report, and not file an institutional investment manager ``notice''
or institutional investment manager ``combination'' report. The
``notice'' and ``combination'' reports would likely require a lesser
hourly burden than the ``voting'' report because, while the
``voting'' report requires a manager to report all of its Section
14A Votes, the ``notice'' and ``combination'' reports permit a
manager to reference another manager's report that includes all or
part of the first manager's Section 14A Votes.
\116\ We estimate that the burden for amendments to Form N-PX
reports will be the same as the current hour burden for amendments
to Form 13F reports, which is estimated to be 1 hour per amendment.
See 74 FR 28076 (June 12, 2009) (most recent submission to OMB to
request extension of the previously approved collection of
information for Form 13F).
\117\ The external cost estimate for institutional investment
managers is the same as our revised estimate for funds. Based on the
Commission staff's consultations with third-party service providers,
we believe that the external costs to institutional investment
managers under the proposed amendments would be approximately the
same as the external costs to funds.
\118\ (4,000 institutional investment managers making annual
filings x 8.7 hours per filing) + (200 amendments filed annually x 1
hour per amendment) = 35,000 hours per year.
\119\ 4,000 institutional investment managers x $1,000 per year
= $4,000,000 per year.
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We estimate that if the proposed amendments to Form N-PX are
adopted, the total annual PRA burden for all reporting persons (both
funds and institutional investment managers) to comply with the
requirements of Form N-PX would be approximately 89,600 hours \120\ and
approximately $10.2 million in external costs.\121\ We do not believe
that there will be any initial PRA burden that will be incurred beyond
the annual PRA burden.\122\ We further believe that many reporting
persons are already tracking the data required to be reported by our
proposal.\123\
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\120\ 45,303 hours under revised current burden for funds +
9,300 hours estimated to be incurred by funds under proposed
amendments + 35,000 hours estimated to be incurred by institutional
investment managers under proposed amendments = 89,603 hours.
\121\ $6,200,000 under revised current burden for funds +
$4,000,000 estimated to be incurred by institutional investment
managers under proposed amendments = $10,200,000.
\122\ Based on Commission staff consultations with funds and
third-party service providers.
\123\ Id. See also DOL Interpretive Bulletin, supra note 20
(noting the Department of Labor's view that an investment manager or
other ERISA plan fiduciary would be required to maintain accurate
records as to proxy voting decisions).
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Request for Comment
Pursuant to 44 U.S.C. 3506(c)(2)(B), we request comments to: (1)
Evaluate whether the proposed collection of information is necessary
for the proper performance of the functions of the agency, including
whether the information will have practical utility; (2) evaluate the
accuracy of the Commission's estimate of burden of the proposed
collections of information; (3) determine whether there are ways to
enhance the quality, utility, and clarity of the information to be
collected; and (4) evaluate whether there are ways to minimize the
burden of the collection of information on those who are to respond,
including through the use of automated collection techniques or other
forms of information technology. We request comment and supporting
empirical data on our burden and cost estimates for the proposed
amendments, including the external costs that reporting persons may
incur.
Persons wishing to submit comments on the collection of information
requirements of the proposed amendments should direct them to the
Office of Management and Budget, Attention Desk Officer for the
Securities and Exchange Commission, Office of Information and
Regulatory Affairs, Washington, DC 20503 and should send a copy to
Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100
F Street, NE., Washington, DC 20549-1090, with reference to File No.
S7-30-10. Requests for materials submitted to OMB by the Commission
with regard to these collections of information should be in writing,
refer to File No. S7-30-10, and be submitted to the Securities and
Exchange Commission, Office of Investor Education and Advocacy, 100 F
Street, NE., Washington, DC 20549-0213. OMB is required to make a
decision concerning the collections of information between 30 and 60
days after publication of this release. Consequently, a comment to OMB
is best assured of having its full effect if OMB receives it within 30
days after publication of this release.
V. Cost/Benefit Analysis
Section 14A(d) of the Exchange Act requires that every
institutional investment manager subject to Section 13(f) of the
Exchange Act report at least annually how it voted on Section 14A
Votes, unless such vote is otherwise required to be reported publicly
by rule or regulation of the Commission. To implement Section 14A(d),
the Commission is proposing new rule 14Ad-1 under the Exchange Act,
which, if adopted, would require institutional investment managers that
are required to file reports under Section 13(f) of the Exchange Act to
file their record of Section 14A Votes with the Commission annually on
Form N-PX. The Commission is also proposing to amend Form N-PX, which
is currently used by funds to file their complete proxy voting records
with the Commission, to accommodate the new filings by institutional
investment managers. The Commission is sensitive to the costs and
benefits imposed by its rules and has identified certain costs and
benefits of the proposed rule and form amendments, as described below.
A. Benefits
The proposed new rule and form amendments would make important
information about Section 14A Votes by institutional investment
managers publicly available. The information would include the number
of shares over which the manager had or shared voting power, the number
of shares voted, and how the shares were voted by the manager. For
funds, the proposed amendments to Form N-PX would require funds to
disclose enhanced information by presenting the information in a
standardized order and by disclosing the number of shares that the fund
was entitled to vote and the number of shares voted. We believe that
the information required to be provided by our proposal would increase
the transparency regarding Section 14A Votes by institutional
investment managers and funds.
The proposed new rule and amendments to Form N-PX may benefit the
securities markets by providing access to information about how
institutional investment managers exercise proxies with respect to
Section 14A Votes. We note that institutional investment managers that
file reports on Form 13F exercised investment discretion over
approximately $11.1 trillion in Section 13(f) equity securities as of
December 31, 2009.\124\ In many cases, the institutional investment
managers also have or share the power to vote proxies relating to these
equity securities. This voting power gives institutional investment
managers significant ability collectively, and in some cases
individually, to affect the outcome of shareholder votes and influence
the governance of corporations. Institutional investment managers are
thus in a position to significantly affect the future of corporations
and, as a result, the future value of corporate securities.
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\124\ Based on information obtained from the Thomson Reuters
Institutional (13F) Holdings database.
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The proposed amendments to Form N-PX would require both
institutional investment managers and funds to disclose information in
a standardized order. This change is likely to benefit investors and
other market participants and users of the information by facilitating
comparisons of voting records among reporting persons. We are also
proposing to require that, in the case of Section 14A Votes,
standardized descriptions be used to provide the
[[Page 66634]]
required brief identification of the matter voted on. This
standardization is intended to facilitate the ability of users to
compare proxy voting records among reporting persons. We believe that
fund investors may benefit because uniform identification should make
it easier to find the Section 14A Votes within the complete proxy
voting records filed by funds.
