Form N-PX (Supporting Statement)

OMB CONTROL NUMBER: 3235-0582

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form N-PX
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Form N-PX is used for reports pursuant to section 30 of the Investment Company Act of
1940 (the “Act”) 1 and rule 30b1-4 under the Act by all registered management investment
companies, other than small business investment companies registered on Form N-5 (“funds”), to
file their complete proxy voting records not later than August 31 of each year for the most recent
twelve-month period ended June 30. 2
Funds are required to disclose certain information on Form N-PX 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. This required information
includes certain information about the portfolio security, the voting matter, and whether and how
the fund cast its vote. 3
On September 29, 2021, the Commission proposed rule and form amendments
(“Proposal”) that would enhance the information funds report on Form N-PX and make that
information easier to analyze. The Commission also proposed a new rule that would require an
institutional investment manager subject to section 13(f) of the Securities Exchange Act of 1934
(“Exchange Act”) 4 to report annually on Form N-PX how it voted proxies relating to executive

1

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

2

Rule 30b1-4 under the Act; General Instruction A of Form N-PX.

3

Item 1 of Form N-PX.

4

15 U.S.C. 78m.

compensation matters, as required by section 14A of the Exchange Act. The Proposal would
require funds (and, for executive compensation matters, institutional investment managers) to (i)
identify voting matters using language from the issuer’s form of proxy and categorize their votes
from a list of categories; (ii) disclose quantitative information regarding the number of votes cast
(or instructed to be cast) and the number of shares not voted because they are out on loan; and
(iii) file reports in an XML structured data language using a standardized format.
2.

Purpose and Use of the Information Collection

The purpose of Form N-PX is to meet the filing and disclosure requirements of rules
under the Act and also to enable funds to provide investors with information necessary to
evaluate an investment in the fund. This information collection is primarily for the use and
benefit of investors. The information filed with the Commission also permits the verification of
compliance with securities law requirements and assures the public availability and
dissemination of the information. Under the Proposal, Form N-PX would also be used by
institutional investment managers to meet the filing and disclosure requirements of section 14A
under the Exchange Act.
3.

Consideration Given to Information Technology

The Commission’s Electronic Data Gathering, Analysis, and Retrieval System
(“EDGAR”) automates the filing, processing, and dissemination of full disclosure filings. This
automation has increased the speed, accuracy, and availability of information, generating benefits
to investors and financial markets. Reports on Form N-PX are required to be filed electronically
on EDGAR and, under the Proposal, reports on Form N-PX would be required to be filed in
structured (XML) format, which permits the electronic analysis of the data in a single filing and
comparisons over time or across multiple filers. The public may access filings on EDGAR

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through the Commission’s website (http://www.sec.gov) or at EDGAR terminals located at the
Commission’s public reference rooms. The Proposal would also require a fund to disclose on its
registration form (Form N-1A, N-2, or N-3, as applicable), that its proxy voting record is
available either on (or through) the fund’s website, or upon request.
4.

Duplication

The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or form or a
change in a rule or form. The information required by Form N-PX is not generally duplicated
elsewhere.
5.

Effect on Small Entities

The Commission reviews all rules periodically, as required by the Regulatory Flexibility
Act, 5 to identify methods to minimize recordkeeping or reporting requirements affecting small
businesses. The current disclosure requirements for Form N-PX do not distinguish between
small entities and other funds. Although the burden on smaller funds may be greater than those
of larger funds, the Commission believes that imposing different requirements on small entities
would not be consistent with investor protection.
6.

Consequences of Not Conducting Collection

Rule 30b1-4 under the Act requires that reports of funds’ proxy voting records on
Form N-PX be filed with the Commission annually. Less frequent collection would mean that
current information might not be available to fund investors.

5

5 U.S.C. 601 et seq.

3

7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

None.
8.

Consultation Outside the Agency

The Commission and the staff of the Division of Investment Management participate in
an ongoing dialogue with representatives of the investment company industry through public
conferences, meetings, and informal exchanges. These various forums provide the Commission
and the staff with a means of ascertaining and acting upon the paperwork burdens confronting
the industry. The Commission has previously requested public comment on the collection of
information requirements in Form N-PX and received no comments in response to its request.
The Commission has requested public comment on the Proposal, including the collection of
information requirements resulting therefrom. Before adopting the Proposal, the Commission
will receive and evaluate public comments on the Proposal and the associated collection of
information requirements.
9.

Payment or Gift

Not applicable.
10.

Confidentiality

Not applicable.
11.

