UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22328
Columbia Seligman Premium Technology Growth Fund, Inc.
(Exact name of registrant as specified in charter)
290 Congress Street, Boston, MA 02210
(Address of principal executive offices) (Zip code)
Daniel J. Beckman
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
Ryan C. Larrenaga, Esq.
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 345-6611
Date of fiscal year end: December 31
Date of reporting period: December 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Annual Report
December 31, 2023
Columbia Seligman Premium Technology Growth Fund, Inc.
Not FDIC or NCUA Insured • No Financial Institution Guaranteed • May Lose Value
Under the managed distribution policy of Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund) and subject to
the approval of the Fund’s Board of Directors (the Board), the Fund expects to make quarterly cash distributions (in February, May, August and November) to holders of common stock (Common Stockholders). The Fund’s most recent distribution under its managed distribution policy (paid on February 27, 2024) amounted to $0.4625 per share, which is equal to a quarterly rate of 1.4270% (5.71% annualized) of the Fund’s market price of $32.41 per share as of January 31, 2024. You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions or from the terms of the Fund’s managed distribution policy. Historically, the Fund has at times distributed more than its income and net realized capital gains, which has resulted in Fund distributions substantially consisting of return of capital or other capital source.
A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you.
A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. The Fund’s Board may determine in the future that the Fund’s managed distribution policy and the amount or timing of the distributions should not be continued in light of changes in the Fund’s portfolio holdings, market or other conditions or factors, including that the distribution rate under such policy may not be dependent upon the amount of the
Fund’s earned income or realized capital gains. The Board could also consider amending or terminating the current managed distribution policy because of potential adverse tax consequences associated with maintaining the policy. In certain situations, returns of capital could be taxable for federal income tax purposes, and all or a portion of the Fund’s capital loss carryforwards from prior years, if any, could effectively be forfeited. The Board may amend or terminate the Fund’s managed distribution policy at any time without prior notice to Fund stockholders; any such change or termination may have an adverse
effect on the market price of the Fund’s shares.
See Notes to Financial Statements for additional information related to the Fund’s managed distribution policy.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Letter to the Stockholders
(Unaudited)
Dear Stockholders,
We are pleased to present the annual stockholder report for Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund). The report includes the Fund’s investment results, a discussion with the Fund’s portfolio managers, portfolio of investments and financial statements as of December 31, 2023.
The Fund’s common shares (Common Stock) returned 38.89%, based on net asset value, and 47.19%, based on market price, for the 12 months ended December 31, 2023. In comparison, the Fund’s benchmark, the S&P North American Technology Sector Index, returned 61.13% for the same time period.
During 2023, the Fund paid four distributions in accordance with its managed distribution policy that aggregated to $1.85
per share of Common Stock of the Fund. On January 23, 2024, the Fund also paid a special fourth quarter distribution, beyond its typical quarterly managed distribution policy, in the amount of $0.2669 per share of Common Stock to stockholders of record on December 18, 2023.The Fund has exemptive relief from the Securities and Exchange Commission that permits the Fund to make periodic distributions of long-term capital gains more often than once in any one taxable year. Unless you elected otherwise, distributions were paid in additional shares of the Fund.
Information about the Fund, including daily pricing, current performance, Fund holdings, stockholder reports, distributions
and other information can be found at columbiathreadneedleus.com/investor/ under the Closed-End Funds tab.
On behalf of the Board, we would like to thank you for your continued support of Columbia Seligman Premium Technology Growth Fund, Inc.
Regards,
Pamela G. Carlton
Chair of the Board
For more information, go online to columbiathreadneedleus.com/investor/; or call American Stock Transfer & Trust Company, LLC, the Fund’s Stockholder Servicing Agent, at 866.666.1532. Customer Service Representatives are available to answer your questions Monday through Friday
from 8 a.m. to 8 p.m. Eastern time.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund) mails one stockholder report to each stockholder address. If you would like more than one report, please call shareholder services at 800.937.5449 and additional reports will
be sent to you.
Proxy voting policies and procedures
The policy of the Board is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures that can be found by visiting columbiathreadneedleus.com/investor/. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31 for the most recent 12-month period ending June
30 of that year, and is available without charge by visiting columbiathreadneedleus.com/investor/; or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year
on Form N-PORT. The Fund’s Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-PORT, can also be obtained without charge, upon request, by calling 800.937.5449.
Additional Fund information
For more information, go online to columbiathreadneedleus.com/investor/; or call Equiniti Trust Company, LLC (formerly, American Stock Transfer & Trust Company, LLC), the Fund’s Stockholder Servicing and Transfer Agent, at 866.666.1532. Customer Service Representatives are available to answer your questions Monday through Friday from 8 a.m. to 8 p.m. Eastern time.
Fund investment manager
Columbia Management Investment Advisers, LLC (the Investment Manager)
290 Congress Street
Boston, MA 02210
Fund transfer agent
Equinity Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fund at a Glance
(Unaudited)
Investment objective
The Fund seeks growth of capital and current income.
Portfolio management
Paul Wick
Lead Portfolio Manager
Managed Fund since 2009
Braj Agrawal
Co-Portfolio Manager
Managed Fund since 2010
Christopher Boova
Co-Portfolio Manager
Managed Fund since 2016
Jeetil Patel
Technology Team Member
Managed Fund since 2015
Vimal Patel
Technology Team Member
Managed Fund since 2018
Shekhar Pramanick
Technology Team Member
Managed Fund since 2018
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2024 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Average annual total returns (%) (for the period ended December 31, 2023)
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S&P North American Technology
Sector Index
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The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting columbiathreadneedleus.com/investor/.
Returns reflect changes in market price or net asset value, as applicable, and assume reinvestment of distributions. Returns do not reflect the deduction of taxes that investors may pay on distributions or the sale of shares.
The S&P North American Technology Sector Index is an unmanaged modified capitalization-weighted index based on a universe of technology-related stocks.
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Distributions Paid Per Common Share
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(a) The Fund paid this special 2022 fourth quarter distribution beyond its typical quarterly managed distribution policy to stockholders of record on December 12, 2022.
(b) The Fund paid this special 2023 fourth quarter distribution beyond its typical quarterly managed distribution policy to stockholders of record on December 18, 2023.
The net asset value of the Fund’s shares may not always correspond to the market price of such shares. Common stock of many closed-end funds frequently trade at a discount from their net asset value. The Fund is subject to stock market risk, which is the risk that stock prices overall will decline over short or long periods, adversely affecting the value of
an investment in the Fund.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
3
Fund at a Glance (continued)
(Unaudited)
Performance of a hypothetical $10,000 investment (December 31, 2013 — December 31, 2023)
The chart above shows the change in value of a hypothetical $10,000 investment in Columbia Seligman Premium Technology Growth
Fund, Inc. during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund distributions or on the sale of Fund shares.
Portfolio breakdown (%) (at December 31, 2023)
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Percentages indicated are based upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
Equity sector breakdown (%) (at December 31, 2023)
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Percentages indicated are based upon total equity investments. The Fund’s portfolio composition is subject to change.
Equity sub-industry breakdown (%) (at December 31, 2023)
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Electronic Equipment & Instruments
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Internet Services & Infrastructure
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Semiconductor Materials & Equipment
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Technology Hardware, Storage & Peripherals
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Percentages indicated are based upon total equity investments. The Fund’s portfolio composition is subject to change.
4
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Manager Discussion of Fund Performance
(Unaudited)
For the 12-month period that ended December 31, 2023, Columbia Seligman Premium Technology Growth Fund returned 47.19% based on market price and 38.89% based on net asset value. The Fund’s benchmark, the S&P North American Technology Sector Index, returned 61.13% for the same time period.
Market overview
The U.S. equity market overcame a number of potential obstacles to deliver a robust total return in 2023. In the first half
of the year, stocks moved higher on expectations that the U.S. Federal Reserve (Fed) was nearing the end of its policy tightening. During the summer, however, concerns about persistent inflation caused the consensus to shift toward the idea
that the central bank would need to keep rates “higher for longer.” Equities experienced a protracted downtrend in the August-October 2023 period as a result. The backdrop changed once again in the fourth quarter, thanks to a series of cooler-than-expected inflation reports and indications from Fed Chairman Jerome Powell that the central bank was likely finished raising rates and perhaps on a path to begin enacting rate cuts in 2024. These developments, together with a string
of favorable economic reports, fueled optimism that the economy was poised for a “soft landing.” Stocks surged in the final two months of the year in response, helping the headline large-cap indexes finish December near their all-time highs.
While the broader market performed well in 2023, much of the gain for much of the year was confined to a very narrow group
of mega-cap, technology-related stocks. Unabated enthusiasm for artificial intelligence (AI) was an especially hefty motivator
for exuberant investors.
The Fund’s notable detractors during the period
•
The Fund’s industrials sector holdings weighed on absolute performance during the period, as did the Fund’s small position within the health care sector.
•
Compared to the benchmark, security selection within the semiconductors industry detracted from relative results during the period.
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An underweight to, and selections within, the communication services sector also weighed on the Fund’s relative performance.
•
Holdings that detracted from the Fund’s absolute returns during the period included alternative fuel cell company Bloom Energy Corp., fintech solutions provider Fidelity National Information Services, Inc. and software design and consultancy
company Thoughtworks Holding, Inc. Thoughtworks is no longer held in the portfolio.
•
Underweighted holdings in chip maker NVIDIA Corp. and Facebook parent Meta Platforms, Inc. weighed on Fund performance relative to the benchmark.
The Fund’s notable contributors during the period
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On an absolute basis, the Fund delivered strong performance in 2023, driven by holdings in the semiconductors, software and technology hardware industries within the information technology sector.
•
Holdings within the communication services sector, particularly the interactive media industry, also contributed to absolute returns for the Fund during the period.
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Relative to the benchmark, contributions came from selections within communications equipment and technology hardware. An overweight to the financials sector also bolstered relative results, as did security selection within the sector.
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Holdings that contributed most to the Fund’s absolute performance during the period included semiconductor companies Lam Research Corp. and Broadcom, Inc., and consumer electronics giant Apple, Inc.
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Not owning digital communications company Cisco Systems, Inc., payments processing company Mastercard Inc. and semiconductor company Texas Instruments benefited the Fund’s results versus the benchmark.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
5
Manager Discussion of Fund Performance (continued)
(Unaudited)
Call options detracted from returns
Technology and technology-related stocks were among the best performing stocks in the market in 2023. In this type of environment, the Fund’s call option writing strategy detracted from returns.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly
from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim
any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia
fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia fund. References to
specific securities should not be construed as a recommendation or investment advice.
6
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fund Investment Objective, Strategies, Policies and Principal Risks
(Unaudited)
Fund Investment Objective
The Fund’s investment objective is to seek growth of capital and current income. The Fund’s investment objective is non-fundamental and may be changed by the Board without approval of the Fund’s stockholders.
Fund Investment Strategies and Policies
Under normal market conditions, the Fund invests at least 80% of its “Managed Assets” (as defined below) in a portfolio of equity securities of technology and technology-related companies that Columbia Management Investment Advisers, LLC (the Investment Manager) believes offer attractive opportunities for capital appreciation. Under normal market conditions, the
Fund’s investment program consists primarily of (i) investing in a portfolio of equity securities of technology and technology-related companies that seeks to exceed the total return, before fees and expenses, of the S&P North American Technology Sector Index and (ii) writing call options on the NASDAQ 100 Index®, an unmanaged index that includes the largest and most active non-financial domestic and international companies listed on the NASDAQ Stock Market, or its exchange-traded fund equivalent (the NASDAQ 100) on a month-to-month basis, with an aggregate notional amount typically ranging from 0%-90% of
the underlying value of the Fund’s holdings of common stock (the Rules-based Option Strategy, as further described below). The Fund expects to generate current income from premiums received from writing call options on the NASDAQ 100.
In determining the level (i.e., 0% to 90%) of call options to be written on the NASDAQ 100, the Investment Manager’s Rules-based Option Strategy is based on the CBOE NASDAQ-100 Volatility IndexSM (the VXN Index). The VXN Index measures the market’s expectation of 30-day volatility implicit in the prices of near-term NASDAQ 100 Index options. The VXN Index, which is quoted in percentage points (e.g., 19.36), is a leading barometer of investor sentiment and market volatility relating
to the NASDAQ 100 Index. In general, the Investment Manager intends to write more call options when market volatility, as
represented by the VXN Index, is high (and premiums received for writing the option are high) and write fewer call options
when market volatility, as represented by the VXN Index, is low (and premiums for writing the option are low).
