Enhanced Proxy Voting Disclosure Requirements for Investment Funds

On November 2, 2022, the SEC voted 3 to 2 (Commissioners Hester Peirce and Mark Uyeda dissenting) to adopt amendments to Form N-PX to enhance the information mutual funds, exchange-traded funds and certain other registered funds (“funds”) report about their proxy votes (together, the “final rules”). In addition, the final rules will require disclosure on Form N-PX of how institutional investment managers (“managers”) voted on “say-on-pay” matters.

The final rules will be effective on July 1, 2024, covering votes occurring on or after July 1, 2023.The principal requirements imposed by the final rules include:

Identification of proxy voting matters: for proxy votes in which a proxy card is required to be filed with the SEC, funds will be required to use the same language as the issuer’s proxy card to identify matters on which the fund has voted, presented in the same order as the issuer’s proxy card.

Identification of proxy voting categories: funds will be required to categorize their voting by type (including environment or climate, human rights or human capital/workforce, corporate governance, diversity, equity and inclusion).

Quantitative disclosure and securities lending: reporting persons will be required to disclose the number of shares voted or instructed to be cast, as well as the number of shares loaned but not recalled.

Structured data language and standardized reporting format: reporting persons will be required to file their reports using an XML structured data language. The amendments to Form N-PX also standardize the order of disclosure requirements and require that each fund—including each series of a multi-series trust—present its voting record separately.

Website availability of fund proxy voting records: funds will be required to disclose that their proxy voting records are publicly available on (or through) their websites and available upon request, free of charge in both cases.

Disclosure of say-on-pay votes by managers: new Rule 14Ad-1 will require managers to report annually on Form N-PX each say-on-pay vote over which the manager exercised voting power.

Enhanced Proxy Voting Disclosure Requirements for Investment Funds

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