On July 26, the U.S. Securities and Exchange Commission plans to consider a set of final proxy vote disclosure rules for institutions that are Form 13F filers.
The long-awaited rules, which are mandated by Section 951 of the Dodd-Frank Act, will require these institutional investors to annually disclose in Form N-PX filings how they cast their ballots on "say on pay" advisory votes, as well as the separate shareholder votes on "golden parachute" arrangements and the frequency of future "say on pay" votes.
The details of the final rules have not been released, but SEC observers expect that the proposed filing deadline of Aug. 31 will be extended for first-time Form N-PX filers. Currently, only mutual funds are required to disclose their proxy votes in annual N-PX filings.
The commission will consider the final rules during an 11 a.m. (EDT) open meeting at SEC headquarters in Washington. The SEC released a set of draft rules last October, but the rules have languished as the commission has dealt with budgetary constraints and many other Dodd-Frank-mandated rulemakings and studies.
Under the draft rules, an institution would be required to disclose its proxy votes if it is defined as an "institutional investment manager" under Section 13(f)(6)(A) of the Securities Exchange Act of 1934 and has to make quarterly Form 13F filings. An institution generally is subject to Section 13(f) if it exercises investment discretion over accounts with more than $100 million in equities.
The SEC received 26 comment letters on the proposed rules and held seven meetings with investors and market participants. The rules have not encountered significant opposition, but the SEC has sought input on various procedural issues, such as: who should report votes when multiple institutions have shared voting authority; whether the duty to disclose should be triggered by voting authority or investment discretion; and whether there should be a de minimis ownership exception where disclosure would not be required.
ISS plans to hold a regulatory briefing on the final rules on July 27 at 11:30 a.m. (EDT). To register, click here.