The Fund’s Rules-based Option Strategy with respect to writing call options is as follows:
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Aggregate Notional Amount of
Written Call Options as a
Percentage of the Fund’s
Holdings in Common Stocks
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Greater than 17, but less than 18
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At least 18, but less than 33
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At least 33, but less than 34
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At least 34, but less than 55
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In addition to the Rules-based Option Strategy, the Fund may write additional calls with aggregate notional amounts of up
to 25% of the value of the Fund’s holdings in common stock (to a maximum of 90% when aggregated with the call options written pursuant to the Rules-based Option Strategy) when the Investment Manager believes call premiums are attractive relative to the risk of the price of the NASDAQ 100. The Fund may also close (or buy back) a written call option if the Investment Manager believes that a substantial amount of the premium (typically, 70% or more) to be received by the Fund has been captured before exercise, potentially reducing the call position to 0% of total equity until additional calls are
written. The Fund may also buy or write other call and put options on securities, indices, ETFs and market baskets of securities to
generate additional income or return or to provide the portfolio with downside protection.
The Fund’s investment policy of investing at least 80% of its Managed Assets in equity securities of technology and technology-related companies and its policy with respect to the use of the Rules-based Option Strategy on a month-to-month
basis may be changed by the Board without stockholder approval only following the provision of 60 days’ prior written notice to stockholders.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
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Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
The Fund is a non-diversified fund. A non-diversified fund is permitted to invest a greater percentage of its total assets
in fewer issuers than a diversified fund. This policy may not be changed without a stockholder vote.
The Fund has a fundamental policy of investing at least 25% of its total assets in securities principally engaged in technology
and technology-related stocks. This policy may not be changed without a stockholder vote.
The Fund may also invest: up to 15% of its Managed Assets in illiquid securities (i.e., securities that at the time of purchase
are not readily marketable); up to 20% of its Managed Assets in debt securities (including convertible and non-convertible
debt securities), such as debt securities issued by technology and technology-related companies and obligations of the U.S. Government, its agencies and instrumentalities, and government-sponsored enterprises, as well as below-investment grade securities (i.e., high-yield or junk bonds); and up to 25% of its Managed Assets in equity securities of companies organized outside of the United States. The Fund may hold foreign securities of issuers located or doing substantial business
in emerging markets. Each of these policies may be changed by the Board without stockholder approval.
The Fund has other fundamental policies that may not be changed without a stockholder vote. Under these policies, the Fund
may not:
• Purchase or sell commodities or commodity contracts, except to the extent permissible under applicable law and interpretations, as they may be amended from time to time, and except this shall not prevent the Fund from buying or selling
options, futures contracts and foreign currency or from entering into forward currency contracts or from investing in securities
or other instruments backed by, or whose value is derived from, physical commodities;
• Issue senior securities or borrow money, except as permitted by the Investment Company Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC;
• Make loans, except as permitted by the Investment Company Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC;
• Underwrite the securities of other issuers, except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933 in disposing of a portfolio security or in connection with investments in other investment companies;
• Buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged
in the real estate business or real estate investment trusts; and
• Invest 25% or more of its Managed Assets (as defined below), at market value, in the securities of issuers in any particular industry, except that the Fund will invest at least 25% of the value of its Managed Assets in technology and technology-related stocks (in which the Fund intends to concentrate) and may invest without limit in securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities, or government-sponsored enterprises.
“Managed Assets” means the net asset value of the Fund’s outstanding common stock plus any liquidation preference of any issued and outstanding Fund preferred stock and the principal amount of any borrowings used for leverage.
The Fund’s fundamental policies set forth above prohibit transactions “except as permitted by the Investment Company Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the
SEC.” The reference to the Investment Company Act, means the Investment Company Act of 1940, as amended, and the reference to the SEC means the Securities and Exchange Commission. The following discussion explains the flexibility that
the Fund gains from these exceptions.
Issuing senior securities — A “senior security” is an obligation with respect to the earnings or assets of a company that takes precedence over the claims of that company’s common stock with respect to the same earnings or assets. The Investment Company Act limits the ability of a closed-end fund to issue senior securities, but SEC staff interpretations allow
a fund to engage in certain types of transactions that otherwise might raise senior security concerns (such as short sales,
buying and selling financial futures contracts and selling put and call options), provided that the Fund maintains segregated
8
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
deposits or portfolio securities, or otherwise covers the transaction with offsetting portfolio securities, in amounts sufficient
to offset any liability associated with the transaction. The exception in the fundamental policy allows the Fund to operate
in reliance upon these staff interpretations.
Borrowing money — The Investment Company Act permits the Fund to borrow up to 33 1/3% of its Managed Assets, plus an additional 5% of its Managed Assets for temporary purposes.
Making loans — The Investment Company Act generally prohibits the Fund from making loans to affiliated persons but does not otherwise restrict the Fund’s ability to make loans.
Under the Investment Company Act, the Fund’s fundamental policies may not be changed without the approval of the holders of a “majority of the outstanding” common stock and, if issued, preferred stock voting together as a single class, and of the holders of a “majority of the outstanding” preferred stock voting as a separate class. When used with respect to particular shares of the Fund, a “majority of the outstanding” shares means the lesser of: (i) 67% or more of the shares present at a stockholder meeting, if the holders of more than 50% of the outstanding shares are present at the meeting or represented by
proxy, or (ii) more than 50% of the outstanding shares of the Fund.
Principal Risks
An investment in the Fund involves risks. In particular, investors should consider Market Risk, Information Technology Sector
Risk, and Derivatives Risk. Descriptions of these and other principal risks of investing in the Fund are provided below. There
is no assurance that the Fund will achieve its investment objective and you may lose money. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The
significance of any specific risk to an investment in the Fund will vary over time depending on the composition of the Fund’s portfolio, market conditions, and other factors. You should read all of the risk information below carefully, because any
one or more of these risks may result in losses to the Fund. See also the Fund’s "Significant Risks" in the Notes to Financial Statements section.
Active Management Risk. The Fund is actively managed and its performance therefore will reflect, in part, the ability of the portfolio managers to make investment decisions that seek to achieve the Fund’s investment objective. Due to its active management, the Fund could underperform its benchmark index and/or other funds with similar investment objectives and/or strategies.
Counterparty Risk. The risk exists that a counterparty to a transaction in a financial instrument held by the Fund or by a special purpose or structured vehicle in which the Fund invests may become insolvent or otherwise fail to perform its obligations, including making payments to the Fund, due to financial difficulties. The Fund may obtain no or limited recovery
in a bankruptcy or other reorganizational proceedings, and any recovery may be significantly delayed. Transactions that the Fund
enters into may involve counterparties in the financial services sector and, as a result, events affecting the financial services
sector may cause the Fund’s NAV to fluctuate.
Credit Risk. Credit risk is the risk that the value of debt instruments may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its financial obligations, such as making
payments to the Fund when due. Various factors could affect the actual or perceived willingness or ability of the issuer to
make timely interest or principal payments, including changes in the financial condition of the issuer or in general economic
conditions. Credit rating agencies, such as S&P Global Ratings, Moody’s, Fitch, DBRS and KBRA, assign credit ratings to certain debt instruments to indicate their credit risk. A rating downgrade by such agencies can negatively impact the value
of such instruments. Lower-rated or unrated instruments held by the Fund may present increased credit risk as compared to higher-rated instruments. Non-investment grade debt instruments may be subject to greater price fluctuations and are more
likely to experience a default than investment grade debt instruments and therefore may expose the Fund to increased credit
risk. If the Fund purchases unrated instruments, or if the ratings of instruments held by the Fund are lowered after purchase,
the Fund will depend on analysis of credit risk more heavily than usual.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
9
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
Derivatives Risk. Derivatives may involve significant risks. Derivatives are financial instruments, traded on an exchange or in the over-the-counter (OTC) markets, with a value in relation to, or derived from, the value of an underlying asset(s) (such
as a security, commodity or currency) or other reference, such as an index, rate or other economic indicator (each an underlying
reference). Derivatives may include those that are privately placed or otherwise exempt from SEC registration, including certain Rule 144A eligible securities. Derivatives could result in Fund losses if the underlying reference does not perform
as anticipated. Use of derivatives is a highly specialized activity that can involve investment techniques, risks, and tax planning
different from those associated with more traditional investment instruments. The Fund’s derivatives strategy may not be successful and use of certain derivatives could result in substantial, potentially unlimited, losses to the Fund regardless
of the Fund’s actual investment. A relatively small movement in the price, rate or other economic indicator associated with the underlying reference may result in substantial losses for the Fund. Derivatives may be more volatile than other types of investments. Derivatives can increase the Fund’s risk exposure to underlying references and their attendant risks, including the risk of an adverse credit event associated with the underlying reference (credit risk), the risk of an adverse movement
in the value, price or rate of the underlying reference (market risk), the risk of an adverse movement in the value of underlying
currencies (foreign currency risk) and the risk of an adverse movement in underlying interest rates (interest rate risk).
Derivatives may expose the Fund to additional risks, including the risk of loss due to a derivative position that is imperfectly
correlated with the underlying reference it is intended to hedge or replicate (correlation risk), the risk that a counterparty
will fail to perform as agreed (counterparty risk), the risk that a hedging strategy may fail to mitigate losses, and may offset
gains (hedging risk), the risk that the return on an investment may not keep pace with inflation (inflation risk), the risk that
losses may be greater than the amount invested (leverage risk), the risk that the Fund may be unable to sell an investment at an
advantageous time or price (liquidity risk), the risk that the investment may be difficult to value (pricing risk), and the
risk that the price or value of the investment fluctuates significantly over short periods of time (volatility risk). The value of derivatives
may be influenced by a variety of factors, including national and international political and economic developments. Potential
changes to the regulation of the derivatives markets may make derivatives more costly, may limit the market for derivatives,
or may otherwise adversely affect the value or performance of derivatives.
Derivatives Risk – Options Risk. Options are derivatives that give the purchaser the option to buy (call) or sell (put) an underlying reference from or to a counterparty at a specified price (the strike price) on or before an expiration date. The
Fund may purchase or write (i.e., sell) put and call options on an underlying reference it is otherwise permitted to invest in.
When writing options, the Fund is exposed to the risk that it may be required to buy or sell the underlying reference at a disadvantageous price on or before the expiration date. If the Fund sells a put option, the Fund may be required to buy the
underlying reference at a strike price that is above market price, resulting in a loss. If the Fund sells a call option, the
Fund may be required to sell the underlying reference at a strike price that is below market price, resulting in a loss. If the
Fund sells a call option that is not covered (it does not own the underlying reference), the Fund’s losses are potentially unlimited. Options may involve economic leverage, which could result in greater volatility in price movement. Options may be traded on
a securities exchange or in the over-the-counter market. At or prior to maturity of an options contract, the Fund may enter
into an offsetting contract and may incur a loss to the extent there has been adverse movement in options prices. Options can increase the Fund’s risk exposure to underlying references and their attendant risks such as credit risk, market risk, foreign currency risk and interest rate risk, while also exposing the Fund to correlation risk, counterparty risk, hedging risk, inflation
risk, leverage risk, liquidity risk, pricing risk and volatility risk.
Emerging Market Securities Risk. Securities issued by foreign governments or companies in emerging market countries, such as China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin America or Africa, are more likely
to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition,
emerging market countries are more likely to experience instability resulting, for example, from rapid changes or developments in social, political, economic or other conditions. Their economies are usually less mature and their securities markets
are typically less developed with more limited trading activity (i.e., lower trading volumes and less liquidity) than more
developed countries. Emerging market securities tend to be more volatile, and may be more susceptible to market manipulation, than securities in more developed markets. Many emerging market countries are heavily dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and economic downturns in other countries. Some emerging market countries have a higher risk of currency devaluations, and some of these countries may experience periods of high inflation or rapid changes in inflation rates and may have hostile
10
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
relations with other countries. Due to the differences in the nature and quality of financial information of issuers of emerging
market securities, including auditing and financial reporting standards, financial information and disclosures about such
issuers may be unavailable or, if made available, may be considerably less reliable than publicly available information about
other foreign securities.
