66622 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

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. 

5Public Law 111–203, 124 Stat. 1376 (2010). 

6To be codified at 15 U.S.C. 78n–1. 

7See 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). 

8Exchange Act Release No. 63124 (Oct. 18, 2010). 

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. 

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 DoddFrank 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 rulecomments@sec.gov. 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

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. 

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

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 

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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 66623 

9To 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). 

10Proposed rule 14Ad–1. 

11Form 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. 

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. 

14Section 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)]. 

15Rule 13f–1(a)(1). 

16Proposed rule 14Ad–1(a); proposed Item 1 of 

Form N–PX. 

17Funds 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’’). 

18Proposed rule 14Ad–1(a); proposed Item 1 of 

Form N–PX. This is similar to the language of rule 

Continued 

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

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. 

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

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 

mstockstill on DSKH9S0YB1PROD with PROPOSALS4

66624 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

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. * * *’’ 

19Cf. 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). 

20This 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’’). 

21Rule 13f–1(a)(1); General Instruction 1 to Form 

13F. See supra note 12 (explaining ‘‘investment 

discretion’’). 

22There 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). 

23Section 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. 

24See General Instruction 3 and Special 

Instruction 10 to Form 13F. 

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

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

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. 

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. 

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? 

mstockstill on DSKH9S0YB1PROD with PROPOSALS4

Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 66625 

25Proposed rule 14Ad–1(a); proposed General 

Instruction A to Form N–PX. 

26Rule 30b1–4. 

27See 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’’). 

28As 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. 

29Proposed rule 14Ad–1(b); proposed General 

Instruction A to Form N–PX. 

30Proposed rule 14Ad–1(b); proposed General 

Instruction A to Form N–PX. 

31The 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. 

32An 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. 

33Proposed rule 14Ad–1(c); proposed General 

Instruction A to Form N–PX. 

34Proposed rule 14Ad–1(c); proposed General 

Instruction A to Form N–PX. 

35See 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). 

36An 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. 

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 twelvemonth 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

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. 

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

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 twomonth period for filing after December 

31, when the manager’s Form 13F filing 

status will be determined for the coming 

year.36

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 

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66626 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

37See 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. 

38Proposed General Instruction D.1 to Form 

N–PX. 

39Proposed General Instruction D.2 to Form 

N–PX. Because Form N–PX will permit crossreferences 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. 

40Proposed General Instruction D.3 to Form 

N–PX. 

41Proposed General Instruction D.4 to Form 

N–PX. 

42Proposed General Instruction D.5 to Form 

N–PX. 

43Proposed Special Instruction A.1 to Form 

N–PX. 

44Proposed Special Instruction A.2 to Form 

N–PX. 

45Proposed 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. 

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–.’’ 

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

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. 

If an institutional investment 

manager’s Section 14A Votes are 

reported by another institutional 

investment manager or a fund, the nonreporting 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. 

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

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 

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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 66627 

47See, 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). 

48See, 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). 

49Proposed Special Instruction B.1 to Form 

N–PX. 

50Proposed Special Instruction B.2 to Form 

N–PX. 

51See Special Instructions to Form 13F 

(discussing the Summary Page). 

52Proposed Special Instruction B.2.a to Form 

N–PX. 

53Proposed Special Instructions B.2.b–d to Form 

N–PX. 

54Proposed Special Instruction C.1 to Form 

N–PX. 

55Proposed Special Instruction C.2 to Form 

N–PX. 

56Proposed Special Instruction C.2.a to Form 

N–PX. 

57Proposed 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). 

58See infra note 87 and accompanying text. 

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

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

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

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. 

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. 

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66628 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

59Proposed 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. 

60Proposed Item 1 of Form N–PX. 61Proposed Special Instruction B.2.c to Form 

N–PX. 62As 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. 

63Proposed Special Instruction D.1 to Form 

N–PX. 

64Proposed Item 1(a) of Form N–PX. 

65Proposed 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. 

66Proposed 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. 

67Proposed Item 1(d) of Form N–PX. 

68Proposed Item 1(e) of Form N–PX. 

69Proposed Item 1(f) of Form N–PX. 

70Proposed Item 1(g) of Form N–PX. 

71Proposed Item 1(h) of Form N–PX. 

72Proposed 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). 

73Proposed Item 1(j) of Form N–PX. 

74Proposed Item 1(k) of Form N–PX. 

75See 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. 

77See proposed Item 1(f) of Form N–PX; cf. 

current Item 1(f) of Form N–PX (requirement 

currently applicable to funds). 

78See 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). 

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

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

• The name of the issuer of the 

security; 64

• The exchange ticker symbol of the 

security; 65

• The Council on Uniform Securities 

Identification Procedures (‘‘CUSIP’’) 

number for the security; 66

• The shareholder meeting date; 67

• A brief identification of the matter 

voted on; 68

• 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

• 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

• The number of shares that were 

voted; 71

• 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

• Whether the vote was for or against 

management’s recommendation; 73 and 

• 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

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. 

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. 

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. 

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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 66629 

79Proposed Item 1(g) of Form N–PX. 

80Proposed Item 1(h) of Form N–PX. 

81Proposed 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. 

82See current Item 1(g) of Form N–PX (requiring 

disclosure of whether the fund cast its vote on a 

matter). 

83See 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. 

