In connection with the SEC’s proposed rulemaking requiring public companies to hold say-on-pay votes as required by the Dodd-Frank Act, the SEC has also proposed rules which will require institutional investment managers to annually report their votes cast on say-on-pay and other matters. The proposed rules implement Section 951 of the Dodd-Frank Act which is codified in Section 14A(d) of the Exchange Act.
The proposed rules 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 SEC annually on Form N-PX. 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) of the Exchange Act if the institutional investment manager exercises investment discretion with respect to accounts holding certain securities having an aggregate fair market value on the last trading day of any month of any calendar year of at least $100 million.
An institutional investment manager required to report on Form N-PX would 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. The proposal would 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.