Foreign Securities Risk. Investments in or exposure to securities of foreign companies may involve heightened risks relative to investments in or exposure to securities of U.S. companies. For example, foreign markets can be extremely volatile. Foreign securities may also be less liquid, making them more difficult to trade, than securities of U.S. companies so that
the Fund may, at times, be unable to sell foreign securities at desirable times or prices. Brokerage commissions, custodial costs
and other fees are also generally higher for foreign securities. The Fund may have limited or no legal recourse in the event
of default with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign governments may impose withholding or other taxes on the Fund’s income, capital gains or proceeds from the disposition of foreign securities, which could reduce the Fund’s return on such securities. In some cases, such withholding or other taxes could potentially be confiscatory. Other risks include: possible delays in the settlement of transactions or in the payment
of income; generally less publicly available information about foreign companies; the impact of economic, political, social,
diplomatic or other conditions or events (including, for example, military confrontations and actions, war, other conflicts,
terrorism and disease/virus outbreaks and epidemics), possible seizure, expropriation or nationalization of a company or its
assets or the assets of a particular investor or category of investors; accounting, auditing and financial reporting standards
that may be less comprehensive and stringent than those applicable to domestic companies; the imposition of economic and other sanctions against a particular foreign country, its nationals or industries or businesses within the country; and the
generally less stringent standard of care to which local agents may be held in the local markets. In addition, it may be difficult
to obtain reliable information about the securities and business operations of certain foreign issuers. Governments or trade
groups may compel local agents to hold securities in designated depositories that are not subject to independent evaluation.
The less developed a country’s securities market is, the greater the level of risks. Economic sanctions may be, and have been, imposed against certain countries, organizations, companies, entities and/or individuals. Economic sanctions and other similar governmental actions could, among other things, effectively restrict or eliminate the Fund’s ability to purchase or sell securities, and thus may make the Fund’s investments in such securities less liquid or more difficult to value. In addition, as a result of economic sanctions, the Fund may be forced to sell or otherwise dispose of investments at inopportune times
or prices, which could result in losses to the Fund and increased transaction costs. These conditions may be in place for
a substantial period of time and enacted with limited advance notice to the Fund. The risks posed by sanctions against a particular foreign country, its nationals or industries or businesses within the country may be heightened to the extent the
Fund invests significantly in the affected country or region or in issuers from the affected country that depend on global
markets. Additionally, investments in certain countries may subject the Fund to a number of tax rules, the application of
which may be uncertain. Countries may amend or revise their existing tax laws, regulations and/or procedures in the future,
possibly with retroactive effect. Changes in or uncertainties regarding the laws, regulations or procedures of a country could
reduce the after-tax profits of the Fund, directly or indirectly, including by reducing the after-tax profits of companies
located in such countries in which the Fund invests, or result in unexpected tax liabilities for the Fund. The performance of the Fund
may also be negatively affected by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly to the extent the Fund invests a significant percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over
short or long periods of time for a number of reasons, including changes in interest rates, imposition of currency exchange controls
and economic or political developments in the U.S. or abroad. The Fund may also incur currency conversion costs when converting foreign currencies into U.S. dollars and vice versa.
High-Yield Investments Risk. Securities and other debt instruments held by the Fund that are rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated debt instruments of comparable quality tend to be more sensitive to credit risk than higher-rated debt instruments and may experience greater price fluctuations in response to perceived changes in the ability of the issuing entity or obligor to pay interest and principal when due than to changes in interest
rates. These investments are generally more likely to experience a default than higher-rated debt instruments. High-yield debt instruments are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. These debt instruments typically pay a premium – a higher interest rate or yield – because of the increased risk of
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
11
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
loss, including default. High-yield debt instruments may require a greater degree of judgment to establish a price, may be
difficult to sell at the time and price the Fund desires, may carry high transaction costs, and also are generally less liquid
than higher-rated debt instruments. The ratings provided by third party rating agencies are based on analyses by these ratings agencies of the credit quality of the debt instruments and may not take into account every risk related to whether
interest or principal will be timely repaid. In adverse economic and other circumstances, issuers of lower-rated debt instruments are more likely to have difficulty making principal and interest payments than issuers of higher-rated debt instruments.
Interest Rate Risk. Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise.
Changes in the value of a debt instrument usually will not affect the amount of income the Fund receives from it but will generally
affect the value of your investment in the Fund. Changes in interest rates may also affect the liquidity of the Fund’s investments in debt instruments. In general, the longer the maturity or duration of a debt instrument, the greater its sensitivity to changes
in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk (the risk that the Fund will have to reinvest the money received in securities that have lower yields). The
Fund is subject to the risk that the income generated by its investments may not keep pace with inflation. Actions by governments
and central banking authorities can result in increases or decreases in interest rates. Higher periods of inflation could
lead such authorities to raise interest rates. Such actions may negatively affect the value of debt instruments held by the Fund,
resulting in a negative impact on the Fund’s performance and NAV. Any interest rate increases could cause the value of the Fund’s investments in debt instruments to decrease.
Issuer Risk. An issuer in which the Fund invests or to which it has exposure may perform poorly or below expectations and the value of its securities may therefore decline, which may negatively affect the Fund’s performance. Underperformance of an issuer may be caused by poor management decisions, competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters, military confrontations and actions, war, other conflicts, terrorism, disease/virus outbreaks, epidemics or other events, conditions
and factors which may impair the value of your investment in the Fund and could result in a greater premium or discount between the market price and the NAV of the Fund’s shares and wider bid/ask spreads than those experienced by other closed-end funds.
Small- and Mid-Cap Stock Risk. Securities of small- and mid-cap companies can, in certain circumstances, have a higher potential for gains than securities of larger companies but are more likely to have more risk than larger companies. For example, small- and mid-cap companies may be more vulnerable to market downturns and adverse business or economic events than larger companies because they may have more limited financial resources and business operations. Small- and mid-cap companies are also more likely than larger companies to have more limited product lines and operating histories and
to depend on smaller and generally less experienced management teams. Securities of small- and mid-cap companies may trade less frequently and in smaller volumes and may be less liquid and fluctuate more sharply in value than securities of
larger companies. When the Fund takes significant positions in small- and mid-cap companies with limited trading volumes,
the liquidation of those positions, particularly in a distressed market, could be prolonged and result in Fund investment
losses that would affect the value of your investment in the Fund. In addition, some small- and mid-cap companies may not
be widely followed by the investment community, which can lower the demand for their stocks.
Large-Cap Stock Risk. Investments in larger, more established companies (larger companies), may involve certain risks associated with their larger size. For instance, larger companies may be less able to respond quickly to new competitive challenges, such as changes in consumer tastes or innovation from smaller competitors. Also, larger companies are sometimes less able to achieve as high growth rates as successful smaller companies, especially during extended periods of
economic expansion.
Leverage Risk. Leverage occurs when the Fund increases its assets available for investment using borrowings, derivatives, or similar instruments or techniques. Use of leverage can produce volatility and may exaggerate changes in the Fund’s NAV and in the return on the Fund’s portfolio, which may increase the risk that the Fund will lose more than it has invested. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its
12
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
obligations or to meet any applicable regulatory limits. Futures contracts, options, forward contracts and other derivatives
can allow the Fund to obtain large investment exposures in return for meeting relatively small margin requirements. As a result,
investments in those transactions may be highly leveraged. If the Fund uses leverage, through the purchase of particular instruments such as derivatives, the Fund may experience capital losses that exceed the net assets of the Fund. Leverage presents the opportunity for increased net income and capital gains, but may also exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
Market Risk. The Fund may incur losses due to declines in the value of one or more securities in which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things, political, regulatory,
market, economic or social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets
and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely
affect the Fund’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause operational challenges. Global economies and financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These
risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events such as terrorism,
war, other conflicts, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions,
depressions or other events – or the potential for such events – could have a significant negative impact on global economic and market conditions.
The large-scale invasion of Ukraine by Russia in February 2022 has resulted in sanctions and market disruptions, including
declines in regional and global stock markets, unusual volatility in global commodity markets and significant devaluations
of Russian currency. The extent and duration of the military action are impossible to predict but could continue to be significant.
Market disruption caused by the Russian military action, and any counter measures or responses thereto (including international sanctions, a downgrade in a country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and espionage) could continue to have severe adverse impacts on regional and/or global securities and commodities markets, including markets for oil and natural gas. These impacts may
include reduced market liquidity, distress in credit markets, further disruption of global supply chains, increased risk of
inflation, and limited access to investments in certain international markets and/or issuers. These developments and other
related events could negatively impact Fund performance.
Non-Diversified Fund Risk. The Fund is non-diversified, which generally means that it may invest a greater percentage of its total assets in the securities of fewer issuers than a “diversified” fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of the Fund more than it would affect that of a diversified
fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of a more diversified fund.
Rule 144A and Other Exempted Securities Risk. The Fund may invest in privately placed and other securities or instruments exempt from SEC registration (collectively “private placements”), subject to certain regulatory restrictions. In the U.S. market, private placements are typically sold only to qualified institutional buyers, or qualified purchasers, as applicable. An insufficient number of buyers interested in purchasing private placements at a particular time could adversely affect the
marketability of such investments and the Fund might be unable to dispose of them promptly or at reasonable prices, subjecting the Fund to liquidity risk (the risk that it may not be possible for the Fund to liquidate the instrument at an
advantageous time or price). The Fund’s holdings of private placements may increase the level of Fund illiquidity if eligible buyers are unable or unwilling to purchase them at a particular time. The Fund may also have to bear the expense of registering the securities for resale and the risk of substantial delays in effecting the registration. Additionally, the
purchase price and subsequent valuation of private placements typically reflect a discount, which may be significant, from the market
price of comparable securities for which a more liquid market exists. Issuers of Rule 144A eligible securities are required
to furnish information to potential investors upon request. However, the required disclosure is much less extensive than that
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
13
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
required of public companies and is not publicly available since the offering information is not filed with the SEC. Further,
issuers of Rule 144A eligible securities can require recipients of the offering information (such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security.
Sector Risk. At times, the Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within one or more economic sectors, including the information technology sector.
Companies in the same sector may be similarly affected by economic, regulatory, political or market events or conditions,
which may make the Fund vulnerable to unfavorable developments in that group of industries or economic sector.
Information Technology Sector. The Fund may be vulnerable to the particular risks that may affect companies in the information technology sector. Companies in the information technology sector are subject to certain risks, including the
risk that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. Performance of such companies may be affected by factors including obtaining and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing of their products or services, new market
entrants, competition for market share and short product cycles due to an accelerated rate of technological developments.
Such competitive pressures may lead to limited earnings and/or falling profit margins. As a result, the value of their securities may fall or fail to rise. In addition, many information technology sector companies have limited operating histories
and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term. Some companies in the information technology sector are facing increased government and regulatory scrutiny and may
be subject to adverse government or regulatory action, which could negatively impact the value of their securities.
Semiconductor and Semiconductor Equipment Industry Risk. The Fund will concentrate (have at least 25% of its assets) in companies in the semiconductor and semiconductor equipment industry as categorized by GICS®. Companies in the same or related industries may be similarly affected by economic, regulatory, political or market events or conditions, which may
make the Fund more vulnerable to unfavorable developments than funds that invest more broadly. Generally, the more broadly a fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
The Fund is sensitive to, and its performance may depend to a greater extent on, the overall condition of the semiconductor
and semiconductor equipment industry. The risks of investments in the industry include: intense competition, both domestically and internationally, including competition from subsidized foreign competitors with lower production costs; wide
fluctuations in securities prices due to risks of rapid obsolescence of products and related technology; economic performance of the customers of semiconductor and related companies; their research costs and the risks that their products may not prove commercially successful; and thin capitalization and limited product lines, markets, financial resources or quality management and personnel. Semiconductor design and process methodologies are subject to rapid technological change requiring large expenditures, potentially requiring financing that may be difficult or impossible to
obtain, for research and development in order to improve product performance and increase manufacturing yields. These companies rely on a combination of patents, trade secret laws and contractual provisions to protect their technologies. The process
of seeking patent protection can be long and expensive. The industry is characterized by frequent litigation regarding patent
and other intellectual property rights, which may require such companies to defend against competitors’ assertions of intellectual property infringement or misappropriation. Some companies are also engaged in other lines of business unrelated to the semiconductor business, and these companies may experience problems with these lines of business that could adversely affect their operating results. The international operations of many companies expose them to the risks associated with instability and changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations,
tariffs, and trade disputes. Business conditions in this industry can change rapidly from periods of strong demand to periods
of weak demand. Any future downturn in the industry could harm the business and operating results of these companies. The
stock prices of companies in the industry have been and will likely continue to be volatile relative to the overall market.
The industry may also be affected by risks that affect the broader technology sector, including: government regulation, dramatic and often unpredictable changes in growth rates and competition for qualified personnel, a small number of companies representing a large portion of the technology semiconductor industry as a whole, cyclical market patterns,
14
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
significant product price erosion hampering company profits, periods of over-capacity and production shortages, changing demand, variations in manufacturing costs and yields and significant expenditures for capital equipment and product development.