Sensitive Questions

No information of a sensitive nature, including social security numbers, will be required
under this collection of information. The information collection collects basic Personally
Identifiable Information (PII) that may include names, job titles, work addresses and telephone
numbers. However, the agency has determined that the information collection does not
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constitute a system of record for purposes of the Privacy Act. Information is not retrieved by a
personal identifier. In accordance with Section 208 of the E-Government Act of 2002, the
agency has conducted a Privacy Impact Assessment (PIA) of the EDGAR system, in connection
with this collection of information. The EDGAR PIA, published on 2/5/2020, is provided as a
supplemental document and is also available at https://www.sec.gov/about/privacy/pia/piaedgar.pdf.
12.

Burden of Information Collection

The following estimates of average burden hours and costs are made solely for purposes
of the Paperwork Reduction Act of 1995 (“PRA”) 6 and are not derived from a comprehensive or
even representative survey or study of the cost of Commission rules and forms. In our most
recent PRA submission for Form N-PX, we estimated a total hour burden of 47,984 hours and a
total annual internal cost burden of $17.66 million. Compliance with Form N-PX is mandatory
for funds and, if the Proposal is adopted, would be mandatory for institutional investment
managers. Responses to the collection of information requirements will not be kept confidential.
The table below summarizes our PRA initial and ongoing annual burden estimates associated
with the proposed amendments to Form N-PX. 7

6

44 U.S.C. 3501 et seq.

7

The Proposal would also amend Forms N-1A, N-2, and N-3 to disclose that funds’ proxy voting
records are available on (or through) their websites. Although the website availability requirement
would be located in the relevant registration form, the Commission proposed to reflect the burden
for these requirements in the burden estimate for Form N-PX — Annual Report of Proxy Voting
Record, and not in the burden for Forms N-1A, N-2, or N-3.

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TABLE 1: FORM N-PX PRA ESTIMATES
Internal initial
burden hours

Internal annual
burden hours1

Wage rate2

Internal time
costs

Annual external
cost burden

$1,000

Funds Holding Equity Securities
Estimated annual burden
of current Form N-PX per
response

7.2

×

$3733

$2,686

8

×

$3254

$2,600

Additional estimated
annual burden associated
with amendments to
Form N-PX

10

×

$3355

$3,350

Proposed website
availability requirement6

0.5

×

$2546

$127

Estimated number of
annual responses8

× 7,064

× 7,064

× 7,064

Total annual burden

181,545

$61,901,832

$10,596,000

Estimated initial burden
to accommodate new
reporting requirements

24

$500

Funds Not Holding Equity Securities
Estimated annual burden
of current Form N-PX per
response

0.17

×

$3733

$63

Additional estimated
annual burden associated
with amendments to
Form N-PX
Estimated number of
annual responses8

× 3,188

Total annual burden

542

× 3,188

$200,844
Funds of Funds

Estimated annual burden
of current Form N-PX per
response
Additional estimated
annual burden associated

1

×

$3733

$373

$100

0.5

×

$3733

$187

$100

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with amendments to
Form N-PX
Proposed website
availability requirement6

0.5

Estimated number of
annual responses8

× 1,367

× 1,367

× 1,367

Total annual burden

2,734

$939,129

$273,400

×

$2546

$127

Institutional Investment Managers
Changes to systems to
accommodate new
reporting requirements

10

×

$3259

$3,250

Estimated annual burden
associated with Form
N-PX filing requirement

5

×

$33510

$1,675

$1,000

Estimated number of
annual responses11

× 7,744

× 7,744

× 7,744

Total annual burden

116,160

$38,139,200

$7,744,000

30

Total Burden
Current burden estimate

52,770

$18,973,904

$7,200,700

Additional burden
estimate

248,211

$82,207,101

$11,412,700

Total annual burden

300,981

$101,181,005

$18,613,400

Certain products and sums do not tie due to rounding.
1. Includes initial burden estimates amortized over a three-year period.
2. The Commission’s estimates of the relevant wage rates are based on salary information for the securities industry compiled by the
Securities Industry and Financial Markets Association’s Office Salaries in the Securities Industry 2013. The estimated figures are
modified by firm size, employee benefits, overhead, and adjusted to account for the effects of inflation. See Securities Industry and
Financial Markets Association, Report on Management & Professional Earnings in the Securities Industry 2013.
3. Represents the estimated hourly wage rate of a compliance attorney.
4. Represents the blended estimated hourly wage rates of a programmer (4 hours at $277/hour) and a compliance attorney (4 hours
at $373/hour).
5. Represents the blended estimated hourly wage rates of a programmer (4 hours at $277/hour) and a compliance attorney (6 hours
at $373/hour).
6. While the proposed amendments would require funds to disclose that their proxy voting records both are available on fund websites
and will be delivered to investors upon request, the Form N-PX PRA estimates includes only the burdens associated with website
posting. Funds’ registration forms currently require them to disclose that they either make their proxy voting records available on
their websites or deliver them upon request. We understand most funds deliver proxy voting records upon request and, therefore, the
burdens of delivery upon request are already included in the information collection burdens of each relevant registration form.
7.
Represents the estimated hourly wage rate of a webmaster.
8. These estimates are conducted for each fund portfolio, not for each filing, and are an average estimate across all Form N-PX filers. In
certain cases, a single Form N-PX filing will report the proxy voting records of multiple fund portfolios. In those circumstances, the
filer would bear the burden associated with each fund portfolio it reported. This average estimate takes into account higher costs for
funds filing reports for multiple portfolios without assuming any economies of scale that multiple-portfolio fund complexes may be

