
[Federal Register: October 28, 2010 (Volume 75, Number 208)]
[Proposed Rules]               
[Page 66621-66642]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28oc10-22]                         


[[Page 66621]]

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Part VI





Securities and Exchange Commission





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17 CFR Parts 240, 249, 270 et al.



Reporting of Proxy Votes on Executive Compensation and Other Matters; 
Proposed Rule


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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.

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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 Dodd-Frank 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 rule-comments@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\
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    \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.
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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.
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    \5\ Public Law 111-203, 124 Stat. 1376 (2010).
    \6\ To be codified at 15 U.S.C. 78n-1.
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    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\
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    \7\ See 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).
    \8\ Exchange Act Release No. 63124 (Oct. 18, 2010).
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    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

[[Page 66623]]

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\
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    \9\ To 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).
    \10\ Proposed rule 14Ad-1.
    \11\ Form 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.
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    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.
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    \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.
    \14\ Section 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)].
    \15\ Rule 13f-1(a)(1).
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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\
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    \16\ Proposed rule 14Ad-1(a); proposed Item 1 of Form N-PX.
    \17\ Funds 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'').
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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

[[Page 66624]]

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\
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    \18\ Proposed rule 14Ad-1(a); proposed Item 1 of Form N-PX. This 
is similar to the language of rule 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. * * *''
    \19\ Cf. 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).
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    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\
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    \20\ This 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'').
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    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.
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    \21\ Rule 13f-1(a)(1); General Instruction 1 to Form 13F. See 
supra note 12 (explaining ``investment discretion'').
    \22\ There 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).
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    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.
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    \23\ Section 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.
    \24\ See General Instruction 3 and Special Instruction 10 to 
Form 13F.
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    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?

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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 twelve-month 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\
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    \25\ Proposed rule 14Ad-1(a); proposed General Instruction A to 
Form N-PX.
    \26\ Rule 30b1-4.
    \27\ See 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'').
    \28\ As 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.
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    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.
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    \29\ Proposed rule 14Ad-1(b); proposed General Instruction A to 
Form N-PX.
    \30\ Proposed rule 14Ad-1(b); proposed General Instruction A to 
Form N-PX.
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    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\
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    \31\ The 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.
    \32\ An 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.
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    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 
two-month period for filing after December 31, when the manager's Form 
13F filing status will be determined for the coming year.\36\
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    \33\ Proposed rule 14Ad-1(c); proposed General Instruction A to 
Form N-PX.
    \34\ Proposed rule 14Ad-1(c); proposed General Instruction A to 
Form N-PX.
    \35\ See 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).
    \36\ An 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.
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    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

[[Page 66626]]

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\
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    \37\ See 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.
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    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.
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    \38\ Proposed General Instruction D.1 to Form N-PX.
    \39\ Proposed General Instruction D.2 to Form N-PX. Because Form 
N-PX will permit cross-references 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.
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    If an institutional investment manager's Section 14A Votes are 
reported by another institutional investment manager or a fund, the 
non-reporting 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.
---------------------------------------------------------------------------

    \40\ Proposed General Instruction D.3 to Form N-PX.
    \41\ Proposed General Instruction D.4 to Form N-PX.
    \42\ Proposed General Instruction D.5 to Form N-PX.
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    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\
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    \43\ Proposed Special Instruction A.1 to Form N-PX.
    \44\ Proposed Special Instruction A.2 to Form N-PX.
    \45\ Proposed 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.
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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

[[Page 66627]]

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\
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    \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-.''
    \47\ See, 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).
---------------------------------------------------------------------------

    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\
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    \48\ See, 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).
    \49\ Proposed Special Instruction B.1 to Form N-PX.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \50\ Proposed Special Instruction B.2 to Form N-PX.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \51\ See Special Instructions to Form 13F (discussing the 
Summary Page).
    \52\ Proposed Special Instruction B.2.a to Form N-PX.
    \53\ Proposed Special Instructions B.2.b-d to Form N-PX.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \54\ Proposed Special Instruction C.1 to Form N-PX.
    \55\ Proposed Special Instruction C.2 to Form N-PX.
    \56\ Proposed Special Instruction C.2.a to Form N-PX.
    \57\ Proposed 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).
    \58\ See infra note 87 and accompanying text.

