Every year, certain kinds of companies report information on proxy votes to the SEC using Form N-PX, which is similar to but distinct from Form DEF 14A. This required form is important for accountability and information sharing. A new rule change in 2022 requires even more disclosures. Discover what's on this important SEC form and who must file it.
What is SEC Form N-PX?
N-PX is a form that companies use to report proxy voting records. The form provides information about various aspects of voting, such as board elections, executive compensation and proposals.
Some of these changes, such as executive compensation, are relatively new for reporting purposes. For example, institutional managers subject to Section 13(f) are now required to file Form N-PX for say-on-pay votes. These changes went into effect as of the latest update (late 2022) to the N-PX form.
Registered management investment companies must fill out this form annually and file it with the SEC. Because mutual funds and exchange-traded funds are types of registered management investment companies, they are required to complete this form.
Purpose of SEC Form N-PX
Now that you understand what is Form N-PX, let's review the purpose.
The overall purpose of this form is to make specific aspects of proxy statements public so that anyone can understand voting results and priorities.
In the long term, this increases corporate transparency. It also promotes accountability. If a company made a public commitment, for instance regarding ESG priorities for disclosure and fiduciary duty, and voted in accordance with these commitments, the voting record demonstrates accountability and progress toward goals.
It is important to note that this type of information is often made available to investors in other ways. Some companies will post proxy vote results directly on their website. Others will sum up relevant information in shareholder communication, including annual reports.
Even if the company communicates this information directly to the public, they must still complete an N-PX filing.
Key Components of SEC Form N-PX
Every SEC N-PX filing contains these core components:
- Fund Information: Companies enter basic information about the fund, such as the physical address. This information must be structured and standardized in XML format for compliance.
- Voting record: For every vote cast, companies must list the meeting date, the matter put to vote, the number of votes, how the vote was cast (for, against, or abstained), and the issuer's name. If the vote was not consistent with the fund's stated policies, or if there were conflicts of interest, this must be commented on. Certain votes require a narrative explanation.
- Voting Policies and Procedures: The voting policies should be summarized and any changes made clear.
Importance for Investors
As alluded to earlier, investors may review proxy vote results to get a better understanding of how the company acts and why. Specifically, they may want to see whether decisions made align with stated goals, where they differ and why.
Investors have choices of where to invest. Many choose to invest in funds that align with their fiduciary and stewardship values. These investors won't just take a fund's word for something, they want to double-check that the fund is following through on its commitments.
By making voting information public, forms such as the N-PX allow investors to view and verify voting results. When investors understand voting results, they can make sure their investments line up with their values and adjust their portfolios if that becomes necessary.
Filing Requirements
Every year, funds and certain types of advisors must prepare and transmit their SEC N-PX filing using EDGAR, the SEC's electronic filing system and conforming to the SEC's new data tagging adn structured format rules. The form will subsequently be made accessible to the public; there is no separate process for making the N-PX publicly available.
The N-PX filing deadline is August 31. The form should cover the previous 12 months with an ending date of June 30. DFIN’s proxy statement services can help public companies make sense of their obligations, so get in touch with us today to learn more.