We are proposing amendments to Form N-PX to require disclosure of
(1) the number of shares the reporting person was entitled to vote (for
funds) or had or shared voting power over (for institutional investment
managers); (2) the number of those shares that were voted; and (3) how
the reporting person voted those shares and, if the votes were cast in
multiple manners (e.g., for and against), the number of shares voted in
each manner. The proposed amendments to Form N-PX provide more detailed
information as compared to the current form. The additional information
is necessary to accommodate the possibility of different votes on the
same matter by a reporting person. This information would be required
of funds, as well as institutional investment managers, and we believe
that the additional information may benefit fund investors by helping
them to understand a fund's proxy voting record.
B. Costs
The new rule and form amendments would lead to some additional
costs for institutional investment managers and funds and fund
investors. The resulting costs may include both internal costs (for
compliance attorneys to review the required disclosures) and external
costs (such as costs associated with third-party service providers to
collect and report the information disclosed in Form N-PX reports). If
an institutional investment manager has voting power with respect to a
client's securities, these costs may be passed on to the client.
First, if adopted, our proposals would impose costs on
institutional investment managers because they would implement the
disclosure requirements of Section 14A by requiring institutional
investment managers to file their record of Section 14A Votes with the
Commission annually on Form N-PX. Based on our PRA analysis, we
estimate that the costs for each institutional investment manager
attributable to the proposed new rule and form amendments would be
approximately $2,350 in internal costs for compliance attorneys per
annual filing,\125\ $270 in internal costs for compliance attorneys per
amendment,\126\ and $1,000 in external costs for third-party service
providers \127\ to prepare, review, and submit the required disclosure.
We estimate that the aggregate annual costs imposed by the proposed
rule and form amendments on institutional investment managers would be
approximately $13.5 million.\128\
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\125\ We estimate that compliance attorneys will spend 8.7 hours
to review annual filings on Form N-PX. See supra note 115 and
accompanying text. The hourly wage rate of $270 for a compliance
attorney is based on the salary information from the Securities
Industry and Financial Markets Association, Report on Management &
Professional Earnings in the Securities Industry 2009, modified to
account for an 1,800-hour work-year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits, and overhead.
Therefore, the internal costs associated with this burden equal
approximately $2,350 per institutional investment manager (8.7 hours
x $270 per hour = $2,349).
\126\ We estimate that compliance attorneys will spend 1 hour
per amendment to review amendments to filings on Form N-PX. See
supra note 116 and accompanying text. For hourly wage rate
information, see supra note 125. Therefore, the internal costs
associated with this burden equals approximately $270 per amendment
(1 hour x $270 per hour = $270).
\127\ See supra note 117 and accompanying text.
\128\ ($2,349 in internal costs per annual filing x 4,000
institutional investment managers) + ($270 in internal costs per
amendment x 200 amendments) + ($1,000 in external costs per
institutional investment manager x 4,000 investment managers) =
$13,450,000.
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Second, if adopted, our proposals would impose costs on funds
because the proposals would modify the format and content of the
information required by Form N-PX in the following ways: (1) The
information would be required to appear in a standardized order; (2)
information would be required about the number of shares the fund was
entitled to vote and the number of shares that were voted; (3) the
institutional investment managers who had or shared voting power for a
matter would be identified; and (4) standardized descriptions would be
required for Section 14A Votes. Based on our PRA analysis, we estimate
that the costs for each portfolio that holds equity securities
attributable to the proposed form amendments would be approximately
$400 per year in internal costs for compliance attorneys to review the
required disclosure.\129\ We estimate that the aggregate annual costs
imposed by the proposed form amendments on funds would be approximately
$2.5 million.\130\
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\129\ We estimate that compliance attorneys would spend an
additional 1.5 hours to review the materials. See supra note 110 and
accompanying text. For hourly wage rate information, see supra note
125. Therefore, the internal costs associated with this burden equal
approximately $400 per fund (1.5 hours x $270 per hour = $405). We
estimate that no additional external costs would result from the
proposal. See supra note 111.
\130\ 6,200 portfolios holding equity securities x $405 in
internal costs per year = $2,511,000.
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These proposals are intended to implement the disclosure required
by Section 14A(d) of the Exchange Act, which was added by Section 951
of the Dodd-Frank Act. In general, the costs and other economic effects
that result from requiring such disclosure are mandated under Section
14A(d). We believe that our proposal to use Form N-PX to implement the
congressionally mandated proxy vote reporting requirements would
mitigate the costs of compliance, because the existing form is
supported by a number of third-party service providers and is already
used by the many institutional investment managers who currently file
Form N-PX reports on behalf of funds. We further believe that many
reporting persons are already tracking the data required to be reported
by our proposal. Finally, the proposal would mitigate compliance costs
by including provisions intended to prevent duplicative reporting of
Section 14A Votes.
C. Request for Comments
We request comments on all aspects of this cost-benefit analysis,
including identification of any additional costs or benefits of, or
suggested alternatives to, the proposed amendments. Commenters are
requested to provide empirical data and other factual support for their
views to the extent possible.
VI. Consideration of Burden on Competition and Promotion of Efficiency,
Competition, and Capital Formation
Section 23(a)(2) of the Exchange Act requires the Commission, in
adopting rules under the Exchange Act, to consider the impact that any
new rule would have on competition and prohibits the Commission from
adopting any rule that would impose a burden on competition not
necessary or appropriate in furtherance of the purposes of the Exchange
Act.\131\ Further, Section 3(f) of the Exchange Act requires the
Commission, when engaging in rulemaking that requires it to consider or
determine whether an action is necessary or appropriate in the public
interest, to consider, in addition to the protection of investors,
whether the action will promote efficiency, competition, and capital
formation.\132\ Section 2(c) of the Investment Company Act requires the
Commission, when
[[Page 66635]]
engaging in rulemaking that requires it to consider or determine
whether an action is consistent with the public interest, to consider,
in addition to the protection of investors, whether the action will
promote efficiency, competition, and capital formation.\133\
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\131\ 15 U.S.C. 78w(a)(2).
\132\ 15 U.S.C. 78c(f).
\133\ 15 U.S.C. 80a-2(c).
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The proposed new rule and form amendments are intended to implement
the disclosure required by Section 14A(d) of the Exchange Act, which
was added by Section 951 of the Dodd-Frank Act. In general, the burden
on competition and effects on efficiency, competition, and capital
formation, if any, that result from requiring such disclosure are
mandated under Section 14A(d). We believe that our proposal to use Form
N-PX to implement the congressionally mandated proxy vote reporting
requirements would promote efficiency because the existing form is
supported by a number of third-party service providers and is already
used by the many institutional investment managers who currently file
Form N-PX reports on behalf of funds.