Transactions in Derivatives. The Fund may enter into derivative transactions or otherwise have exposure to derivative transactions through underlying investments. Derivatives are financial contracts whose values are, for example, based on (or
“derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as the Secured Overnight Financing Rate (commonly known as SOFR)) or market indices (such as the Standard & Poor’s 500® Index). The use of derivatives is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Derivatives involve special risks
and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose more money than it would have lost had
it invested in the underlying security or other asset directly. The values of derivatives may move in unexpected ways, especially
in unusual market conditions, and may result in increased volatility in the value of the derivative and/or the Fund’s shares, among other consequences. The use of derivatives may also increase the amount of taxes payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not traded on an exchange) may be illiquid,
and transactions in derivatives traded in the over-the-counter market are subject to the risk that the other party will not
meet its obligations. The use of derivatives also involves the risks of mispricing or improper valuation and that changes in the
value of the derivative may not correlate perfectly with the underlying security, asset, reference rate or index. The Fund
also may not be able to find a suitable derivative transaction counterparty, and thus may be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. U.S. federal legislation has been enacted that provides for
new clearing, margin, reporting and registration requirements for participants in the derivatives market. These changes could
restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. The U.S. government and the European Union (and some other jurisdictions) have enacted regulations and similar requirements that prescribe clearing, margin, reporting and registration requirements for participants in the derivatives market. These requirements are evolving and their ultimate impact on the Fund remains unclear, but such impact could include restricting
and/or imposing significant costs or other burdens upon the Fund’s participation in derivatives transactions. Additionally, in August 2022, regulations governing the use of derivatives by registered investment companies, such as the Fund, became effective. Rule 18f-4 under the 1940 Act, among other things, requires a fund that invests in derivative instruments beyond
a specified limited amount to apply a value-at-risk-based limit to its portfolio and establish a comprehensive derivatives risk
management program. As of the date of this report, the Fund is required to maintain a comprehensive derivatives risk management program under Rule 18f-4, which could have an adverse impact on the Fund’s performance and ability to implement its investment strategies as it has historically.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
15
Fees and Expenses and Share Price Data
(Unaudited)
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund’s Common Stock. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
Stockholder Transaction Expenses
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Annual Expenses (as a percentage of net assets attributable to common shares)
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Acquired fund fees and expenses
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(a)
There are no service or brokerage charges to participants in the dividend investment plan; however, the Fund reserves the
right to amend the plan to include a service charge payable to the Fund by the participants. The Fund reserves the right to amend the plan to provide for payment of brokerage
fees by the plan participants in the event the plan is changed to provide for open market purchases of Fund Common Stock on behalf of plan participants.
(b)
The Fund’s management fee is 1.06% of the Fund’s average daily Managed Assets (which means the net asset value of Fund’s outstanding common stock plus the liquidation preference of any issued and outstanding preferred stock of the Fund and the principal amount of any borrowing used for leverage).
The management fee rate noted in the table reflects the rate paid by Common Stockholders as a percentage of the Fund’s net assets attributable to Common Stock.
(c)
“Total Annual Expenses" include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total gross expenses” shown in the Financial Highlights section of this report because “Total gross expenses” does not include acquired fund fees and expenses.
Example
The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other
funds. The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes
that:
• you invest $1,000 in the Fund for the periods indicated,
• your investment has a 5% return each year, and
• the Fund’s total annual operating expenses remain the same as shown in the Annual Fund Operating Expenses table above.
Although your actual costs may be higher or lower, based on the assumptions listed above, your costs would be:
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Columbia Seligman Premium Technology Growth Fund, Inc. Common Stock
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The purpose of the tables above is to assist you in understanding the various costs and expenses you will bear directly or
indirectly.
Share Price Data
The Fund’s Common Stock is traded primarily on the New York Stock Exchange (the Exchange). The following table shows the high and low closing prices of the Fund’s Common Stock on the Exchange for each calendar quarter since the beginning of 2022, as well as the net asset values and the range of the percentage (discounts)/premiums to net asset value per share that correspond to such prices.
16
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Fees and Expenses and Share Price Data (continued)
(Unaudited)
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Corresponding (Discount)/Premium to NAV (%)
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The Fund’s Common Stock has historically fluctuated between trading on the market at a discount to net asset value and at a premium to net asset value. The closing market price, net asset value and percentage (discount)/premium to net asset value
per share of the Fund’s Common Stock on December 31, 2023 were $31.60, $29.05, and 8.78%, respectively.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
17
Portfolio of Investments
December 31, 2023
(Percentages represent value of investments compared to net assets)
Investments in securities
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Communication Services 10.8%
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Interactive Media & Services 8.3%
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Alphabet, Inc., Class A(a),(b)
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Alphabet, Inc., Class C(a)
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Meta Platforms, Inc., Class A(a)
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Pinterest, Inc., Class A(a)
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Movies & Entertainment 0.5%
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Warner Bros Discovery, Inc.(a)
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Wireless Telecommunication Services 0.9%
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Total Communication Services
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Consumer Discretionary 1.8%
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Total Consumer Discretionary
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Transaction & Payment Processing Services 6.2%
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Eiger BioPharmaceuticals, Inc.(a)
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Heavy Electrical Equipment 2.7%
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Bloom Energy Corp., Class A(a)
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Common Stocks (continued)
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Human Resource & Employment Services 0.2%
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HireRight Holdings Corp.(a)
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Information Technology 73.8%
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Application Software 8.0%
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Dropbox, Inc., Class A(a)
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RingCentral, Inc., Class A(a)
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Communications Equipment 3.4%
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Lumentum Holdings, Inc.(a)
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Electronic Equipment & Instruments 1.5%
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Advanced Energy Industries, Inc.
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Internet Services & Infrastructure 2.7%
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GoDaddy, Inc., Class A(a),(b)
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Semiconductor Materials & Equipment 13.0%
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Applied Materials, Inc.(b)
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Microchip Technology, Inc.
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ON Semiconductor Corp.(a)
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The accompanying Notes to Financial Statements are an integral part of this statement.
18
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Portfolio of Investments (continued)
December 31, 2023
Common Stocks (continued)
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Renesas Electronics Corp.(a)
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SMART Global Holdings, Inc.(a)
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Palo Alto Networks, Inc.(a)
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Tenable Holdings, Inc.(a)
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|
Technology Hardware, Storage & Peripherals 9.9%
|
|
|
|
|
Dell Technologies, Inc.(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Information Technology
|
|
Common Stocks (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks
(Cost: $236,932,088)
|
|
|
|
|
|
|
|
|
|
Columbia Short-Term Cash Fund, 5.569%(c),(d)
|
|
|
Total Money Market Funds
(Cost: $17,078,562)
|
|
Total Investments in Securities
(Cost $254,010,650)
|
|
Other Assets & Liabilities, Net
|
|
|
|
|
|
At December 31, 2023, securities and/or cash totaling $141,033,569 were pledged as collateral.
Investments in derivatives
Call option contracts written
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Portfolio of Investments
|
|
Non-income producing investment.
|
|
|
This security or a portion of this security has been pledged as collateral in connection with derivative contracts.
|
|
|
The rate shown is the seven-day current annualized yield at December 31, 2023.
|
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
19
Portfolio of Investments (continued)
December 31, 2023
Notes to Portfolio of Investments (continued)
|
|
As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. The value of the holdings and transactions in these
affiliated companies during the year ended December 31, 2023 are as follows:
|
|
|
|
|
|
Net change in
unrealized
appreciation
(depreciation)($)
|
|
|
|
|
Columbia Short-Term Cash Fund, 5.569%
|
|
|
|
|
|
|
|
|
|
|
Currency Legend
Fair value measurements
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable
inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants
would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that
level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value
may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
■
Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments.
■
Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
■
Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics,
and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such
as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Investment Manager, along
with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Foreign equity securities actively traded in markets where there is a significant delay in the local close relative to the
New York Stock Exchange are classified as Level 2. The values of these securities may include an adjustment to reflect the impact of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating
in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable
inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances,
discount rates and estimated cash flows, and comparable company data.
The Fund’s Board of Directors (the Board) has designated the Investment Manager, through its Valuation Committee (the Committee), as valuation designee, responsible for determining the fair value of the assets of the Fund for which market quotations are not readily available using valuation
procedures approved by the Board. The Committee consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which may include a description of specific
valuation determinations, data regarding pricing information received from approved pricing vendors and brokers and the results of Board-approved valuation policies and procedures (the
Policies). The Policies address, among other things, instances when market quotations are or are not readily available, including recommendations of third party pricing vendors
and a determination of appropriate pricing methodologies; events that require specific valuation determinations and assessment of fair value techniques; securities with a potential
for stale pricing, including those that are illiquid, restricted, or in default; and the effectiveness of third party pricing vendors, including periodic reviews of vendors. The Committee meets
more frequently, as needed, to discuss additional valuation matters, which may include the need to review back-testing results, review time-sensitive information or approve related valuation
actions. Representatives of Columbia Management Investment Advisers, LLC report to the Board at each of its regularly scheduled meetings to discuss valuation matters and
actions during the period, similar to those described earlier.
The accompanying Notes to Financial Statements are an integral part of this statement.
20
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Portfolio of Investments (continued)
December 31, 2023
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at December 31, 2023:
|
|
|
|
|
|
Investments in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in Securities
|
|
|
|
|
Investments in Derivatives
|
|
|
|
|
|
|
|
|
|
|
Call Option Contracts Written
|
|
|
|
|
|
|
|
|
|
|
See the Portfolio of Investments for all investment classifications not indicated in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets include certain foreign securities for
which a third party statistical pricing service may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
21
Statement of Assets and Liabilities
December 31, 2023
|
|
|
Investments in securities, at value
|
|
Unaffiliated issuers (cost $236,932,088)
|
|
Affiliated issuers (cost $17,078,562)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option contracts written, at value (premiums received $557,496)
|
|
|
|
|
|
|
|
Distributions to shareholders
|
|
|
|
|
Stockholder servicing and transfer agent fees
|
|
Stockholders’ meeting fees
|
|
Compensation of chief compliance officer
|
|
Compensation of board members
|
|
|
|
|
Deferred compensation of board members
|
|
|
|
|
Net assets applicable to outstanding Common Stock
|
|
|
|
|
|
|
|
Total distributable earnings (loss)
|
|
Total - representing net assets applicable to outstanding Common Stock
|
|
Shares outstanding applicable to Common Stock
|
|
Net asset value per share of outstanding Common Stock
|
|
Market price per share of Common Stock
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
22
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Statement of Operations
Year Ended December 31, 2023
|
|
|
|
|
|
Dividends — unaffiliated issuers
|
|
Dividends — affiliated issuers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder servicing and transfer agent fees
|
|
|
|
|
Printing and postage fees
|
|
Stockholders’ meeting fees
|
|
|
|
|
|
|
|
Compensation of chief compliance officer
|
|
Compensation of board members
|
|
Deferred compensation of board members
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain (loss) — net
|
|
Net realized gain (loss) on:
|
|
Investments — unaffiliated issuers
|
|
Investments — affiliated issuers
|
|
Foreign currency translations
|
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on:
|
|
Investments — unaffiliated issuers
|
|
Investments — affiliated issuers
|
|
Foreign currency translations
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
Net realized and unrealized gain
|
|
Net increase in net assets resulting from operations
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
23
Statement of Changes in Net Assets
|
|
Year Ended
December 31, 2023
|
Year Ended
December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
Distributions to stockholders
|
|
|
Net investment income and net realized gains
|
|
|
Total distributions to stockholders
|
|
|
Increase in net assets from capital stock activity
|
|
|
Total increase (decrease) in net assets
|
|
|
Net assets at beginning of year
|
|
|
Net assets at end of year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock issued at market price in distributions
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
24
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
25
The Fund’s financial highlights are presented below. Per share operating performance data is designed to allow investors to trace the operating performance, on a per Common Stock share basis, from the beginning net asset value to the ending net asset value, so that investors can understand what effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by converting the actual dollar amounts incurred for each item, as disclosed in the financial statements, to their equivalent per Common Stock share amounts, using average Common Stock shares outstanding during the period.
Total return measures the Fund’s performance assuming that investors purchased Fund shares at market price or net asset value as of the beginning of the period, reinvested all their distributions, and then sold their shares at the closing market
price or net asset value on the last day of the period. The computations do not reflect taxes or any sales commissions investors may incur on distributions or on the sale of Fund shares. Total returns and portfolio turnover are not annualized
for periods of less than one year. The ratios of expenses and net investment income are annualized for periods of less than one
year. The portfolio turnover rate is calculated without regard to purchase and sales transactions of short-term instruments
and certain derivatives, if any. If such transactions were included, a Fund’s portfolio turnover rate may be higher.
