On July 1, 2009, the SEC approved a New York Stock Exchange proposal to amend NYSE Rule 452 to eliminate discretionary voting by brokers in any election of directors for all issuers except registered funds. Previously, the rule allowed brokers to vote on “routine” proposals, including uncontested director elections, when specific voting instructions were not provided by the beneficial owner at least 10 days prior to a scheduled meeting. The amendments to Rule 452 shift this classification to “non-routine,” and thereby eliminate discretionary voting for uncontested director elections. The rule amendments do not apply to registered funds; thus, discretionary broker voting will still be permitted for uncontested director elections for funds.

The rule amendments also codify previous NYSE interpretations that prohibit discretionary broker voting in connection with material changes to a fund’s investment advisory contract, including assignments of advisory contracts as a result of an adviser’s change of control, or a fund’s investment advisory contract with a new investment adviser.