Because the proposed new rule 14Ad-1 and amendments to Form N-PX
apply equally to all institutional investment managers that are
required to file reports under Section 13(f) of the Exchange Act, we do
not anticipate that any competitive disadvantages would be created. To
the contrary, we anticipate that our proposed new rule and form
amendments may encourage competition by raising awareness about
institutional investment manager voting on Section 14A Votes and
facilitate differentiation among institutional investment managers.
Although we recognize that the proxy vote reporting requirements may
require institutional investment managers and funds to expend resources
that could be used for other purposes, we do not anticipate that the
proposed new rule and form amendments would impose an undue burden on
competition or efficiency because we believe that many reporting
persons are already tracking the data required to be reported by our
proposal. Our proposal implements the requirements of Section 14A(d) in
a manner that is intended to minimize the costs for reporting persons
and may have a positive effect on capital formation.
We request comment on whether the proposed rule and form
amendments, if adopted, would promote efficiency, competition, and
capital formation. We also request comment on whether the proposed rule
and form amendments would impose a burden on competition. Commenters
are requested to provide empirical data and other factual support for
their views if possible.
VII. Initial Regulatory Flexibility Analysis
This Initial Regulatory Flexibility Analysis has been prepared in
accordance with the Regulatory Flexibility Act.\134\ It relates to the
Commission's proposed new rule 14Ad-1 under the Exchange Act and
proposed amendments to Form N-PX under the Exchange Act and the
Investment Company Act.
---------------------------------------------------------------------------
\134\ 5 U.S.C. 603 et seq.
---------------------------------------------------------------------------
A. Reasons for, and Objectives of, Proposed New Rule and Proposed Form
Amendments
Section 14A(d) of the Exchange Act requires that every
institutional investment manager subject to Section 13(f) of the
Exchange Act report at least annually how it voted on Section 14A
Votes, unless such vote is otherwise required to be reported publicly
by rule or regulation of the Commission. To implement Section 14A(d),
the Commission is proposing new rule 14Ad-1 under the Exchange Act,
which, if adopted, would require institutional investment managers that
are required to file reports under Section 13(f) of the Exchange Act to
file their record of Section 14A Votes with the Commission annually on
Form N-PX. The Commission is also proposing to amend Form N-PX, which
is currently used by funds to file their complete proxy voting records
with the Commission, to accommodate the new filings by institutional
investment managers.
B. Legal Basis
The Commission is proposing new rule 14Ad-1 pursuant to the
authority set forth in Sections 13, 14A, 23(a), 24, and 36 of the
Exchange Act. The Commission is proposing amendments to Form N-PX
pursuant to the authority set forth in sections 13, 14A, 23(a), 24, and
36 of the Exchange Act and sections 8, 30, 31, 38, and 45 of the
Investment Company Act.
C. Small Entities Subject to the Rule
The Regulatory Flexibility Act defines ``small entity'' to mean
``small business,'' ``small organization,'' or ``small governmental
jurisdiction.'' \135\ The Commission's rules define ``small business''
and ``small organization'' for purposes of the Regulatory Flexibility
Act for each of the types of entities regulated by the Commission.
---------------------------------------------------------------------------
\135\ 5 U.S.C. 601(6).
---------------------------------------------------------------------------
The Commission's rules under the Exchange Act that define a ``small
business'' and ``small organization'' do not provide a definition
specifically covering institutional investment managers. The
Commission's rules do, however, provide definitions with respect to the
terms ``person'' and ``broker or dealer.'' Under our rules, ``small
business'' and ``small organization,'' when used with reference to (1)
a person other than an investment company, generally means a person
with total assets of $5 million or less on the last day of its most
recent fiscal year; and (2) a broker or dealer, generally means a
broker or dealer that has total capital of less than $500,000 on the
date in the prior fiscal year as of which its audited financial
statements were prepared and is not affiliated with any person that is
not a small business or small organization.\136\
---------------------------------------------------------------------------
\136\ 17 CFR 240.0-10.
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We believe that the categories ``person'' and ``broker or dealer''
are appropriate categories of entities for purposes of analyzing
whether the proposed rule and form amendments would have a significant
economic impact on a substantial number of small entities that are
institutional investment managers that are required to file reports
under Section 13(f). We believe that institutional investment managers
that invest in or buy and sell securities for their own account would
be covered under the ``person'' category. Institutional investment
managers that exercise investment discretion with respect to the
account of another person generally will be either a ``broker or
dealer'' or otherwise be in the ``person'' category. Therefore, we
believe that the affected managers would be covered under the
categories ``person'' or ``broker or dealer.''
With respect to institutional investment managers that invest in or
buy and sell securities for their own account, such managers are only
required to file reports under Section 13(f) if they hold at least $100
million in Section 13(f) securities as of the last trading day of any
calendar month during any year.\137\ Because of this threshold, these
institutional investment managers are unlikely to hold $5 million or
less in total assets at the end of their fiscal year. Therefore, we do
not believe that these types of institutional investment managers would
be small entities for purposes of the Regulatory Flexibility Act.
---------------------------------------------------------------------------
\137\ 17 CFR 240.13f-1.
---------------------------------------------------------------------------
For institutional investment managers that exercise investment
discretion with respect to accounts of other persons, we believe that
such managers generally will be either broker-dealers or other
[[Page 66636]]
persons. The Commission believes that it is unlikely that an
institutional investment manager that exercises investment discretion
over at least $100 million in Section 13(f) securities will hold $5
million or less in total assets, or have total capital of less than
$500,000 if it is a broker-dealer. Therefore, the Commission believes
that few, if any, of these types of institutional investment managers
would be considered small entities for purposes of the Regulatory
Flexibility Act.
The Commission's rules under the Investment Company Act define a
``small business'' or ``small organization'' for purposes of the
Regulatory Flexibility Act to mean an investment company that, together
with other investment companies in the same group of related investment
companies, has net assets of $50 million or less as of the end of its
most recent fiscal year.\138\ We estimate that approximately 154 funds
meet this definition. The proposed amendments to Form N-PX may affect
the 154 funds that may be considered small entities.
---------------------------------------------------------------------------
\138\ 17 CFR 270.0-10.
---------------------------------------------------------------------------
D. Reporting, Recordkeeping, and Other Compliance Requirements
We are proposing new rule 14Ad-1 under the Exchange Act, which, if
adopted, would require institutional investment managers that are
required to file reports under Section 13(f) of the Exchange Act to
file their record of how they voted on Section 14A Votes with the
Commission annually on Form N-PX. We are also proposing to amend Form
N-PX, which is currently used by funds to file their complete proxy
voting records with the Commission, to accommodate the new filings by
institutional investment managers.