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
|
|
Income from investment operations:
|
Net investment income (loss)
|
|
|
|
Net realized and unrealized gain (loss)
|
|
|
|
Total from investment operations
|
|
|
|
Less distributions to Stockholders from:
|
|
|
|
|
|
|
|
|
|
|
Total distributions to Stockholders
|
|
|
|
(Dilution) Anti-dilution in net asset value from share purchases (via dividend reinvestment program)(a)
|
|
|
|
Anti-dilution in net asset value from share buy-backs (via stock repurchase program)(a)
|
|
|
|
Net asset value, end of period
|
|
|
|
Market price, end of period
|
|
|
|
|
|
Based upon net asset value
|
|
|
|
|
|
|
|
|
Ratios to average net assets
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
|
|
|
|
|
|
|
|
Notes to Financial Highlights
|
|
|
Prior to the period ended December 31, 2022, per share amounts were only presented if the net dilution/anti-dilution impact was material relative to the Fund’s average net assets for Common Stock.
|
|
|
|
|
|
In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees
and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios.
|
The accompanying Notes to Financial Statements are an integral part of this statement.
26
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Financial Highlights (continued)
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
27
Notes to Financial Statements
December 31, 2023
Note 1. Organization
Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund) is a non-diversified fund. The Fund is registered under
the Investment Company Act of 1940, as amended (the 1940 Act), as a closed-end management investment company.
The Fund was incorporated under the laws of the State of Maryland on September 3, 2009, and commenced investment operations on November 30, 2009. The Fund had no investment operations prior to November 30, 2009 other than those relating to organizational matters and the sale to Columbia Management Investment Advisers, LLC (the Investment Manager),
a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial), of 5,250 shares of Common Stock at a cost
of $100,275 on October 14, 2009. As of December 31, 2009, the Fund issued 14,300,000 shares of Common Stock, including 13,100,000 shares of Common Stock in its initial public offering and 1,200,000 shares of Common Stock purchased by the Fund’s underwriters pursuant to an over-allotment option granted to the underwriters in connection with the initial public offering. On January 13, 2010, the Fund’s underwriters purchased an additional 545,000 shares of Common Stock pursuant to the over-allotment option, resulting in a total of 14,845,000 shares of Common Stock issued by the Fund in its initial
public offering, including shares purchased by the underwriters pursuant to the over-allotment option. With the closing of
this additional purchase of Common Stock, the Fund’s total raise-up in its initial public offering was an aggregate of $296.9 million. The Fund has one billion authorized shares of Common Stock. The issued and outstanding Common Stock trades on the New York Stock Exchange under the symbol “STK”.
The Fund currently has outstanding Common Stock. Each outstanding share of Common Stock entitles the holder thereof to one vote on all matters submitted to a vote of the Common Stockholders, including the election of directors. Because the Fund has no other classes or series of stock outstanding, Common Stock possesses exclusive voting power. All of the Fund’s shares of Common Stock have equal dividend, liquidation, voting and other rights. The Fund’s Common Stockholders have no preference, conversion, redemption, exchange, sinking fund, or appraisal rights and have no preemptive rights to subscribe for any of the Fund’s securities.
Although the Fund has no current intention to do so, the Fund is authorized and reserves the flexibility to use leverage to
increase its investments or for other management activities through the issuance of Preferred Stock and/or borrowings. The
costs of issuing Preferred Stock and/or a borrowing program would be borne by Common Stockholders and consequently would result in a reduction of net asset value of Common Stock.
Note 2. Summary of significant accounting policies
Basis of preparation
The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income
and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security valuation
Equity securities listed on an exchange are valued at the closing price or last trade price on their primary exchange at the
close of business of the New York Stock Exchange. Securities with a closing price not readily available or not listed on any
exchange are valued at the mean between the closing bid and ask prices. Listed preferred stocks convertible into common stocks are valued using an evaluated price from a pricing service.
Foreign equity securities are valued based on the closing price or last trade price on their primary exchange at the close
of business of the New York Stock Exchange. If any foreign equity security closing prices are not readily available, the securities
are valued at the mean of the latest quoted bid and ask prices on such exchanges or markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange. Many securities markets and
28
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
exchanges outside the U.S. close prior to the close of the New York Stock Exchange; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close
of the New York Stock Exchange. In those situations, foreign securities will be fair valued pursuant to a policy approved
by the Board of Directors. Under the policy, the Fund may utilize a third-party pricing service to determine these fair values.
The third-party pricing service takes into account multiple factors, including, but not limited to, movements in the U.S. securities
markets, certain depositary receipts, futures contracts and foreign exchange rates that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security is likely to be different from the
quoted or published price, if available.
Investments in open-end investment companies (other than exchange-traded funds (ETFs)), are valued at the latest net asset
value reported by those companies as of the valuation time.
Option contracts are valued at the mean of the latest quoted bid and ask prices on their primary exchanges. Option contracts, including over-the-counter option contracts, with no readily available market quotations are valued using mid-market evaluations from independent third-party vendors.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reflective of market value or reliable, are valued at fair value as determined in good faith under procedures approved
by the Board of Directors. If a security or class of securities (such as foreign securities) is valued at fair value, such value
is likely to be different from the quoted or published price for the security, if available.
The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. This information is disclosed
following the Fund’s Portfolio of Investments.
Foreign currency transactions and translations
The values of all assets and liabilities denominated in foreign currencies are generally translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange. Net realized and unrealized gains
(losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange
rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign
currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due
to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations
are included with the net realized and unrealized gains (losses) on investments in the Statement of Operations.
Derivative instruments
The Fund may invest in certain derivative instruments, which are transactions whose values depend on or are derived from (in
whole or in part) the value of one or more other assets, such as securities, currencies, commodities or indices. The Fund
uses a rules-based call option writing strategy on the NASDAQ 100 Index®, an unmanaged index that includes the largest and most active nonfinancial domestic and international companies listed on the Nasdaq Stock Market, or its exchange-traded fund equivalent (NASDAQ 100) on a month-to-month basis.
The Fund may also seek to provide downside protection by purchasing puts on the NASDAQ 100 when premiums on these options are considered by the Investment Manager to be low and, therefore, attractive relative to the downside protection
provided.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
29
Notes to Financial Statements (continued)
December 31, 2023
The Fund may also buy or write other call and put options on securities, indices, ETFs and market baskets of securities to
generate additional income or return or to provide the portfolio with downside protection. In this regard, options may include
writing “in-” or “out-of-the-money” put options or buying or selling options in connection with closing out positions prior to expiration of any options. However, the Fund does not intend to write “naked” call options on individual stocks (i.e., selling a call option on an individual security not owned by the Fund) other than in connection with implementing the options strategies
with respect to the NASDAQ 100. The put and call options purchased, sold or written by the Fund may be exchange-listed or
over-the-counter.
The notional amounts of derivative instruments, if applicable, are not recorded in the financial statements. A derivative
instrument may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the
contract. Options written by the Fund do not typically give rise to counterparty credit risk, as options written generally
obligate the Fund and not the counterparty to perform. With exchange-traded purchased options, there is minimal counterparty credit
risk to the Fund since the exchange’s clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the counterparty credit risk
is limited to failure of the clearinghouse. However, credit risk still exists in exchange traded option contracts with respect
to any collateral that is held in a broker’s customer accounts. While clearing brokers are required to segregate customer collateral from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there
is a shortfall in the aggregate amount of collateral held by the broker for all its clients, U.S. bankruptcy laws will typically
allocate that shortfall on a pro-rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk,
the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or similar agreement with its derivatives counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs over-the-counter derivatives and foreign exchange forward contracts and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an
ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting)
including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular
jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events.
Collateral (margin) requirements differ by type of derivative. Collateral terms for most over-the-counter derivatives are
subject to regulatory requirements to exchange variation margin with trading counterparties and may have contract specific margin
terms as well. Margin requirements are established by the exchange for exchange traded options and by the CCP for futures
and options on futures. Brokers can ask for margin in excess of the minimum in certain circumstances. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the
risk of loss from counterparty nonperformance. The Fund may also pay interest expense on cash collateral received from the
broker or receive interest income on cash collateral pledged to the broker. The Fund attempts to mitigate counterparty risk
by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations
and by monitoring the financial stability of those counterparties.
Investments in derivative instruments may expose the Fund to certain additional risks, including those detailed below.
Options contracts
Options are contracts which entitle the holder to purchase or sell securities or other identified assets at a specified price,
or in the case of index option contracts, to receive or pay the difference between the index value and the strike price of the
index option contract. Option contracts can be either exchange-traded or over-the-counter. The Fund has written option contracts to decrease the Fund’s exposure to equity risk and to increase return on investments. These instruments may be used for other purposes in future periods. Completion of transactions for option contracts traded in the over-the-counter
market depends upon the performance of the other party. Collateral may be collected or posted by the Fund to secure over-the-counter option contract trades. Collateral held or posted by the Fund for such option contract trades must be returned to the broker or the Fund upon closure, exercise or expiration of the contract.
30
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
Options contracts purchased are recorded as investments. When the Fund writes an options contract, the premium received is recorded as an asset and an amount equivalent to the premium is recorded as a liability in the Statement of Assets and
Liabilities and is subsequently adjusted to reflect the current fair value of the option written. Changes in the fair value
of the written option are recorded as unrealized appreciation or depreciation until the contract is exercised or has expired. The
Fund realizes a gain or loss when the option contract is closed or expires. When option contracts are exercised, the proceeds on
sales for a written call or purchased put option contract, or the purchase cost for a written put or purchased call option
contract, is adjusted by the amount of premium received or paid.
For over-the-counter options purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive
change in market values net of any collateral held by the Fund should the counterparty fail to perform under the contracts.
Option contracts written by the Fund do not typically give rise to significant counterparty credit risk, as options written
generally obligate the Fund and not the counterparty to perform. The risk in writing a call option contract is that the Fund
gives up the opportunity for profit if the market price of the security increases above the strike price and the option contract
is exercised. The risk in writing a put option contract is that the Fund may incur a loss if the market price of the security
decreases below the strike price and the option contract is exercised. Exercise of a written option could result in the Fund
purchasing or selling a security or foreign currency when it otherwise would not, or at a price different from the current
market value. In purchasing and writing options, the Fund bears the risk of an unfavorable change in the value of the underlying
instrument or the risk that the Fund may not be able to enter into a closing transaction due to an illiquid market.
Effects of derivative transactions in the financial statements
The following tables are intended to provide additional information about the effect of derivatives on the financial statements
of the Fund, including: the fair value of derivatives by risk category and the location of those fair values in the Statement
of Assets and Liabilities; and the impact of derivative transactions over the period in the Statement of Operations, including
realized and unrealized gains (losses). The derivative instrument schedules following the Portfolio of Investments present
additional information regarding derivative instruments outstanding at the end of the period, if any.
The following table is a summary of the fair value of derivative instruments (not considered to be hedging instruments for
accounting disclosure purposes) at December 31, 2023:
|
|
|
|
|
|
Statement
of assets and liabilities
location
|
|
|
|
Option contracts written, at value
|
|
The following table indicates the effect of derivative instruments (not considered to be hedging instruments for accounting
disclosure purposes) in the Statement of Operations for the year ended December 31, 2023:
Amount of realized gain (loss) on derivatives recognized in income
|
|
|
Option
contracts
written
($)
|
|
|
|
|
|
Change in unrealized appreciation (depreciation) on derivatives recognized in income
|
|
|
Option
contracts
written
($)
|
|
|
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
31
Notes to Financial Statements (continued)
December 31, 2023
The following table is a summary of the average daily outstanding volume by derivative instrument for the year ended December 31, 2023:
Offsetting of assets and liabilities
The following table presents the Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as of December 31, 2023:
|
|
|
|
|
|
Call option contracts written
|
|
Total financial and derivative net assets
|
|
Total collateral received (pledged) (a)
|
|
|
|
|
|
|
In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization.
|
|
|
Represents the net amount due from/(to) counterparties in the event of default.
|
Security transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific
identification method for both financial statement and federal income tax purposes.
Income recognition
Corporate actions and dividend income are generally recorded net of any non-reclaimable tax withholdings, on the ex-dividend
date or upon receipt of an ex-dividend notification in the case of certain foreign securities.
The Fund may receive distributions from holdings in equity securities, business development companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment companies (RICs), and real estate investment trusts (REITs), which report information as to the tax character of their distributions annually. These distributions
are allocated to dividend income, capital gain and return of capital based on actual information reported. Return of capital
is recorded as a reduction of the cost basis of securities held. If the Fund no longer owns the applicable securities, return
of capital is recorded as a realized gain. With respect to REITs, to the extent actual information has not yet been reported,
estimates for return of capital are made by Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed by the REITs, which could result in a proportionate change in return of capital to stockholders.
