Written by Robert Quinn
Founder and CEO
Institutional investment managers who file a Form 13f with the SEC will need to collate its proxy voting record to disclose how they voted on executive compensation, or so-called “say-on-pay” matter. The SEC will not require 13f filers to begin filing the new Form N-PX to disclose such data until August 31, 2024, but the filing will cover votes cast after June 30, 2023.
The Form 13f is a quarterly report filed by institutional investment managers who have discretion over $100 million or more of U.S. – listed securities. The SEC publishes a quarterly list of Section 13f securities.
While registered investment advisers will already have to keep records of their proxy voting pursuant to Rule 206(4)-6 of the Investment Advisers Act of 1940, as amended, the Form N-PX will be a new filing obligation via EDGAR.
Managers who are not registered investment advisers will need to consider implementing policies and procedures to cover the key elements of Form N-PX, which include:
- Votes to be disclosed — All “say-on-pay” votes, including: 1) periodic votes on the approval of executive compensation, 2) votes on the frequency of such say-on-pay votes, and 3) votes to approve “golden parachute” compensation in connection with mergers and acquisitions. These proxy votes are limited to those subject to the requirements of rule 14a-4 under the Securities Exchange Act of 1934, (i.e., an SEC proxy card is available for the matter).
- Investment managers covered. Any institutional investment manager that (1) has the power to vote, or direct the voting of, a security; and (2) “exercises” this power to influence a voting decision for the security.
- No exceptions. The rules do not contain a de minimis exception for smaller holdings or an exception for managers that do not vote proxies as a matter of policy.
Click for more on our SEC Compliance services.