Proposed new rule 14Ad-1, if adopted, would apply to institutional
investment managers required to file reports under Section 13(f) of the
Exchange Act. We are proposing to require an institutional investment
manager that is required to report on Form N-PX to include in the
report the manager's proxy voting record for each Section 14A Vote with
respect to which the manager, whether directly or indirectly, through
any contract, arrangement, understanding, relationship, or otherwise,
had or shared the power to vote, or to direct the voting of, any
security. We are also proposing to require institutional investment
managers to report their Section 14A Votes annually on Form N-PX not
later than August 31 of each year, for the most recent twelve-month
period ended June 30.
The proposed amendments to Form N-PX would apply to institutional
investment managers and funds, including those that are small entities.
We are proposing to include a new section on the Cover Page of Form N-
PX where the reporting person would provide information in cases where
the form is filed as an amendment to a previously filed Form N-PX
report. We are also proposing to require that the Cover Page include
information that would help users to identify whether the reporting
person is a fund or an institutional investment manager. We are
proposing to add a new Summary Page to Form N-PX, on which a reporting
person would be required to state the total number of institutional
investment managers, not counting the reporting person, whose Section
14A Votes are included in the report, and include a list of such
institutional investment managers, together with their respective Form
13F file numbers.
In addition, we are proposing to amend Form N-PX to require that
information be disclosed in a standardized order. Under the proposed
amendments, funds and institutional investment managers would be
required to disclose the following proxy voting information: (a) The
name of the issuer of the security; (b) the exchange ticker symbol of
the security; (c) the CUSIP number for the security; (d) the
shareholder meeting date; (e) a brief identification of the matter
voted on; (f) for reports filed by funds, whether the matter was
proposed by the issuer or by a security holder; (g) the number of
shares the reporting person was entitled to vote (for funds) or had or
shared voting power over (for institutional investment managers); (h)
the number of shares that were voted; (i) how the reporting person
voted those shares and, if the votes are cast in multiple manners, the
number of shares voted in each manner; (j) whether the vote was for or
against management's recommendation; and (k) an identification of each
institutional investment manager on whose behalf the Form N-PX report
is filed (other than the reporting person) and who had or shared voting
power as to the securities voted.
To prevent duplicative reporting, we are proposing amendments to
Form N-PX that would permit (1) a single institutional investment
manager to report Section 14A Votes in cases where multiple
institutional investment managers share voting power; and (2) an
institutional investment manager to satisfy its reporting obligations
by reference to the Form N-PX report of a fund that includes the
manager's Section 14A Votes.
Finally, we are proposing to require that, in the case of Section
14A Votes, standardized descriptions be used to provide the required
brief identification of the matter voted on. Under our proposal, votes
pursuant to Section 14A(a)(1) of the Exchange Act would be identified
as ``14A Executive Compensation,'' votes pursuant to Section 14A(a)(2)
of the Exchange Act would be identified as ``14A Executive Compensation
Vote Frequency,'' and votes pursuant to Section 14A(b) of the Exchange
Act would be identified as ``14A Extraordinary Transaction Executive
Compensation.''
For purposes of the cost/benefit analysis, we have estimated that
the aggregate annual costs imposed by the proposed rule and form
amendments on institutional investment managers would be approximately
$13.5 million.\139\ We have further estimated that the aggregate annual
costs imposed by the proposed form amendments on funds would be
approximately $2.5 million.\140\
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\139\ See supra note 128 and accompanying text.
\140\ See supra note 130 and accompanying text.
---------------------------------------------------------------------------
The Commission solicits comment on these estimates and the
anticipated effect the proposed amendments would have on small entities
subject to the rule.
E. Duplicative, Overlapping, or Conflicting Federal Rules
The Commission believes that there are no rules that duplicate,
overlap, or conflict with the proposed rule and rule and form
amendments.
F. Significant Alternatives
The Regulatory Flexibility Act directs us to consider significant
alternatives that would accomplish our stated objective, while
minimizing any significant adverse impact on small issuers. In
connection with the proposed amendments, the Commission considered the
following alternatives: (i) The establishment of differing compliance
or reporting requirements or timetables that take into account the
resources available to small entities; (ii) the clarification,
consolidation, or simplification of compliance and reporting
requirements under the proposed amendments for small entities; (iii)
the use of performance rather than design standards; and (iv) an
exemption from coverage of the proposed amendments, or any part
thereof, for small entities.
The Commission believes that, at the present time, special
compliance or
[[Page 66637]]
reporting requirements for small entities, or an exemption from
coverage for small entities, would not be appropriate or consistent
with investor protection. Proposed new rule 14Ad-1 and amendments to
Form N-PX, if adopted, would apply to institutional investment managers
that are required to file reports under Section 13(f) of the Exchange
Act. Our proposal is intended to implement the disclosure required by
Section 14A(d) of the Exchange Act, which was added by Section 951 of
the Dodd-Frank Act. In light of the congressional mandate, we believe
it is important for the disclosure to apply to all institutional
investment managers that are required to file reports under Section
13(f) of the Exchange Act, regardless of their size.
The proposed amendments to Form N-PX would also apply to funds. In
the case of Section 14A Votes, we believe this is necessary to achieve
consistent reporting with respect to institutional investment manager
votes because a portion of the votes of those managers will be reported
on Form N-PX reports filed by funds under the provisions to prevent
duplicative reporting. Therefore, unless we require funds to report
this information, the record of institutional investment managers will
be incomplete. In addition, information about the magnitude of a
reporting person's voting power and the number of votes cast
contributes to the transparency of proxy voting. For that reason, we
are also proposing to extend the new requirements to the complete proxy
voting records of funds. This is intended to improve transparency of
fund proxy voting records and enable fund shareholders to better
monitor their funds' involvement in the governance activities of
portfolio companies. Therefore, we believe it is important for the
proposed amendments to apply to all funds, regardless of size.
We have endeavored through the proposed amendments to Form N-PX to
minimize the regulatory burden on institutional investment managers and
funds, including small entities, while meeting our regulatory
objectives. Form N-PX is supported by a number of third-party service
providers and is already used by the many institutional investment
managers who currently file Form N-PX reports on behalf of funds. We
have endeavored to clarify, consolidate, and simplify the requirements
applicable to institutional investment managers and funds, including
those that are small entities. Finally, we do not consider the use of
performance rather than design standards to be consistent with the
congressional mandate in the Dodd-Frank Act.
