The Advisors' Blog

Yesterday, the SEC announced that it had proposed amendments to the rules governing disclosure of proxy voting by mutual funds and institutional investment managers. Among other things, the proposed rule would require all institutional investment managers who are required to file a Form 13F to disclose all of their say-on-pay votes annually on Form N-PX. Specifically, managers would have to disclose:

1. A description of say-on-pay matters that’s consistent with the description on the issuer’s form of proxy;

2. The voting item’s standardized classification (the proposal suggests standard identifiers for typical voting matters – e.g., Section 14A say-on-pay votes for executive compensation, Section 14A say-on-pay votes for frequency, Section 14A say-on-pay votes for extraordinary transaction executive compensation);

3. The number of shares voted and number of shares loaned and not recalled; and

4. How the shares were voted by the manager.

SEC Chair Gary Gensler hinted that this proposal would be coming at the CII meeting last week. If adopted, the rule would give issuers and investors more transparency into managers’ proxy voting decisions – and would finally complete the SEC’s Section 951 Dodd-Frank rulemaking mandates. The comment period will be open for 60 days after publication of the proposal in the Federal Register, which usually takes somewhere around 30 days. For coverage of the other fund voting disclosure part of the rule, see my Proxy Season Blog.

– Liz Dunshee