Recently, the Securities and Exchange Commission (SEC) adopted new amendments to its Form N-PX. As of July 1, 2024, fund managers who currently file Form 13F reports are now also required to complete Form N-PX.
Related: 7 Frequently Asked Questions (and Answers) About Form 13F
The good news is, COMPLY is here to help take the burden of evolving regulatory standards off your plate. Let’s take a look at what’s changed with Form N-PX requirements, how your firm can meet those regulatory requirements, and how COMPLY can help.
What Is Form N-PX?
While the form had historically applied only to a registered management investment company per the Investment Company Act of 1940, Form N-PX is now also utilized by an institutional investment manager to report “how it voted proxies relating to executive compensation matters as required by Section 14A of the Securities Exchange Act, which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act.” Specifically, Form N-PX for institutional investment managers addresses “say-on-pay” executive compensation voting. This includes also “say-on-frequency” matters and “golden-parachute compensation” as it relates to a merger or acquisition.
Why Is Form N-PX Required?
According to the SEC’s final rule, the Form N-PX requirements have been updated in order to “enhance the information mutual funds, exchange-traded funds, and certain other funds currently report about their proxy votes and to make that information easier to analyze.”
As a reminder, votes on corporate matters can be assigned to designated representatives who appear at shareholder meetings on behalf of the fund holder – these are what the term “proxy votes” refers to in this context.
Related: SEC Amends Rules Governing Proxy Solicitations
Ultimately, the form’s purpose is to give investors insights into a fund’s proxy voting practices.
Who Needs to File a Form N-PX?
While Form N-PX has historically applied only to registered management investment companies per the Investment Company Act of 1940 (Investment Company Act), the form is now also applicable to persons required to file reports under Rule 13f-1 per the Securities Exchange Act of 1934 (Exchange Act). Such Form 13F filer are deemed “institutional investment managers” and any registered investment adviser (RIA) falling within this institutional investment manager definition must file Form N-PX regarding say-on-pay voting.
In short, Form N-PX is now required for your firm if it is currently a Form 13F filer.
Examples of impacted professionals include:
- Banks
- Broker-dealers buying or selling securities for their own accounts
- Insurance companies
- Corporations and pension funds managing investment portfolios
- Fund managers and other investment advisers
Notably, Form N-PX is required for Form 13F filers even if your firm does not vote say-on-pay proxies.
Note, however, that if you are not required to file Form 13F currently (e.g., your firm first crossed the Section 13(f) threshold in 2024), then you will not need to file Form N-PX for this year (and would wait until 2025 to file).
When is Form N-PX Filed?
The Form N-PX should be filed with the SEC each year by August 31, with information pertaining to the previous 12-month period running from July 1 to June 30. For example, the initial Form N-PX filing under new Rule 14Ad-1 under the Exchange Act will be due by August 31, 2024 and will cover executive compensation voting for July 1, 2023 – June 30, 2024.
How Can COMPLY’s New Form N-PX Service Help Streamline the Process?
Compliance regulations change often, and fund managers don’t always have the time or desire to stay on top of the latest news. Not to mention, more updates mean more pressure for CCOs to increase spending on payroll and resources to navigate the compliance landscape.
Related: Five Hedge Fund Compliance Updates to Know for 2024
In response to the SEC’s recent changes to Form N-PX filing requirements, COMPLY has updated its offerings to include Form N-PX and ensure your regulatory responsibilities are covered. Our team is available to file your annual Form N-PX (and quarterly Form 13F) accurately and in a timely manner, so you can stay compliant without taking more time away from your day.
The actual information collected in the Form N-PX will include (among other things):
- The issuer’s name
- Ticker symbol
- Committee on Uniform Security Identification Procedures (CUSIP) number
- Date of shareholder meeting
- Summary of what’s being voted on
Get Started with COMPLY
Navigating the complexities of regulatory compliance can be a daunting task, but with a solid understanding of Form N-PX filing requirements and COMPLY by your side, you can confidently file your Form N-PX.
Ready to streamline your compliance processes? Want to learn more about COMPLY’s extensive suite of compliance-related services? Click here to speak with a filing expert.