G. Request for Comment
The Commission encourages the submission of written comments with
respect to any aspect of this analysis. Comment is specifically
requested on the number of small entities that would be subject to the
proposed rule and form amendments and the likely impact of the proposal
on those small entities. Commenters are asked to describe the nature of
any impact and provide empirical data supporting the extent of the
impact. These comments will be considered in the preparation of the
Final Regulatory Flexibility Analysis if the proposed amendments are
adopted and will be placed in the same public file as comments on the
proposed amendments themselves.
VIII. Consideration of Impact on the Economy
For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996 (``SBREFA''),\141\ a rule is ``major'' if it results or is
likely to result in:
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\141\ Public Law 104-21, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------
An annual effect on the economy of $100 million or more;
A major increase in costs or prices for consumers or
individual industries; or
Significant adverse effects on competition, investment, or
innovation.
We request comment on whether our proposal would be a ``major
rule'' for purposes of SBREFA. We solicit comment and empirical data
on:
The potential effect on the U.S. economy on an annual
basis;
Any potential increase in costs or prices for consumers or
individual industries; and
Any potential effect on competition, investment, or
innovation.
IX. Statutory Authority
The Commission is proposing new rule 14Ad-1 pursuant to the
authority set forth in Sections 13, 23(a), 24, and 36 of the Exchange
Act [15 U.S.C. 78m, 78w(a), 78x, and 78mm] and Section 951(d) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act. The
Commission is proposing amendments to rule 30b1-4 pursuant to the
authority set forth in Section 951(d) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act and Sections 8, 30, 31, 38, and 45
of the Investment Company Act [15 U.S.C. 80a-8, 80a-29, 80a-30, 80a-37,
and 80a-44]. The Commission is proposing amendments to Form N-PX
pursuant to the authority set forth in Sections 13, 23(a), 24, and 36
of the Exchange Act [15 U.S.C. 78m, 78w(a), 78x, and 78mm]; Section
951(d) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act; and Sections 8, 30, 31, 38, and 45 of the Investment Company Act
[15 U.S.C. 80a-8, 80a-29, 80a-30, 80a-37, and 80a-44].
List of Subjects
17 CFR Parts 240 and 249
Reporting and recordkeeping requirements, Securities.
17 CFR Parts 270 and 274
Investment companies, Reporting and recordkeeping requirements,
Securities.
Text of Proposed Rule and Form Amendments
For the reasons set out in the preamble, the Commission proposes to
amend Title 17, Chapter II, of the Code of Federal Regulations as
follows:
PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934
1. The authority citation for part 240 is amended by adding the
following citation in numerical order to read as follows:
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i,
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5,
78w, 78x, 78ll, 78mm, 80a- 20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4,
80b-11, and 7201 et seq.; and 18 U.S.C. 1350 and 12 U.S.C.
5221(e)(3) unless otherwise noted.
* * * * *
Section 240.14Ad-1 is also issued under sec. 951(d), Pub. L. 111-
203, 124 Stat. 1376.
* * * * *
2. Section 240.14Ad-1 is added to read as follows:
Sec. 240.14Ad-1 Report of proxy voting record.
(a) Subject to paragraphs (b) and (c) of this section, every
institutional investment manager (as that term is defined in section
13(f)(6)(A) of the Act (15 U.S.C. 78m(f)(6)(A))) that is required to
file reports under section 13(f) of the Act (15 U.S.C. 78m(f)) shall
file an annual report on Form N-PX (Sec. Sec. 249.326 and 274.129 of
this chapter) not later than August 31 of each year, for the most
recent twelve-month period ended June 30, containing the institutional
investment manager's proxy voting record for each shareholder vote
pursuant to sections 14A(a) and (b) of the Act (15 U.S.C.
[[Page 66638]]
78n-1(a) and (b)) with respect to which the manager, whether directly
or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise, had or shared the power to vote, or to
direct the voting of, any security.
(b) An institutional investment manager is not required to file a
report on Form N-PX (Sec. Sec. 249.326 and 274.129 of this chapter)
for the twelve-month period ending June 30 of the calendar year in
which the manager's initial filing on Form 13F (Sec. 249.325 of this
chapter) is due pursuant to Sec. 240.13f-1 of this part. For purposes
of this paragraph, ``initial filing'' on Form 13F means any quarterly
filing on Form 13F if no filing on Form 13F was required for the
immediately preceding calendar quarter.
(c) An institutional investment manager is not required to file a
report on Form N-PX (Sec. Sec. 249.326 and 274.129 of this chapter)
with respect to any shareholder vote at a meeting that occurs after
September 30 of the calendar year in which the manager's final filing
on Form 13F (Sec. 249.325 of this chapter) is due pursuant to Sec.
240.13f-1 of this part. An institutional investment manager is required
to file a Form N-PX for the period July 1 through September 30 of the
calendar year in which the manager's final filing on Form 13F is due
pursuant to Sec. 240.13f-1 of this part; this filing is required to be
made not later than February 28 of the immediately following calendar
year. For purposes of this paragraph, ``final filing'' on Form 13F
means any quarterly filing on Form 13F if no filing on Form 13F is
required for the immediately subsequent calendar quarter.
PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934
3. The authority citation for part 249 is amended by adding the
following citation in numerical order to read as follows:
Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; and 18
U.S.C. 1350, unless otherwise noted.
* * * * *
Section 249.326 is also issued under sec. 951(d), Pub. L. 111-203,
124 Stat. 1376.
* * * * *
4. The heading for Subpart D is revised to read as follows:
Subpart D--Forms for Annual and Other Reports of Issuers and Other
Persons Required Under Sections 13, 14A, and 15(d) of the
Securities Exchange Act of 1934
5. Section 249.326 is added to read as follows:
Sec. 249.326 Form N-PX, annual report of proxy voting record.
This form shall be used by institutional investment managers to
file an annual report pursuant to Sec. 240.14Ad-1 of this chapter
containing the manager's proxy voting record.
Note: The text of Form N-PX does not, and these amendments will
not, appear in the Code of Federal Regulations.
PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940
6. The authority citation for part 270 is amended by adding the
following citation in numerical order to read as follows:
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, and 80a-
39, unless otherwise noted.
* * * * *
Section 270.30b1-4 is also issued under sec. 951(d), Pub. L.
111-203, 124 Stat. 1376.
* * * * *
Sec. 270.30b1-4
7. Section 270.30b1-4 is amended by removing the phrase ``Form N-PX
(Sec. 274.129 of this chapter)'' and adding in its place ``Form N-PX
(Sec. Sec. 249.326 and 274.129 of this chapter)''.
PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940
8. The authority citation for part 274 is amended by adding the
following citation in numerical order to read as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-8, 80a-24, 80a-26, and 80a-29, unless otherwise
noted.
* * * * *
Section 274.129 is also issued under sec. 951(d), Pub. L. 111-
203, 124 Stat. 1376.
* * * * *
9. The heading of Sec. 274.129 is revised to read as follows:
Sec. 274.129 Form N-PX, annual report of proxy voting record.
* * * * *
10. Form N-PX (referenced in Sec. Sec. 249.326 and 274.129) is
revised to read as follows:
Note: The text of Form N-PX does not, and these amendments will
not, appear in the Code of Federal Regulations.
OMB APPROVAL
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Form N-PX
Annual Report of Proxy Voting Record
General Instructions
A. Rule as to Use of Form N-PX.
Form N-PX is to be used for reports pursuant to Section 30 of the
Investment Company Act of 1940 (``Investment Company Act'') and Rule
30b1-4 under the Investment Company Act (17 CFR 270.30b1-4) by all
registered management investment companies, other than small business
investment companies registered on Form N-5, to file their complete
proxy voting record. Form N-PX is also to be used for reports pursuant
to Section 14A(d) of the Securities Exchange Act of 1934 (``Exchange
Act'') and Rule 14Ad-1 under the Exchange Act (17 CFR 240.14Ad-1) by
institutional investment managers subject to Section 13(f) of the
Exchange Act (``Institutional Managers'') to file their proxy voting
record regarding votes pursuant to Sections 14A(a) and (b) of the
Exchange Act. Form N-PX is to be filed not later than August 31 of each
year for the most recent twelve-month period ended June 30.
An Institutional Manager is not required to file a report on Form
N-PX for the twelve-month period ending June 30 of the calendar year in
which the manager's initial filing on Form 13F is due pursuant to Rule
13f-1 under the Exchange Act. An Institutional Manager is not required
to file a report on Form N-PX with respect to any shareholder vote at a
meeting that occurs after September 30 of the calendar year in which
the manager's final filing on Form 13F is due pursuant to Rule 13f-1
under the Exchange Act. An Institutional Manager is required to file a
Form N-PX for the period July 1 through September 30 of the calendar
year in which the manager's final filing on Form 13F is due pursuant to
Rule 13f-1 under the Exchange Act; this filing is required to be made
not later than February 28 of the immediately following calendar year.
For purposes of this paragraph, an ``initial filing'' on Form 13F means
any quarterly filing on Form 13F if no filing on Form 13F was required
for the immediately preceding calendar quarter, and ``final filing'' on
Form 13F means any quarterly filing on
[[Page 66639]]
Form 13F if no filing on Form 13F is required for the immediately
subsequent calendar quarter.
B. Application of General Rules and Regulations.
The General Rules and Regulations under the Investment Company Act
and the Exchange Act contain certain general requirements that are
applicable to reporting on any form under those Acts. These general
requirements should be carefully read and observed in the preparation
and filing of reports on this form, except that any provision in the
form or in these instructions shall be controlling.
C. Preparation of Report.
1. This form is not to be used as a blank form to be filled in, but
only as a guide in preparing the report in accordance with Rules 12b-11
(17 CFR 240.12b-11) and 12b-12 (17 CFR 240.12b-12) under the Exchange
Act (for reports filed by Institutional Managers) and Rules 8b-11 (17
CFR 270.8b-11) and 8b-12 (17 CFR 270.8b-12) under the Investment
Company Act (for reports filed by registered management investment
companies). The Commission does not furnish blank copies of this form
to be filled in for filing.
2. The instructions to this form are not to be filed with the
report. When preparing the report, omit all bracketed text.
D. Rules To Prevent Duplicative Reporting.
1. If two or more Institutional Managers, each of which is required
by Rule 14Ad-1 to file a report on Form N-PX for the reporting period,
shared the power to vote, or to direct the voting of, the same
securities on a vote pursuant to Section 14A(a) or (b) of the Exchange
Act, only one such Institutional Manager must include the information
regarding that vote in its report on Form N-PX.
2. An Institutional Manager is not required to report proxy votes
that are reported on a Form N-PX report that is filed by a registered
management investment company.
3. An Institutional Manager that had or shared the power to vote,
or to direct the voting of, any security with respect to proxy votes
that are reported by another Institutional Manager or Managers pursuant
to General Instruction D.1, or are reported on a Form N-PX report filed
by a registered management investment company, must identify each
Institutional Manager and registered management investment company
reporting on its behalf in the manner described in Special Instruction
B.2.c. and d.
4. An Institutional Manager reporting proxy votes that are subject
to shared voting power pursuant to Instruction D.1 must identify any
other Institutional Managers on whose behalf the filing is made in the
manner described in Special Instruction C.2.
5. A registered management investment company reporting proxy votes
that would otherwise be required to be reported by an Institutional
Manager must identify any Institutional Managers on whose behalf the
filing is made in the manner described in Special Instruction C.2.
E. Signature and Filing of Report.
1. If the report is filed in paper pursuant to a hardship exemption
from electronic filing (see Item 201 et seq. of Regulation S-T (17 CFR
232.201 et seq.)), eight complete copies of the report shall be filed
with the Commission. At least one complete copy of the report filed
with the Commission must be manually signed. Copies not manually signed
must bear typed or printed signatures.
2. a. For reports filed by registered management investment
companies, the report must be signed on behalf of the registered
management investment company by its principal executive officer or
officers. For reports filed by Institutional Managers, the report must
be signed on behalf of the Institutional Manager by an authorized
person.
b. The name and title of each person who signs the report shall be
typed or printed beneath his or her signature. Attention is directed to
Rule 12b-11 under the Exchange Act and Rule 8b-11 under the Investment
Company Act concerning manual signatures and signatures pursuant to
powers of attorney.
Special Instructions
A. Organization of Form N-PX
1. This form consists of three parts: the Form N-PX Cover Page
(``Cover Page''), the Form N-PX Summary Page (``Summary Page''), and
the proxy voting information required by the form (``Proxy Voting
Information'').
2. Present the Cover Page and the Summary Page information in the
format and order provided in the form. Do not include any additional
information on the Cover Page or Summary Page.
B. Cover Page
1. Amendments to a Form N-PX report must either restate the Form N-
PX report in its entirety or include only proxy voting information that
is being reported in addition to the information already reported in a
current public Form N-PX report for the same period. If the Form N-PX
report is filed as an amendment, then the reporting person must check
the amendment box on the Cover Page, enter the amendment number, and
check the appropriate box to indicate whether the amendment (a) is a
restatement or (b) adds new Proxy Voting Information. Each amendment
must include a complete Cover Page and, if applicable, a Summary Page.
