SEC Alert! SEC Requests Comment Request Extension For Mandatory Form N-PX Amendments Require Detailed Disclosure of Proxy Voting and Loaned Shares. 73% of 'Funds' Voted Against Increasing Shares 300M to 1B. How Many Shares Were Loaned & NOT Counted?
https://public-inspection.federalregister.gov/2023-14998.pdf
Wut mean?
- On November 2, 2022, the SEC adopted rule and form amendments to enhance the information funds report on Form N-PX and make that information easier to analyze.
- The amendments require funds and institutional investment managers to identify voting matters using language from the issuer’s form of proxy and categorize their votes from a list of categories.
- They also need to disclose quantitative information regarding the number of votes cast and the number of shares not voted because they are out on loan.
- The reports should be filed in an XML structured data language using a standardized format.
- If they have a website, to disclose that their proxy voting records are publicly available on or through their websites, free of charge, and to make this information available on or through its website as soon as reasonably practicable after filing a report on Form N-PX with the Commission.
- The document also provides a detailed breakdown of the estimated annual burden hours and costs associated with the amendments to Form N-PX for different categories of entities including Funds Holding Equity Securities, Funds Not Holding Equity Securities, Funds of Funds, and Institutional Investment Managers.
- Compliance with Form N-PX is mandatory and responses to the collection of information requirements will not be kept confidential.
- In the aggregate, they estimate the total annual burden to comply with amended Form N-PX to be 380,741 hours, with an average external cost of $36,141,445.
- The public may view background documentation for this information collection at www.reginfo.gov.
- Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice.
- The document is scheduled to be published in the Federal Register on July 14, 2023.
In the aggregate, we estimate the total annual burden to comply with amended Form N-PX to be 380,741 hours, with an average external cost of $36,141,445.
How to Comment:
- As per the document, the deadline should be 30 days after the document is published in the Federal Register, which is scheduled for July 14, 2023--August 13th, 2023.
Comments can be sent to two places:
The Office of Management and Budget (OMB) via email at [email protected]
- Subject: [SEC File No. 270-524, OMB Control No. 3235-0582] .
- Alternatively, you can also send an email to [email protected]
- subject: [SEC File No. 270-524, OMB Control No. 3235-0582]
- Remember to clearly state your views, provide supporting arguments and data where possible, and reference the specific sections of the document you are commenting on.
How does this impact GameStop?
From Freadom6:
TL;DR Form N-PX is the annual proxy voting record for “Registered Management Investment Companies”. These are primarily filings for mutual funds & ETFs (funds) and shows us how each fund voted their shares regarding all proxy votes they cast for companies’ issues for their annual meetings.
I was able to review the filings of 196 funds’ voting records for GME’s last vote for the 2022 annual meeting (6/2/22) and found that just 53 of the funds voted FOR the increase to the authorized common stock from 300M to 1B (this is not actual shares in circulation but is the maximum amount to be allowed into circulation) 53/196 = 27.04% voted FOR the increase.
73% of registered funds voted AGAINST GameStop management’s recommendation for an increase to the authorized common stock from 300M to 1B shares. 8 Filings were omitted due to the file being too big for my computer to open so the % could go up or down slightly.
Vanguard and Blackrock funds voted FOR the increase. Vanguard funds hold large positions in GME and their votes alone FOR the increase to common stock outweighed all 73% of funds who voted AGAINST the proposal.
From yesbabyy
From the Proposal:
- The amendments require funds and institutional investment managers to identify voting matters using language from the issuer’s form of proxy and categorize their votes from a list of categories.
- They also need to disclose quantitative information regarding the number of votes cast and the number of shares not voted because they are out on loan.
- Compliance with Form N-PX is mandatory and responses to the collection of information requirements will not be kept confidential.
The second point is particularly interesting for us. If a lot of shares are out on loan and not voted, it could be a sign of naked shorting.
- The changes to Form N-PX will help provide more transparency about these practices--if we see a large number of shares that are out on loan and not voted, it could be a red flag that something's not right!
TLDRS:
The SEC has requested an extension on a previously approved collection of information--Form N-PX, which funds and institutional investment managers use to report how they voted on various matters.
- This form is important because it provides transparency about how these entities are voting.
- Recently, the SEC made some changes to enhance the information reported on Form N-PX and make it easier to analyze.
- These changes include requiring funds and institutional investment managers to:
- Identify voting matters using language from the issuer’s form of proxy and categorize their votes from a list of categories.
- Disclose quantitative information regarding the number of votes cast and the number of shares not voted because they are out on loan.
- The second point is particularly interesting for us. If a lot of shares are out on loan and not voted, it could be a sign of naked shorting.
- The changes to Form N-PX will help provide more transparency about these practices--if we see a large number of shares that are out on loan and not voted, it could be a red flag that something's not right!
- Please consider writing to the SEC about collecting and making this information available, Comments can be sent to two places:
The Office of Management and Budget (OMB) via email at [email protected]
- Subject: [SEC File No. 270-524, OMB Control No. 3235-0582] .
Alternatively, you can also send an email to [email protected]
- subject: [SEC File No. 270-524, OMB Control No. 3235-0582]
- Remember to clearly state your views, provide supporting arguments and data where possible, and reference the specific sections of the document you are commenting on.
- Comments due by August 13th, 2023.