Awards from class action litigation are recorded as a reduction of cost basis if the Fund still owns the applicable securities
on the payment date. If the Fund no longer owns the applicable securities on the payment date, the proceeds are recorded as realized gains.
Determination of net asset value
The net asset value per share of the Fund is computed by dividing the value of the net assets of the Fund by the total number
of outstanding shares of the Fund, rounded to the nearest cent, at the close of regular trading (ordinarily 4:00 p.m. Eastern
Time) every day the New York Stock Exchange is open.
32
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable income and net capital gain, if any, for
its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar
year substantially all of its ordinary income, capital gain net income and certain other amounts, if any, such that the Fund
should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign taxes
The Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may
be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based upon its current interpretation of tax
rules and regulations that exist in the markets in which it invests.
Realized gains in certain countries may be subject to foreign taxes at the Fund level, based on statutory rates. The Fund
accrues for such foreign taxes on realized and unrealized gains at the appropriate rate for each jurisdiction, as applicable.
The amount, if any, is disclosed as a liability in the Statement of Assets and Liabilities.
Dividends to stockholders
In November 2010, the Fund paid its first dividend under the Fund’s managed distribution policy adopted by the Fund’s Board of Directors. Prior to the managed distribution policy, the Fund paid distributions pursuant to a level rate distribution
policy. Under its former distribution policy and consistent with the 1940 Act, the Fund could not distribute long-term capital gains,
as defined in the Internal Revenue Code of 1986, more often than once in any one taxable year. In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits the Fund to distribute long-term capital
gains more often than once in any one taxable year. After consideration by the Fund’s Board of Directors, the Fund adopted the managed distribution policy which allows the Fund to make periodic distributions of long-term capital gains. Under its
managed distribution policy, the Fund intends to make quarterly distributions to Common Stockholders at a rate that reflects
the past and projected performance of the Fund. The Fund expects to receive all or some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the equity and equity-related securities in
its portfolio; and (ii) capital gains (short-term and long-term) from option premiums and the sale of portfolio securities. It
is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return of capital is a return of a portion
of an investor’s original investment. A return of capital is not taxable, but it reduces a Stockholder’s tax basis in his or her shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the Stockholder of his or her shares.
Distributions may vary, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which, the Fund receives income from the sources described above. The net investment income of the Fund consists
of all income (other than net short-term and long-term capital gains) less all expenses of the Fund.
The Board of Directors may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, as the Fund’s portfolio and market conditions change, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains. Over time, the Fund will distribute all of its net investment
income and net short-term capital gains. In addition, at least annually, the Fund intends to distribute any net capital gain
(which is the excess of net long-term capital gain over net short-term capital loss) or, alternatively, to retain all or a
portion of the year’s net capital gain and pay federal income tax on the retained gain.
Dividends and other distributions to stockholders are recorded on ex-dividend dates.
The Fund has an investment objective to seek growth of capital and current income. In the latter regard, in 2023, the Fund’s managed distribution policy provided stockholders with current income through quarterly distributions of $0.4625 per share,
comprised of $0.0571 in short-term capital gains and $1.7929 in long-term capital gains. In order to avoid federal excise
tax in 2023, the Fund also paid a special fourth quarter capital gain distribution, beyond its typical quarterly managed distribution
policy, in the amount of $0.2669 per share. No portion of the Fund’s 2023 distributions, including such special distribution, consisted of a return of capital. A return of capital may occur, for example, when some or all of the money that you invested
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
33
Notes to Financial Statements (continued)
December 31, 2023
in the Fund is paid back to you. The Fund was fully invested throughout 2023, implementing its technology and options investing strategies so as to position the Fund to achieve its capital appreciation investment objective, as evidenced by
the Fund’s NAV return of 38.89% in 2023, which underperformed the Fund’s benchmark, the S&P North American Technology Sector Index’s return of 61.13% for the same period.
Guarantees and indemnifications
Under the Fund’s organizational documents and, in some cases, by contract, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other transactions with affiliates
Management services fees
The Fund has entered into a Management Agreement with Columbia Management Investment Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Under the Management Agreement,
the Investment Manager provides the Fund with investment research and advice, as well as administrative and accounting services. The management services fee is an annual fee that is equal to 1.06% of the Fund’s daily Managed Assets. "Managed Assets" means the net asset value of the Fund’s outstanding Common Stock plus the liquidation preference of any issued and outstanding preferred stock of the Fund and the principal amount of any borrowings used for leverage. To date, the Fund has not issued preferred stock.
Compensation of Board members
Members of the Board of Directors who are not officers or employees of the Investment Manager or Ameriprise Financial are
compensated for their services to the Fund as disclosed in the Statement of Operations. Under a Deferred Compensation Plan (the Deferred Plan), these members of the Board of Directors may elect to defer payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All amounts payable under the Deferred Plan constitute a general unsecured obligation of the Fund. The expense for the Deferred Plan, which includes Directors’ fees deferred during the current period as well as any gains or losses on the Directors’ deferred compensation balances as a result of market fluctuations, is included in "Deferred compensation of board members" in the Statement of Operations.
Compensation of Chief Compliance Officer
The Board of Directors has appointed a Chief Compliance Officer for the Fund in accordance with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment companies managed by the Investment
Manager and its affiliates, based on relative net assets.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations,
which may differ from GAAP because of temporary or permanent book to tax differences.
At December 31, 2023, these differences were primarily due to differing treatment for deferral/reversal of wash sale losses,
derivative investments, tax straddles, trustees’ deferred compensation, distributions, foreign currency transactions and net operating loss reclassification. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences do not require reclassifications.
34
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
The following reclassifications were made:
Excess of distributions
over net investment
income ($)
|
Accumulated
net realized
gain ($)
|
|
|
|
|
|
Net investment income (loss) and net realized gains (losses), as disclosed in the Statement of Operations, and net assets
were not affected by this reclassification.
The tax character of distributions paid during the years indicated was as follows:
Year Ended December 31, 2023
|
Year Ended December 31, 2022
|
|
|
Long-term
capital gains ($)
|
|
|
Long-term
capital gains ($)
|
|
|
|
|
|
|
|
|
Short-term capital gain distributions, if any, are considered ordinary income distributions for tax purposes.
At December 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($)
|
Undistributed
long-term
capital gains ($)
|
Capital loss
carryforwards ($)
|
Net unrealized
appreciation ($)
|
|
|
|
|
|
At December 31, 2023, the cost of all investments for federal income tax purposes along with the aggregate gross unrealized
appreciation and depreciation based on that cost was:
|
|
Gross unrealized
appreciation ($)
|
Gross unrealized
(depreciation) ($)
|
Net unrealized
appreciation ($)
|
|
|
|
|
|
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute
adjustments to tax basis.
Management of the Fund has concluded that there are no significant uncertain tax positions in the Fund that would require
recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term investments and derivatives, if any, aggregated to $107,102,416 and $170,898,767, respectively, for the year ended December 31, 2023. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial Highlights.
Note 6. Dividend investment plan and stock repurchase program
The Fund, in connection with its Dividend Investment Plan (the Plan), issues shares of its own Common Stock, as needed, to
satisfy the Plan requirements. A total of 312,579 shares were issued to the Plan participants during the year ended December 31, 2023 for proceeds of $7,567,091, a weighted average premium of 1.48% from the net asset value of those shares.
Pursuant to the Plan, unless a Common Stockholder elects otherwise, all cash dividends, capital gains distributions, and other distributions are automatically reinvested in additional Common Stock. If you hold your shares in street name or other
nominee (i.e., through a broker), you should contact them to determine their policy, as the broker firm’s policy with respect to
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
35
Notes to Financial Statements (continued)
December 31, 2023
Fund distributions may be to default to a cash payment. Common Stockholders who elect not to participate in the Plan (including those whose intermediaries do not permit participation in the Plan by their customers) will receive all dividends
and distributions payable in cash directly to the Common Stockholder of record (or, if the shares of Common Stock are held in
street or other nominee name, then to such nominee). Common Stockholders may elect not to participate in the Plan and to receive all distributions of dividends and capital gains or other distributions in cash by sending written instructions to
Equiniti Trust Company, LLC (Equiniti), 6201 15th Avenue, Brooklyn, NY 11219. Participation in the Plan may be terminated or resumed at any time without penalty by written notice if received by Equiniti, prior to the record date for the next distribution.
Otherwise, such termination or resumption will be effective with respect to any subsequently declared distribution. The income tax consequences of participation in the Plan are the same whether you participate in the Plan and reinvest your Fund
distributions or you elect not to participate in the Plan and receive all your Fund distributions in cash (i.e., capital gains
and income are realized, although cash is not received by the shareholder).
Under the Plan, Common Stockholders receive shares of Common Stock in lieu of cash distributions unless they have elected otherwise as described above. Common Stock will be issued in lieu of cash by the Fund from previously authorized but unissued Common Stock. If the market price of a share on the ex-dividend date of such a distribution is at or above the
Fund’s net asset value per share on such date, the number of shares to be issued by the Fund to each Common Stockholder receiving shares in lieu of cash distributions will be determined by dividing the amount of the cash distribution to which
such Common Stockholder would be entitled by the greater of the net asset value per share on such date or 95% of the market price of a share on such date. If the market price of a share on such an ex-dividend date is below the net asset value per
share, the number of shares to be issued to such Common Stockholders will be determined by dividing such amount by the per share market price. The issuance of Common Stock at less than net asset value per share will dilute the net asset value
of all Common Stock outstanding at that time. Market price on any day means the closing price for the Common Stock at the
close of regular trading on the New York Stock Exchange on such day or, if such day is not a day on which the Common Stock trades, the closing price for the Common Stock at the close of regular trading on the immediately preceding day on which trading occurs.
The Fund reserves the right to amend or terminate the Plan as applied to any distribution paid subsequent to written notice
of the change sent to participants in the Plan at least 90 days before the record date for such distribution. There are no service
or brokerage charges to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service
charge payable to the Fund by the participants. The Fund reserves the right to amend the Plan to provide for payment of brokerage fees by the Plan participants in the event the Plan is changed to provide for open market purchases of Common Stock on behalf of the Plan participants. All correspondence concerning the Plan should be directed to Equiniti.
The Fund’s Board re-approved the Fund’s stock repurchase program for 2023, which is identical to the Fund’s 2022 stock repurchase program. The Fund, under its stock repurchase program, currently intends to make open market purchases of its Common Stock from time to time when the Fund’s Common Stock is trading at a discount to its net asset value, in an amount approximately sufficient to offset the growth in the number of shares of Common Stock issued as a result of the reinvestment of the portion of its distributions to Common Stockholders that are attributable to distributions received by
the Fund from its underlying portfolio investments less fund expenses. For the year ended December 31, 2023, no shares were purchased in the open market.
Note 7. Affiliated money market fund
The Fund invests in Columbia Short-Term Cash Fund, an affiliated money market fund established for the exclusive use by the
Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund from such investments is included as Dividends - affiliated issuers in the Statement of Operations. As an investing fund, the Fund indirectly bears its proportionate
share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares with a floating net asset value. The Securities and Exchange Commission has adopted amendments to money market fund rules requiring institutional prime money market funds like the Affiliated MMF to be subject, by April 2, 2024, to a discretionary liquidity fee up to 2% if the
imposition of such a fee is determined to be in the best interest of the Affiliated MMF and, by October 2, 2024, to a liquidity
fee if daily net redemptions exceed 5% of net assets.
36
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
Note 8. Interfund Lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission, the Fund entered into a master interfund lending agreement (the Interfund Program) with certain other funds advised by the Investment Manager or its affiliates (each a Participating Fund). The Interfund Program allows each Participating Fund to lend money directly to and,
other than closed-end funds (including the Fund) and money market funds, borrow money directly from other Participating Funds for temporary purposes through the Interfund Program (each an Interfund Loan).
A Participating Fund may make unsecured borrowings under the Interfund Program if its outstanding borrowings from all sources, including those outside of the Interfund Program, immediately after such unsecured borrowing under the Interfund
Program are equal to or less than 10% of its total assets, provided that if the borrowing Participating Fund has a secured
loan outstanding from any other lender, including but not limited to another Participating Fund, the borrowing Participating Fund’s borrowing under the Interfund Program will be secured on at least an equal priority basis with at least an equivalent percentage of collateral to loan value as any outstanding loan that requires collateral. A Participating Fund may not borrow
through the Interfund Program or from any other source if its total outstanding borrowings immediately after a borrowing would be more than 33 1/3% of its total assets or any lower threshold provided for by a Participating Fund’s fundamental or non-fundamental policy restriction.