2. Designate the Report Type for the Form N-PX report by checking
the appropriate box in the Report Type section of the Cover Page, and
include, where applicable, the List of Other Persons Reporting for this
Manager (on the Cover Page), the Summary Page, and the Proxy Voting
Information, as follows:
a. For a report by a registered management investment company,
check the box for Report Type ``Registered Management Investment
Company Report,'' omit from the Cover Page the List of Other Persons
Reporting for this Manager, and include both the Summary Page and the
Proxy Voting Information.
b. For a report by an Institutional Manager that includes all proxy
votes required to be reported by the Institutional Manager, check the
box for Report Type ``Institutional Manager Voting Report,'' omit from
the Cover Page the List of Other Persons Reporting for this Manager,
and include both the Summary Page and the Proxy Voting Information.
c. For a report by an Institutional Manager, when all proxy votes
required to be reported by the Institutional Manager are reported by
another Institutional Manager or Managers or by one or more registered
management investment companies, check the box for Report Type
``Institutional Manager Notice,'' include (on the Cover Page) the List
of Other Persons Reporting for this Manager, and file the Cover Page
and required signature only.
d. For a report by an Institutional Manager, if only part of the
proxy votes required to be reported by the Institutional Manager are
reported by another Institutional Manager or Managers or one or more
registered management investment companies, check the box for Report
Type ``Institutional Manager Combination Report,'' include (on the
Cover Page) the List of Other Persons Reporting for this Manager, and
include both the Summary Page and the Proxy Voting Information.
[[Page 66640]]
C. Summary Page
1. Include on the Summary Page the number of included Institutional
Managers. Enter as the number of included Institutional Managers the
total number of Institutional Managers listed in the list of included
Institutional Managers on the Summary Page, and do not count the
reporting person filing this report. See Special Instruction C.2. If
none, enter the number zero (``0'').
2. Include on the Summary Page the list of included Institutional
Managers. Use the title, column headings, and format provided.
a. If this Form N-PX report does not report the proxy votes of any
Institutional Manager other than the reporting person, enter the word
``NONE'' under the title and omit the column headings and list entries.
b. If this Form N-PX report reports the proxy votes of one or more
Institutional Managers other than the reporting person, enter in the
list of included Institutional Managers all such Institutional Managers
together with their respective Form 13F file numbers, if known. (The
Form 13F file numbers are assigned to Institutional Managers when they
file their first Form 13F.) Assign a number to each Institutional
Manager in the list of included Institutional Managers, and present the
list in sequential order. The numbers need not be consecutive. Do not
include the reporting person filing this report.
D. Proxy Voting Information
1. Disclose the information required by Item 1 in the order
presented in paragraphs (a)-(k) of Item 1.
2. The exchange ticker symbol or CUSIP number required by paragraph
(b) or (c) of Item 1 may be omitted if it is not available through
reasonably practicable means, e.g., in the case of certain securities
of foreign issuers.
3. Item 1(e) requires a brief identification of the matter for all
matters. In responding to Item 1(e), the reporting person should
identify any matter that is a shareholder vote pursuant to Section 14A
of the Exchange Act in the following manner:
a. Identify a Section 14A(a)(1) vote as ``14A Executive
Compensation.''
b. Identify a Section 14A(a)(2) vote as ``14A Executive
Compensation Vote Frequency.''
c. Identify a Section 14A(b) vote as ``14A Extraordinary
Transaction Executive Compensation.''
4. In responding to Item 1(g), an Institutional Manager must report
the number of shares over which the Institutional Manager had sole
voting power separately from the number of shares over which the
Institutional Manager had shared voting power. In responding to Item
1(g), an Institutional Manager also must separately report shares when
the groups of Institutional Managers who share voting power are
different. For example, if the reporting Institutional Manager shares
voting power with respect to 10,000 shares with Manager A and shares
voting power with respect to 50,000 shares with Managers A and B, then
the groups of 10,000 and 50,000 shares must be separately reported. In
responding to Item 1(g), a registered management investment company
must separately report shares with respect to which different
Institutional Managers or groups of Institutional Managers have or
share voting power.
5. In the case of a reporting person that is a registered
management investment company that offers multiple series of shares,
provide the information required by Item 1 separately for each series.
The term ``series'' means shares offered by a registered management
investment company that represent undivided interests in a portfolio of
investments and that are preferred over all other series of shares for
assets specifically allocated to that series in accordance with Rule
18f-2(a) under the Investment Company Act (17 CFR 270.18f-2(a)).
Confidential Treatment Instructions
1. A reporting person should make requests for confidential
treatment of information reported on this form in accordance with Rule
24b-2 under the Exchange Act (17 CFR 240.24b-2).
2. Paragraph (b) of Rule 24b-2 requires a person filing
confidential information with the Commission to indicate at the
appropriate place in the public filing that the confidential portion
has been so omitted and filed separately with the Commission. A
reporting person should comply with this provision by including on the
Summary Page, after the number of included Institutional Managers and
prior to the list of included Institutional Managers, a statement that
confidential information has been omitted from the public Form N-PX
report and filed separately with the Commission.
3. A reporting person must file in paper, in accordance with Rule
101(c)(1)(i) of Regulation S-T (17 CFR 232.101(c)(1)(i)), all requests
for and information subject to the request for confidential treatment.
If a reporting person requests confidential treatment with respect to
information required to be reported on Form N-PX, the reporting person
must file in paper with the Secretary of the Commission an original and
two copies of the Form N-PX reporting information for which the
reporting person requests confidential treatment.
4. A reporting person requesting confidential treatment must
provide enough factual support for its request to enable the Commission
to make an informed judgment as to the merits of the request. If a
request for confidential treatment of information filed on Form N-PX
relates to a request for confidential treatment of information included
in an Institutional Manager's filing on Form 13F, the Institutional
Manager should so state and identify the related request. In such
cases, the Institutional Manager need not repeat the analysis set forth
in the request for confidential treatment in connection with the Form
13F filing. The Institutional Manager's request, however, must explain
whether and, if so, how the Form N-PX and Form 13F confidential
treatment requests are related.
5. State the period of time for which confidential treatment of the
proxy voting information is requested. The time period specified may
not exceed one (1) year from the date that the Form N-PX report is
required to be filed with the Commission. The request must include a
justification of the time period for which confidential treatment is
requested, as required by Rule 24b-2(b)(2)(ii).