---------------------------------------------------------------------------

[[Page 66628]]

    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\
---------------------------------------------------------------------------

    \59\ Proposed 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.
    \60\ Proposed Item 1 of Form N-PX.
    \61\ Proposed Special Instruction B.2.c to Form N-PX.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \62\ As 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.
    \63\ Proposed Special Instruction D.1 to Form N-PX.
---------------------------------------------------------------------------

     The name of the issuer of the security; \64\
---------------------------------------------------------------------------

    \64\ Proposed Item 1(a) of Form N-PX.
---------------------------------------------------------------------------

     The exchange ticker symbol of the security; \65\
---------------------------------------------------------------------------

    \65\ Proposed 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.
---------------------------------------------------------------------------

     The Council on Uniform Securities Identification 
Procedures (``CUSIP'') number for the security; \66\
---------------------------------------------------------------------------

    \66\ Proposed 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.
---------------------------------------------------------------------------

     The shareholder meeting date; \67\
---------------------------------------------------------------------------

    \67\ Proposed Item 1(d) of Form N-PX.
---------------------------------------------------------------------------

     A brief identification of the matter voted on; \68\
---------------------------------------------------------------------------

    \68\ Proposed Item 1(e) of Form N-PX.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \69\ Proposed Item 1(f) of Form N-PX.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \70\ Proposed Item 1(g) of Form N-PX.
---------------------------------------------------------------------------

     The number of shares that were voted; \71\
---------------------------------------------------------------------------

    \71\ Proposed Item 1(h) of Form N-PX.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \72\ Proposed 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).
---------------------------------------------------------------------------

     Whether the vote was for or against management's 
recommendation; \73\ and
---------------------------------------------------------------------------

    \73\ Proposed Item 1(j) of Form N-PX.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \74\ Proposed Item 1(k) of Form N-PX.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \75\ See 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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \77\ See proposed Item 1(f) of Form N-PX; cf. current Item 1(f) 
of Form N-PX (requirement currently applicable to funds).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \78\ See 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).

---------------------------------------------------------------------------

[[Page 66629]]

    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\
---------------------------------------------------------------------------

    \79\ Proposed Item 1(g) of Form N-PX.
    \80\ Proposed Item 1(h) of Form N-PX.
    \81\ Proposed 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.
    \82\ See current Item 1(g) of Form N-PX (requiring disclosure of 
whether the fund cast its vote on a matter).
    \83\ See 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \84\ See discussion supra Part II.D.
    \85\ See 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'').
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \86\ See discussion supra Part II.D.
    \87\ See 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).
---------------------------------------------------------------------------

    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 Dodd-Frank 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\
---------------------------------------------------------------------------

    \88\ Proposed Item 1(e) of Form N-PX; proposed Special 
Instruction D.3 to Form N-PX.
    \89\ See proposed Special Instruction D.3 to Form N-PX.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \90\ Proposed 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).
    \91\ Current Item 1(i) of Form N-PX.
---------------------------------------------------------------------------

    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

[[Page 66630]]

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\
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    \92\ See 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.
    \94\ See proposed Confidential Treatment Instruction 1 to Form 
N-PX.
    \95\ Section 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.
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    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.
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    \96\ See proposed Confidential Treatment Instructions to Form N-
PX.
    \97\ See Form 13F Instructions for Confidential Treatment 
Requests.
    \98\ Portfolio 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.
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    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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    \99\ Proposed rule 30b1-4; proposed 17 CFR 249.326 and 274.129.

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[[Page 66631]]

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.
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    \100\ 44 U.S.C. 3501 et seq.
    \101\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    \102\ We 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.''
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    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.
---------------------------------------------------------------------------

    \103\ 15 U.S.C. 80a-29.
---------------------------------------------------------------------------

    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

[[Page 66632]]

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.
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    \104\ The 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 x 14.4 hours 
per year) + (3,900 portfolios holding no equity securities x 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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \106\ When 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.
    \107\ This 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 x 7.2 hours 
per year) + (3,900 portfolios holding no equity securities x 0.17 
hours per year) = 45,303 hours.
    \109\ (6,200 portfolios holding equity securities x $1,000 per 
year) + (3,900 portfolios holding no equity securities x $0 per 
year) = $6,200,000.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \110\ We 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.
    \111\ Based 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 x 1.5 hours per 
year = 9,300 hours per year.
---------------------------------------------------------------------------

