Adopted in November 2022 with a first filing due in August of 2024, the adopted amendments to Form N-PX has flown largely under the radar for advisers. Nevertheless, despite its distant filing deadline, the new rules and form amendments went into effect for proxy votes that occurred on or after July 1st.
We recommend that Advisers, particularly those subject to filing Form 13F, get policies and procedures in place and perform preliminary testing to ensure that the data required is ready to hand next year. Advisers to mutual funds will already be familiar with Form N-PX and likely have engaged their administrators to fulfill the new obligations applicable to their funds. Any Adviser that has not cast their reporting lot in with the fund(s) that they manage may be separately subject to the rule’s filing requirements.
Just as refresher, here is a summary of the adopted amendments for advisers:
- Under Exchange Act Rule 14Ad-1, advisers who are required to file reports under section 13(f) of the Act must also file an annual report on Form N-PX each year reporting the record of the adviser’s say-on-pay proxy votes for the 12-month period ended June 30. This report will contain the adviser’s proxy voting record on the topics of executive compensation and golden parachute compensation for each vote where the manager exercised voting power. Various considerations apply where advisers share reporting responsibilities with an advised fund, share voting power, or do not have voting authority.
- Initial reporting period: July 1, 2023, through June 30, 2024.
- Initial filing deadline: August 31, 2024.
- Precondition for filers: have investment discretion over securities issuing proxies, file Form 13F.
- Key filing points: voting record with respect to say-on-pay ballot items, such as executive compensation and golden parachutes.
The rule release is available here. Naturally, we recommend that all advisers review their obligations under this rule and adopt policies and procedures designed to ensure compliance. To avoid being caught flat-footed next summer, we also recommend that advisers who currently file Form 13F, or expect to in the coming year, update their books and records practices and/or test the reporting process by their service provider so that the filing itself causes little disruption as possible next August.
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