No Participating Fund may lend to another Participating Fund through the Interfund Program if the loan would cause the lending Participating Fund’s aggregate outstanding loans under the Interfund Program to exceed 15% of its current net assets at the time of the loan. A Participating Fund’s Interfund Loans to any one Participating Fund may not exceed 5% of the lending Participating Fund’s net assets at the time of the loan. The duration of Interfund Loans will be limited to the time required to receive payment for securities sold, but in no event more than seven days. Interfund Loans effected within seven days of each other will be treated as separate loan transactions for purposes of this limitation. Each Interfund Loan may be called
on one business day’s notice by a lending Participating Fund and may be repaid on any day by a borrowing Participating Fund.
Loans under the Interfund Program are subject to the risk that the borrowing Participating Fund could be unable to repay the
loan when due, and a delay in repayment to the lending Participating Fund could result in a lost opportunity by the lending
Participating Fund to invest those loaned assets and additional lending costs. Because the Investment Manager provides investment management services to both borrowing and lending Participating Funds, the Investment Manager may have a potential conflict of interest in determining that an Interfund Loan is comparable in credit quality to other high-quality
money market instruments. The Participating Fund has adopted policies and procedures that are designed to manage potential conflicts of interest, but the administration of the Interfund Program may be subject to such conflicts.
As noted above, the Fund may only participate in the Interfund Program as a Lending Fund. The Fund’s activity in the Interfund Program during the year ended December 31, 2023 was as follows:
|
|
|
Weighted average
interest rate (%)
|
Number of days
with outstanding loans
|
|
|
|
|
|
Interest income earned by the Fund is recorded as interfund lending in the Statement of Operations. The Fund had no outstanding interfund loans at December 31, 2023.
Note 9. Investments in illiquid investments
The Fund may not acquire any illiquid investment if, immediately after the acquisition, the Fund would have invested more
than 15% of Managed Assets in illiquid investments that are assets. For these purposes, an “illiquid investment” means any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
37
Notes to Financial Statements (continued)
December 31, 2023
Note 10. Significant risks
Derivatives risk
Losses involving derivative instruments may be substantial, because a relatively small movement in the underlying reference
(which is generally the price, rate or other economic indicator associated with a security(ies), commodity, currency, index
or other instrument or asset) may result in a substantial loss for the Fund. In addition to the potential for increased losses,
the use of derivative instruments may lead to increased volatility within the Fund. Derivatives will typically increase the Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk, liquidity risk and pricing risk.
Information technology sector risk
The Fund invests a substantial portion of its assets in technology and technology-related companies. The market prices of
technology and technology-related stocks tend to exhibit a greater degree of market risk and price volatility than other types
of investments. These stocks may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. These stocks also may be affected adversely by changes in technology, consumer and business purchasing patterns, government regulation and/or obsolete products or services. In addition, a rising interest rate
environment tends to negatively affect technology and technology-related companies. In such an environment, those companies with high market valuations may appear less attractive to investors, which may cause sharp decreases in the companies’ market prices. Further, those technology or technology-related companies seeking to finance their expansion would have increased borrowing costs, which may negatively impact their earnings. As a result, these factors may negatively
affect the performance of the Fund. Finally, the Fund may be susceptible to factors affecting the technology and technology-related industries, and the Fund’s net asset value may fluctuate more than a fund that invests in a wider range of industries. Technology and technology-related companies are often smaller and less experienced companies and may be subject to greater risks than larger companies, such as limited product lines, markets and financial and managerial resources. These
risks may be heightened for technology companies in foreign markets. Some companies in the information technology sector are facing increased government and regulatory scrutiny and may be subject to adverse government or regulatory action, which could negatively impact the value of their securities.
Leverage risk
Leverage occurs when the Fund increases its assets available for investment using derivatives, or similar instruments or techniques. Use of leverage can produce volatility and may exaggerate changes in the Fund’s NAV and in the return on the Fund’s portfolio, which may increase the risk of loss. If the Fund uses leverage, through the purchase of particular instruments such as derivatives, the Fund may experience capital losses. Leverage presents the opportunity for increased net income and capital gains, but may also exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
Market risk
The Fund may incur losses due to declines in the value of one or more securities in which it invests. These declines may be
due to factors affecting a particular issuer, or the result of, among other things, political, regulatory, market, economic
or social developments affecting the relevant market(s) more generally. In addition, turbulence in financial markets and reduced
liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the
Fund’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause operational challenges. Global economies and financial markets are increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These
risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional or global events such as terrorism,
war, other conflicts, natural disasters, disease/virus outbreaks and epidemics or other public health issues, recessions,
depressions or other events – or the potential for such events – could have a significant negative impact on global economic and market conditions.
38
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
The large-scale invasion of Ukraine by Russia in February 2022 has resulted in sanctions and market disruptions, including
declines in regional and global stock markets, unusual volatility in global commodity markets and significant devaluations
of Russian currency. The extent and duration of the military action are impossible to predict but could continue to be significant.
Market disruption caused by the Russian military action, and any counter measures or responses thereto (including international sanctions, a downgrade in a country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and espionage) could continue to have severe adverse impacts on regional and/or global securities and commodities markets, including markets for oil and natural gas. These impacts may
include reduced market liquidity, distress in credit markets, further disruption of global supply chains, increased risk of
inflation, restricted cross-border payments and limited access to investments and/or assets in certain international markets
and/or issuers. These developments and other related events could negatively impact Fund performance.
Non-diversification risk
A non-diversified fund is permitted to invest a greater percentage of its total assets in fewer issuers than a diversified
fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of
the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of a more diversified fund.
Options risk
The Fund engages in transactions in options on securities, indices, exchange traded funds and market baskets of securities
on exchanges and in the OTC markets. In general, exchange-traded options have standardized exercise prices and expiration
dates and require the parties to post margin against their obligations, and the performance of the parties’ obligations in connection with such options is guaranteed by the exchange or a related clearing corporation. OTC options have more flexible
terms negotiated between the buyer and the seller, but generally do not require the parties to post margin and are subject
to greater credit risk. OTC options also involve greater liquidity risk.
In addition to writing call options as described above, the Fund may purchase put options. By buying a put option, the Fund
will pay a premium to acquire a right to sell the securities or instruments underlying the put at the exercise price of the
option. The Fund will lose money if the securities or instruments underlying the option do not decline in value below the
exercise price of the option by an amount sufficient to offset the premium paid to acquire the option. To the extent the Fund
purchases put options in the OTC market, the Fund will be subject to the credit risk of the seller of the option. The Fund
also may write put options on the types of securities or instruments that may be held by the Fund, provided that such put options
are secured by segregated, liquid instruments. The Fund will receive a premium for writing a put option, which increases the
Fund’s return. In exchange for the premium received, the Fund has the obligation to buy the securities or instruments underlying the option at an agreed-upon exercise price if the securities or instruments decrease below the exercise price
of the option.
The Fund will lose money if the securities or instruments decrease in value so that the amount the Fund is obligated to pay
the counterparty to the option to purchase the securities underlying the option upon exercise of the option exceeds the value
of those securities by an amount that is greater than the premium received by the Fund for writing the option.
The Fund may purchase call options on any of the types of securities or instruments in which it may invest. In exchange for
paying the option premium, a purchased call option gives the Fund the right to buy, and obligates the seller to sell, the
underlying security or instrument at the exercise price. The Fund will lose money if the securities or instruments underlying
the option do not appreciate in value in an amount sufficient to offset the premium paid by the Fund to acquire the option.
Writing call options risk
A principal aspect of the Fund’s investment strategy involves writing call options on the NASDAQ 100. This part of the Fund’s strategy subjects the Fund to certain additional risks. A decision as to whether, when and how to use options involves the
exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. The principal factors affecting the market value of an option include supply and demand, interest rates, the current market price of the underlying index or security in relation to the exercise price of
the option, the actual or perceived volatility of the underlying index or security and the time remaining until the expiration
date.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
39
Notes to Financial Statements (continued)
December 31, 2023
The Fund intends to write call options on the NASDAQ 100; however, it does not intend to have a portfolio of securities that
mirrors the securities in the NASDAQ 100. As a result, during a period when the Fund has outstanding call options written
on the NASDAQ 100, the NASDAQ 100 may appreciate to a greater extent than the securities in the Fund’s portfolio. If the call options are exercised in these circumstances, the Fund’s loss on the options will be greater because it will be paying the option holder not only an amount effectively representing appreciation on securities in its own portfolio but also an amount
representing the greater appreciation experienced by the securities in the NASDAQ 100 that the Fund does not own. If, at a
time these call options may be exercised, the securities underlying these options have market values above the exercise price, then these call options will be exercised and the Fund will be obligated to deliver to the option holder either the
securities underlying these options or to deliver the cash value of those securities, in exchange for which the option holder
will pay the Fund the exercise price. In either case, the Fund will incur losses to the extent the market value of the underlying
securities exceed the sum of the premium the Fund received from writing the call options and the exercise price of the call
options, which loss may be very substantial.
To the extent all or part of the Fund’s call options are covered, the Fund forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security underlying the call option above the sum of the option premium received and the exercise price of the call, but has retained the risk of loss should the price of the underlying security
decline below the exercise price minus the option premium received. The writer of an exchange-listed option on a security has no control over when during the exercise period of the option (which may be a single day or multiple days) it may be required
to fulfill its obligation as a writer of the option. Once an option writer has received an exercise notice, it would be obligated
to deliver the underlying security at the exercise price. Thus, the writing of call options may require the Fund to sell portfolio
securities at inopportune times or for prices other than current market values and will limit the amount of appreciation the
Fund can realize above the exercise price of an option.
The Fund may be required to sell investments from its portfolio to effect cash settlement (or transfer ownership of a stock
or other instrument to physically settle) on any written call options that are exercised. Such sales (or transfers) may occur
at inopportune times, and the Fund may incur transaction costs that increase the costs borne by Common Stockholders. The Fund may sell written call options over an exchange or in the OTC market. The options in the OTC markets may not be as liquid as exchange-listed options. The Fund may be limited in the number of counterparties willing to take positions opposite
the Fund or may find the terms of such counterparties to be less favorable than the terms available for listed options. The
Fund cannot guarantee that its options strategies will be effective. Moreover, OTC options may provide less favorable tax
treatment than listed options.
The value of options may be adversely affected if the market for such options becomes less liquid or smaller. There can be
no assurance that a liquid market will exist when the Fund seeks to close out an option position, in the case of a call option
written, by buying the option back. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange
on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed
with respect to particular classes or series of options; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or the Options Clearing Corporation (OCC) may not at all times
be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be
compelled to discontinue the trading of options (or a particular class or series of options) at some future date. If trading
were discontinued, the secondary market on that exchange (or in that class or series of options) would cease to exist. However,
outstanding options on that exchange that had been issued by the OCC as a result of trades on that exchange would continue to be exercisable in accordance with their terms. The Fund’s ability to terminate OTC options will be more limited than with exchange-traded options and may involve the risk that broker-dealers participating in such transactions will not
fulfill their obligations.
The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent
that the options markets close before the markets for the underlying securities, significant price and rate movements can
take place in the underlying markets that would not be reflected concurrently in the options markets. Call options are marked
to market daily and their value will be affected by changes in the value of and dividend rates of the underlying common stocks, changes in interest rates, changes in the actual or perceived volatility of the stock market and the underlying common stocks and the remaining time to the options’ expiration.
40
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Notes to Financial Statements (continued)
December 31, 2023
Additionally, the exercise price of an option may be adjusted downward before the option’s expiration as a result of the occurrence of certain corporate events affecting the underlying equity security, such as extraordinary dividends, stock splits,
merger or other extraordinary distributions or events. A reduction in the exercise price of an option would reduce the Fund’s capital appreciation potential on the underlying security.
The Fund’s options transactions will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities on which such options are traded. These limitations govern the maximum number of options in each class
which may be written or purchased by a single investor or group of investors acting in concert, regardless of whether the
options are written or purchased on the same or different exchanges, boards of trade or other trading facilities or are held
or written in one or more accounts or through one or more brokers. Thus, the number of options which the Fund may write or purchase may be affected by options written or purchased by other investment advisory clients of the Investment Manager. An exchange, board of trade or other trading facility may order the liquidation of positions found to be in excess of these
limits, and may impose certain other sanctions.
Note 11. Subsequent events
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosure.