    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

[[Page 66633]]

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\
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    \113\ Based on Commission staff analysis of Form 13F reports 
filed with the Commission.
    \114\ See 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.
    \115\ This 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.
    \116\ We 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).
    \117\ The 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 x 8.7 hours per filing) + (200 amendments filed annually x 1 
hour per amendment) = 35,000 hours per year.
    \119\ 4,000 institutional investment managers x $1,000 per year 
= $4,000,000 per year.
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    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\
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    \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.
    \122\ Based 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).
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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.
---------------------------------------------------------------------------

    \124\ Based on information obtained from the Thomson Reuters 
Institutional (13F) Holdings database.
---------------------------------------------------------------------------

    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

[[Page 66634]]

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 third-party 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\
---------------------------------------------------------------------------

    \125\ We 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 
x $270 per hour = $2,349).
    \126\ We 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 x $270 per hour = $270).
    \127\ See supra note 117 and accompanying text.
    \128\ ($2,349 in internal costs per annual filing x 4,000 
institutional investment managers) + ($270 in internal costs per 
amendment x 200 amendments) + ($1,000 in external costs per 
institutional investment manager x 4,000 investment managers) = 
$13,450,000.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \129\ We 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 x $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 x $405 in 
internal costs per year = $2,511,000.
---------------------------------------------------------------------------

    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 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 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

[[Page 66635]]

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\
---------------------------------------------------------------------------

    \131\ 15 U.S.C. 78w(a)(2).
    \132\ 15 U.S.C. 78c(f).
    \133\ 15 U.S.C. 80a-2(c).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

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

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.
---------------------------------------------------------------------------

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

    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\
---------------------------------------------------------------------------

    \136\ 17 CFR 240.0-10.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \137\ 17 CFR 240.13f-1.
---------------------------------------------------------------------------

    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

[[Page 66636]]

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.
---------------------------------------------------------------------------

    \138\ 17 CFR 270.0-10.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \139\ See supra note 128 and accompanying text.
    \140\ See supra note 130 and accompanying text.
---------------------------------------------------------------------------

    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

[[Page 66637]]

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 Dodd-Frank 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:
---------------------------------------------------------------------------

    \141\ Public Law 104-21, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

     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 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].

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:


Sec.  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 (Sec. Sec.  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.

[[Page 66638]]

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 (Sec. Sec.  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 (Sec.  249.325 of this 
chapter) is due pursuant to Sec.  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 (Sec. Sec.  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 (Sec.  249.325 of this chapter) is due pursuant to Sec.  
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 Sec.  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:


Sec.  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 Sec.  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.
* * * * *


Sec.  270.30b1-4  

    7. Section 270.30b1-4 is amended by removing the phrase ``Form N-PX 
(Sec.  274.129 of this chapter)'' and adding in its place ``Form N-PX 
(Sec. Sec.  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 Sec.  274.129 is revised to read as follows:


Sec.  274.129  Form N-PX, annual report of proxy voting record.

* * * * *
    10. Form N-PX (referenced in Sec. Sec.  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

[[Page 66639]]

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.

[[Page 66640]]

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

[[Page 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

-----------------------------------------------------------------------

(Name of reporting person) (For registered management investment 
companies, provide exact name of registrant as specified in charter)
-----------------------------------------------------------------------

(Address of principal executive offices) (Zip code)
-----------------------------------------------------------------------

(Name and address of agent for service)
    Telephone number of reporting person, including area code: --------
--------
    Report for the [year ended June 30, ----] [period July 1, ---- to 
September 30, ----]
    Commission Investment Company Act or Form 13F File Number: [811- ] 
[28- ]----
    Check here if amendment [ballot]; Amendment number: --------

    This Amendment (check only one):

[ballot] is a restatement.
[ballot] adds new proxy voting entries.

    Report Type (check only one):

[ballot] Registered Management Investment Company Report.
[ballot] Institutional Manager Voting Report (Check here if all proxy 
votes of this reporting manager are reported in this report.)
[ballot] 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).)
[ballot] 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: ----
    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

[[Page 66642]]

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)-----------------------------------------------------

By (Signature and Title)*----------------------------------------------

Date-------------------------------------------------------------------

* 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