84See discussion supra Part II.D. 

85See 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’’). 

86See discussion supra Part II.D. 

87See 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). 

88Proposed Item 1(e) of Form N–PX; proposed 

Special Instruction D.3 to Form N–PX. 

89See proposed Special Instruction D.3 to Form 

N–PX. 

90Proposed 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). 

91Current Item 1(i) of Form N–PX. 

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

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

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

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 DoddFrank 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

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. 

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 

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66630 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

92See 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. 

94See proposed Confidential Treatment 

Instruction 1 to Form N–PX. 

95Section 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. 

96See proposed Confidential Treatment 

Instructions to Form N–PX. 

97See Form 13F Instructions for Confidential 

Treatment Requests. 

98Portfolio 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. 

99Proposed rule 30b1–4; proposed 17 CFR 

249.326 and 274.129. 

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

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. 

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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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 66631 

100 44 U.S.C. 3501 et seq. 

101 44 U.S.C. 3507(d) and 5 CFR 1320.11. 

102We 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.’’ 103 15 U.S.C. 80a–29. 

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. 

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. 

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 

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66632 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

104The 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 × 

14.4 hours per year) + (3,900 portfolios holding no 

equity securities × 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). 

106When 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. 

107This 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 × 

7.2 hours per year) + (3,900 portfolios holding no 

equity securities × 0.17 hours per year) = 45,303 

hours. 

109 (6,200 portfolios holding equity securities × 

$1,000 per year) + (3,900 portfolios holding no 

equity securities × $0 per year) = $6,200,000. 

110We 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. 

111Based 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 × 1.5 

hours per year = 9,300 hours per year. 

113Based on Commission staff analysis of Form 

13F reports filed with the Commission. 

114See 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. 

115This 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. 

116We 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). 

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. 

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. 

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. 

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 

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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 66633 

117The 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 × 8.7 hours per filing) + (200 

amendments filed annually × 1 hour per 

amendment) = 35,000 hours per year. 

119 4,000 institutional investment managers × 

$1,000 per year = $4,000,000 per year. 

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. 

122Based 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). 

124Based on information obtained from the 

Thomson Reuters Institutional (13F) Holdings 

database. 

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

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

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. 

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 

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66634 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

125We 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 × $270 per hour = $2,349). 

126We 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 × $270 

per hour = $270). 

127See supra note 117 and accompanying text. 

128 ($2,349 in internal costs per annual filing × 

4,000 institutional investment managers) + ($270 in 

internal costs per amendment × 200 amendments) 

+ ($1,000 in external costs per institutional 

investment manager × 4,000 investment managers) 

= $13,450,000. 

129We 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 × $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 × 

$405 in internal costs per year = $2,511,000. 

131 15 U.S.C. 78w(a)(2). 

132 15 U.S.C. 78c(f). 

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 thirdparty 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

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

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 thirdparty 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 

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133 15 U.S.C. 80a–2(c). 

134 5 U.S.C. 603 et seq. 

135 5 U.S.C. 601(6). 

136 17 CFR 240.0–10. 

137 17 CFR 240.13f–1. 

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

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. 

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. 

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

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. 

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 

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138 17 CFR 270.0–10. 

139See supra note 128 and accompanying text. 

140See supra note 130 and accompanying text. 

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. 

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

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 

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141Public Law 104–21, Title II, 110 Stat. 857 

(1996). 

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 DoddFrank 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: 

• 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 DoddFrank 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: 

§ 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 

(§§ 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. 

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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 (§§ 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 (§ 249.325 of this 

chapter) is due pursuant to § 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 (§§ 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 (§ 249.325 of 

this chapter) is due pursuant to 

§ 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 

§ 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: 

§ 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 

§ 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. 

* * * * * 

§ 270.30b1–4

7. Section 270.30b1–4 is amended by 

removing the phrase ‘‘Form N–PX 

(§ 274.129 of this chapter)’’ and adding 

in its place ‘‘Form N–PX (§§ 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 § 274.129 is revised 

to read as follows: 

§ 274.129 Form N–PX, annual report of 

proxy voting record. 

* * * * * 

10. Form N–PX (referenced in 

§§ 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 

OMB Number: 

Expires: 

Estimated average burden 

hours per response 

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 

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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. 

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66640 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

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 

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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 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 

lllllllllllllllllll

(Name of reporting person) (For 

registered management investment 

companies, provide exact name of 

registrant as specified in charter) 

lllllllllllllllllll

(Address of principal executive offices) 

(Zip code) 

lllllllllllllllllll

(Name and address of agent for service) 

Telephone number of reporting 

person, including area code: 

llllllll 

Report for the [year ended June 30, 

ll] [period July 1, ll to September 

30, ll] 

Commission Investment Company Act 

or Form 13F File Number: [811- ] 

[28- ]ll 

Check here if amendment b; 

Amendment number: llll 

This Amendment (check only one): 

b is a restatement. 

b adds new proxy voting entries. 

Report Type (check only one): 

b Registered Management Investment 

Company Report. 

b Institutional Manager Voting Report 

(Check here if all proxy votes of this 

reporting manager are reported in this 

report.) 

b 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).) 

b 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: ll 

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 

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66642 Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Proposed Rules 

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) lllllllll

By (Signature and Title)* llllll

Date llllllllllllllll

* 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 

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