On November 2, 2022 the Securities and Exchange Commission finalized the first of its market data rule proposals. The amendments to form N-PX bring greater detail, consistency, and usability to the proxy voting information reported by mutual funds. These changes came in response to investors, who have said for nearly twenty years that they would benefit from more readily usable information and more details. But, new disclosures about proxy voting versus securities lending may have funds and their lending agents reexamining their policies and priorities. 

In her March 29, 2016 keynote address before the Mutual Fund Directors Forum’s annual policy conference, SEC Chair Mary Jo White laid out some of her thoughts on the role of mutual fund directors in assessing risks and exercising their oversight responsibilities.  In addition, she highlighted recent changes in markets and regulation affecting the role of fund directors, as well as some of the potential challenges ahead. 

As a companion to the SEC’s recent proposed rules on the use of derivatives by registered investment companies, the SEC’s Office of Risk Analysis has published a white paper studying just how funds use derivatives.  Based on data from Forms N-CSR and N-SAR supplemented with information from Morningstar, the study’s authors assembled data on derivatives positions held by 10 percent of funds registered in 2014.  Because section 18 of the Investment Company Act restricts the ability of a fund to issue “senior securities,” the study focuses on those derivatives (and certain financial commitment transactions) that implicate section 18. These kinds of derivative positions can potentially present “senior security” issues because a fund that enters into these transactions is or may be required to make a payment or deliver cash or other assets during the life of the instrument or at maturity or early termination.