6. At the expiration of the period for which confidential treatment
has been granted (the ``Expiration Date''), the Commission, without
additional notice to the reporting person, will make the proxy voting
information public unless a de novo request for confidential treatment
of the information that meets the requirements of Rule 24b-2 and these
Confidential Treatment Instructions is filed with the Commission at
least fourteen (14) days in advance of the Expiration Date.
7. Upon the final adverse disposition of a request for confidential
treatment, or upon the expiration of the confidential treatment
previously granted for a filing, unless a hardship exemption is
available, the reporting person must submit electronically, within six
(6) business days of the expiration or notification of the final
disposition, as applicable, an amendment to its publicly filed Form N-
PX report that includes the proxy voting information as to which the
Commission denied confidential treatment or for which confidential
treatment has expired. An amendment filed under such circumstances must
not be a restatement; the reporting
[[Page 66641]]
person must designate it as an amendment which adds new proxy voting
information. The reporting person must include at the top of the Form
N-PX Cover Page the following legend to correctly designate the type of
filing being made:
This filing lists proxy vote information reported on the Form N-PX
filed on (date) pursuant to a request for confidential treatment and
for which (that request was denied/confidential treatment expired) on
(date).
Paperwork Reduction Act Information
Form N-PX is to be used by a registered management investment
company, other than a small business investment company registered on
Form N-5 (17 CFR 239.24 and 274.5), to file reports with the Commission
pursuant to Section 30 of the Investment Company Act and Rule 30b1-4
thereunder. Form N-PX is also to be used by an institutional investment
manager subject to Section 13(f) of the Exchange Act to file reports
with the Commission as required by Section 14A(d) of the Exchange Act
and Rule 14Ad-1 thereunder. Form N-PX is to be filed not later than
August 31 of each year, containing the reporting person's proxy voting
record for the most recent twelve-month period ended June 30. The
Commission may use the information provided on Form N-PX in its
regulatory, disclosure review, inspection, and policymaking roles.
Registered management investment companies and institutional
investment managers are required to disclose the information specified
by Form N-PX, and the Commission will make this information public.
Registered management investment companies and institutional investment
managers are not required to respond to the collection of information
contained in Form N-PX unless the Form displays a currently valid
Office of Management and Budget (``OMB'') control number. Please direct
comments concerning the accuracy of the information collection burden
estimate and any suggestions for reducing the burden to the Secretary,
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-1090. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. 3507.
Form N-PX
Annual Report of Proxy Voting Record
Form N-PX Cover Page
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(Name of reporting person) (For registered management investment
companies, provide exact name of registrant as specified in charter)
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
-----------------------------------------------------------------------
(Name and address of agent for service)
Telephone number of reporting person, including area code: --------
--------
Report for the [year ended June 30, ----] [period July 1, ---- to
September 30, ----]
Commission Investment Company Act or Form 13F File Number: [811- ]
[28- ]----
Check here if amendment [ballot]; Amendment number: --------
This Amendment (check only one):
[ballot] is a restatement.
[ballot] adds new proxy voting entries.
Report Type (check only one):
[ballot] Registered Management Investment Company Report.
[ballot] Institutional Manager Voting Report (Check here if all proxy
votes of this reporting manager are reported in this report.)
[ballot] Institutional Manager Notice (Check here if no proxy votes
reported are in this report, and all proxy votes are reported by other
reporting person(s).)
[ballot] Institutional Manager Combination Report (Check here if a
portion of the proxy votes for this reporting manager are reported in
this report and a portion are reported by other reporting person(s).)
List of Other Persons Reporting for this Manager:
[If there are no entries in this list, omit this section.]
------------------------------------------------------------------------
Investment Company Act or Form 13F File Number Name
------------------------------------------------------------------------
[811- ] [28- ].................................... ....................
------------------------------------------------------------------------
[Repeat as necessary.]
FORM N-PX SUMMARY PAGE
Number of Included Institutional Managers: ----
List of Included Institutional Managers:
Provide a numbered list of the name(s) and 13F file number(s) of
all Institutional Managers with respect to which this report is filed,
other than the reporting person filing this report.
[If there are no entries in this list, state ``NONE'' and omit the
column headings and list entries.]
----------------------------------------------------------------------------------------------------------------
No. Form 13F File No. Name
----------------------------------------------------------------------------------------------------------------
28-..................... ...............................................
----------------------------------------------------------------------------------------------------------------
[Repeat as necessary.]
Form N-PX
Item 1. Proxy Voting Record.
If the reporting person is a registered management investment
company, disclose the following information for each matter relating to
a portfolio security considered at any shareholder meeting held during
the period covered by the report and with respect to which the
reporting person was entitled to vote. If the reporting person is an
Institutional Manager, disclose the following information for each
shareholder vote pursuant to Sections 14A(a) and (b) of the Exchange
Act considered at any shareholder meeting held during the period
covered by the report and with respect to which the reporting person,
whether directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise, had or shared the power to
vote, or to direct the voting of, any security. If a reporting person
does not have any proxy votes to report for the reporting period, the
reporting person shall file a report with the Commission stating that
the reporting person does not have proxy votes to report.
(a) The name of the issuer of the security;
(b) The exchange ticker symbol of the security;
(c) The Council on Uniform Securities Identification Procedures
(``CUSIP'') number for the security;
(d) The shareholder meeting date;
(e) A brief identification of the matter voted on;
(f) For reports filed by registered management investment
companies, disclose whether the matter was proposed by the issuer or by
a security holder;
(g) The number of shares the reporting person was entitled to vote
(for registered management investment
[[Page 66642]]
companies) or had or shared voting power over (for Institutional
Managers);
(h) The number of shares in (g) that were voted;
(i) How the reporting person voted the shares in (h) (e.g., for or
against proposal, or abstain; for or withhold regarding election of
directors) and, if the votes were cast in multiple manners (e.g., for
and against), the number of shares voted in each manner;
(j) Whether the votes disclosed in (i) represented votes for or
against management's recommendation; and
(k) Identify each Institutional Manager on whose behalf this Form
N-PX report is being filed (other than the reporting person) and who
had or shared the power to vote, or to direct the voting of, the
securities voted by entering the number assigned to the Institutional
Manager in the List of Included Managers.
Signature
[See General Instruction E]
Pursuant to the requirements of the [Securities Exchange Act of
1934 (for Institutional Managers)] [Investment Company Act of 1940 (for
registered management investment companies)], the reporting person has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
(Reporting Person)-----------------------------------------------------
By (Signature and Title)*----------------------------------------------
Date-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her
signature.
By the Commission.
Dated: October 18, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-26536 Filed 10-27-10; 8:45 am]
BILLING CODE 8011-01-P