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able to achieve.
Represents the blended estimated hourly wage rates of a programmer (5 hours at $277/hour) and a compliance attorney (5 hours
at $373/hour).
10. Represents the blended estimated hourly wage rates of a programmer (2 hours at $277/hour) and a compliance attorney (3 hours
at $373/hour).
11. Includes 7,550 initial filings and assumes an additional 194 filings as a result of the final adverse disposition of a request for
confidential treatment or upon expiration of confidential treatment.
9.

13.

Cost to Respondents

Cost burden is the cost of services purchased to prepare and update Form N-PX, such as
for the services of outside counsel. The cost burden does not include the cost of the hour burden
discussed in Item 12 above. Estimates are based on the Commission’s experience with the filing
of reporting forms.
As summarized in Table 1 above, the most recent PRA submission estimated that the
annual cost burden of Form N-PX is $1,000 in external costs per portfolio holding equity
securities that is paid to third-party service providers and $100 per fund-of-funds portfolio, or an
aggregate external cost burden of approximately $6.5 million.8
As summarized in Table 1 above, the Commission estimates the Proposal would result in
an annual external cost burden of $1,500 per portfolio holding equity securities, $200 per fundof-funds portfolio, and $1,000 per institutional investment manager. The Commission estimates
that the total aggregate annual external cost burden of Form N-PX would be $18.6 million.

14.

Cost to the Federal Government

The annual cost of reviewing and processing disclosure documents, including new
registration statements, post-effective amendments, proxy statements, shareholder reports, and
other filings of investment companies amounted to approximately $25.7 million in fiscal year

8

As explained below, the supporting statement associated with the most recent PRA submission
estimated an external cost burden of $6,539,600 but, due to an error in the most recent
submission, the approved cost burden is listed as $17,657,958. See infra footnote 10.

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2019, based on the Commission’s computation of the value of staff time devoted to this activity
and related overhead.
15.

Change in Burden

As summarized in Table 1 above, the Commission estimates that, if adopted, the hour
burden associated with Form N-PX would increase from 47,984 hours to 300,981 hours (an
increase of 252,997) hours. The changes in burden hours and cost estimates are due primarily to
the Commission’s estimates of the increased time burden that would result from the proposed
amendments to Form N-PX, the new website disclosure requirements, and the new requirement
that institutional investment managers file reports on Form N-PX. 9 The Commission also
estimates an increase in the external costs of Form N-PX from $17,657,958 to $18,613,400 (an
increase of $955,442). 10
TABLE 2: CHANGES IN ESTIMATED BURDEN
Annual Number of Responses

Form N-PX

Annual Time Burden (hours)

Annual Cost Burden (dollars)

Currently
Approved

Revised
Estimate

Change

Currently
Approved

Revised
Estimate

Change

Currently
Approved

Revised
Estimate

Change

11,890

19,363

7,473

47,984

300,981

252,997

$17.66M*

$18.61M

$0.96M

*See footnote 10.

9

In addition, a portion of the increase in estimated burden is due to the Commission using more
recent data to estimate the number of filers that would be affected, which would have changed
irrespective of the Proposal. If the more recent data had been available at the time the
Commission submitted its previous PRA estimates, it would have estimated that the annual
aggregate hours burden of Form N-PX was 52,770 hours (for an internal cost burden of $19.0
million) and the annual aggregate external costs burden was $7.2 million).

10

Due to an error in the most recent PRA submission for Form N-PX, the approved cost burden
(dollars) for Form N-PX reflects the estimated costs of the internal burden hours rather than the
external cost burden. Using the external cost burden discussed in the supporting statement
associated with that PRA submission (which was $6,539,600) would result in a larger cost burden
increase of $12,073,800. $18,613,400 - $6,539,600 = $12,073,800.

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16.

Information Collection Planned for Statistical Purposes

The results of any information collected will not be published.
17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to not display the expiration date for OMB
approval.
18.

Exceptions to Certification Statement for Paperwork Reduction Act
Submission

The Commission is not seeking an exception to the certification statement.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
The collection of information will not employ statistical methods.

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