Note 12. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates are involved in the normal course of business in legal proceedings which
include regulatory inquiries, arbitration and litigation, including class actions concerning matters arising in connection
with the conduct of their activities as part of a diversified financial services firm. Ameriprise Financial believes that the Fund
is not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending
legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Fund or the ability of Ameriprise
Financial or its affiliates to perform under their contracts with the Fund. Ameriprise Financial is required to make quarterly
(10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange Commission (SEC) on legal and regulatory matters that relate to Ameriprise Financial and its affiliates. Copies of these filings may be obtained by accessing
the SEC website at www.sec.gov.
Although we believe proceedings are not likely to have a material adverse effect on the Fund or the ability of Ameriprise
Financial or its affiliates to perform under their contracts with the Fund, these proceedings are subject to uncertainties
and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of
these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material
adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial or one or more of
its affiliates that provide services to the Fund.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
41
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Columbia Seligman Premium Technology Growth Fund, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia
Seligman Premium Technology Growth Fund, Inc. (the "Fund") as of December 31, 2023, the related statement of operations for the year ended December 31, 2023, the statement of changes in net assets for each of the two years in the period ended
December 31, 2023, including the related notes, and the financial highlights for each of the ten years in the period ended
December 31, 2023 (collectively referred to as the "financial statements"). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Fund as of December 31, 2023, the results of its operations
for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2023 and the financial highlights for each of the ten years in the period ended December 31, 2023 in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
February 22, 2024
We have served as the auditor of one or more investment companies within the Columbia Funds Complex since 1977.
42
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Federal Income Tax Information
(Unaudited)
The Fund hereby designates the following tax attributes for the fiscal year ended December 31, 2023.
Qualified
dividend
income
|
Dividends
received
deduction
|
|
|
|
|
|
Qualified dividend income. For taxable, non-corporate stockholders, the percentage of ordinary income distributed during the
fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The percentage of ordinary income distributed during the fiscal year that qualifies for the
corporate dividends received deduction.
Capital gain dividend. The Fund designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Directors and Officers
(Unaudited)
The Board that oversees the Fund’s operations and appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about the Fund’s Directors as of the printing of this report, including their principal occupations during the past five years, although specific titles
for individuals may have varied over the period. Certain Directors may have served as a Trustee to other Funds in the Columbia
Funds Complex prior to the date set forth in the Position Held with the Fund and Length of Service column. Under current Board policy, Directors may serve a term of three years, whereupon they may be re-elected to serve another term (the Fund’s Board has three classes, with one class expiring each year at the Fund’s regular stockholder’s meeting), or, for Directors not affiliated with the Investment Manager, generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent directors
Name, Address,
Year of Birth
|
Position Held
With the Fund and
Length of Service
|
Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
|
Number of
Funds in the
Columbia Funds
Complex*
Overseen
|
Other Directorships
Held by Director
During the Past
Five Years and other
Relevant Board
Experience
|
George S. Batejan
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
|
Director since January
2018
|
Executive Vice President, Global Head of Technology
and Operations, Janus Capital Group, Inc.,
2010-2016
|
|
Former Chairman of the Board,
NICSA (National Investment
Company Services Association)
(Executive Committee,
Nominating Committee and
Governance Committee),
2014-2016; former Director,
Intech Investment
Management, 2011-2016;
former Board Member, Metro
Denver Chamber of Commerce,
2015-2016; former Advisory
Board Member, University of
Colorado Business School,
2015-2018; former Board
Member, Chase Bank
International, 1993-1994
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
43
Directors and Officers (continued)
(Unaudited)
Independent directors (continued)
Name, Address,
Year of Birth
|
Position Held
With the Fund and
Length of Service
|
Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
|
Number of
Funds in the
Columbia Funds
Complex*
Overseen
|
Other Directorships
Held by Director
During the Past
Five Years and other
Relevant Board
Experience
|
Kathleen Blatz
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
|
Director since October
2009
|
Attorney, specializing in arbitration and mediation;
Trustee of Gerald Rauenhorst 1982 Trusts, since
2020; Chief Justice, Minnesota Supreme Court,
1998-2006; Associate Justice, Minnesota Supreme
Court, 1996-1998; Fourth Judicial District Court
Judge, Hennepin County, 1994-1996; Attorney in
private practice and public service, 1984-1993;State
Representative, Minnesota House of Representatives,
1979-1993, which included service on the Tax and
Financial Institutions and Insurance Committees;
Member and Interim Chair, Minnesota Sports Facilities
Authority, January -July 2017; Interim President and
Chief Executive Officer, Blue Cross and Blue Shield of
Minnesota (health care insurance), February-July
2018, April-October 2021
|
|
Former Trustee, Blue Cross and
Blue Shield of Minnesota,
2009-2021 (Chair of the
Business Development
Committee, 2014-2017; Chair
of the Governance Committee,
2017-2019); former Member
and Chair of the Board,
Minnesota Sports Facilities
Authority, January 2017-July
2017; former Director, Robina
Foundation, 2009-2020
(Chair, 2014-2020); Director,
Richard M. Schulze Family
Foundation, since 2021
|
Pamela G. Carlton
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
|
Director since October
2009; Chair of the
Board since January
2023
|
President, Springboard-Partners in Cross Cultural
Leadership (consulting company), since 2003;
Managing Director of US Equity Research, JP Morgan
Chase, 1999-2003; Director of US Equity Research,
Chase Asset Management, 1996-1999; Co-Director
Latin America Research, 1993-1996, COO Global
Research, 1992-1996, Co-Director of US Research,
1991-1992, Investment Banker, 1982-1991, Morgan
Stanley; Attorney, Cleary Gottlieb Steen &
Hamilton LLP, 1980-1982
|
|
Trustee, New York Presbyterian
Hospital Board, since 1996;
Director, DR Bank (Audit
Committee, since 2017 and
Audit Committee Chair, since
November 2023); Director,
Evercore Inc. (Audit
Committee, Nominating and
Governance Committee)
(financial services), since
2019; Director, Apollo
Commercial Real Estate
Finance, Inc. (Chair,
Nominating and Governance
Committee), since 2021; the
Governing Council of the
Independent Directors Council
(IDC), since 2021
|
Janet Langford Carrig
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1957
|
Director since January
2023
|
Senior Vice President, General Counsel and Corporate
Secretary, ConocoPhillips (independent energy
company), September 2007-October 2018
|
|
Director, EQT Corporation
(natural gas producer), since
2019; former Director, Whiting
Petroleum Corporation
(independent oil and gas
company), 2020-2022
|
Patricia M. Flynn
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1950
|
Director since October
2009
|
Professor Emeritus of Economics and Management,
Bentley University, since 2023; Professor of
Economics and Management, Bentley University,
1976-2023; Dean, McCallum Graduate School of
Business, Bentley University, 1992-2002
|
|
Former Trustee, MA Taxpayers
Foundation, 1997-2022;
former Director, The MA
Business Roundtable,
2003-2019; former
Chairperson, Innovation Index
Advisory Committee, MA
Technology Collaborative,
1997-2020
|
44
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Directors and Officers (continued)
(Unaudited)
Independent directors (continued)
Name, Address,
Year of Birth
|
Position Held
With the Fund and
Length of Service
|
Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
|
Number of
Funds in the
Columbia Funds
Complex*
Overseen
|
Other Directorships
Held by Director
During the Past
Five Years and other
Relevant Board
Experience
|
Brian J. Gallagher
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
|
Director since January
2020
|
Retired; Partner with Deloitte & Touche LLP and its
predecessors, 1977-2016
|
|
Trustee, Catholic Schools
Foundation, since 2004
|
Douglas A. Hacker
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1955
|
Director since
January 2022
|
Independent business executive, since May 2006;
Executive Vice President – Strategy of United Airlines,
December 2002-May 2006; President of UAL Loyalty
Services (airline marketing company), September
2001-December 2002; Executive Vice President and
Chief Financial Officer of United Airlines, July
1999-September 2001
|
|
Director, SpartanNash
Company since November
2013 (Chair of the Board since
May 2021) (food distributor);
Director, Aircastle Limited
(Chair of Audit Committee)
(aircraft leasing); former
Director, Nash Finch Company
(food distributor), 2005-2013;
former Director, SeaCube
Container Leasing Ltd.
(container leasing),
2010-2013; and former
Director, Travelport Worldwide
Limited (travel information
technology), 2014-2019
|
David M. Moffett
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1955
|
Director since January
2024
|
Retired; former Chief Executive Officer of Freddie Mac
and Chief Financial Officer of U.S. Bank
|
|
Director, CSX Corporation
(transportation suppliers);
Director, PayPal Holdings Inc.
(payment and data processing
services); former Director,
eBay Inc. (online trading
community), 2007-2015; and
former Director, CIT Bank, CIT
Group Inc. (commercial and
consumer finance),
2010-2016; former Senior
Adviser to The Carlyle Group
(financial services), March
2008-September 2008; former
Governance Consultant to
Bridgewater Associates
(investment company), January
2013-December 2015
|
Catherine James Paglia
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1952
|
Director since October
2009
|
Director, Enterprise Asset Management, Inc. (private
real estate and asset management company), since
September 1998; Managing Director and Partner,
Interlaken Capital, Inc., 1989-1997; Vice President,
1982-1985, Principal, 1985-1987, Managing
Director, 1987-1989, Morgan Stanley; Vice President,
Investment Banking, 1980-1982, Associate,
Investment Banking, 1976-1980, Dean Witter
Reynolds, Inc.
|
|
Director, Valmont Industries,
Inc. (irrigation systems
manufacturer), since 2012;
Trustee, Carleton College (on
the Investment Committee),
since 1987; Trustee, Carnegie
Endowment for International
Peace (on the Investment
Committee), since 2009
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
45
Directors and Officers (continued)
(Unaudited)
Independent directors (continued)
Name, Address,
Year of Birth
|
Position Held
With the Fund and
Length of Service
|
Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
|
Number of
Funds in the
Columbia Funds
Complex*
Overseen
|
Other Directorships
Held by Director
During the Past
Five Years and other
Relevant Board
Experience
|
Sandra L. Yeager
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1964
|
|
Retired; President and founder, Hanoverian Capital,
LLC (SEC registered investment advisor firm),
2008-2016; Managing Director, DuPont Capital,
2006-2008; Managing Director, Morgan Stanley
Investment Management, 2004-2006; Senior Vice
President, Alliance Bernstein, 1990-2004
|
|
Former Director, NAPE
(National Alliance for
Partnerships in Equity)
Education Foundation, October
2016-October 2020; Advisory
Board, Jennersville YMCA, June
2022-June 2023
|
Interested director affiliated with Investment Manager**
Name,
Address,
Year of Birth
|
Position Held
With the Fund and
Length of Service
|
Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
|
Number of
Funds in the
Columbia Funds
Complex*
Overseen
|
Other Directorships Held
by Director During the
Past Five Years
|
Daniel J. Beckman
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1962
|
Director since
November 2021 and
President since June
2021
|
President and Principal Executive Officer of the
Columbia Funds, since June 2021; Vice President,
Columbia Management Investment Advisers, LLC,
since April 2015; formerly, Vice President – Head of
North America Product, Columbia Management
Investment Advisers, LLC, April 2015 – December
2023; President and Principal Executive Officer,
Columbia Acorn/Wanger Funds, since July 2021
|
|
Director, Ameriprise
Trust Company, since October
2016; Director, Columbia
Management Investment
Distributors, Inc., since
November 2018; Board of
Governors, Columbia Wanger
Asset Management, LLC, since
January 2022
|
|
|
The term “Columbia Funds Complex” as used herein includes Columbia Seligman Premium Technology Growth Fund, Tri-Continental Corporation and each series of Columbia Funds
Series Trust (CFST), Columbia Funds Series Trust I (CFST I), Columbia Funds Series Trust II (CFST II), Columbia ETF Trust
I (CET I), Columbia ETF Trust II (CET II), Columbia Funds
Variable Insurance Trust (CFVIT) and Columbia Funds Variable Series Trust II (CFVST II). Messrs. Batejan, Beckman, Gallagher,
Hacker and Moffett and Mses. Blatz, Carlton, Carrig,
Flynn, Paglia and Yeager serve as directors of Columbia Seligman Premium Technology Growth Fund and Tri-Continental Corporation.
|
|
|
Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee
of the Investment Manager or Ameriprise Financial.
|
46
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
Directors and Officers (continued)
(Unaudited)
The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established.
The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the
Fund as of the printing of this report, including principal occupations during the past five years, although their specific titles
may have varied over the period. In addition to Mr. Beckman, who is the President and Principal Executive Officer, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth
|
Position and year
first appointed to
position for any Fund
in the Columbia
Funds Complex or a
predecessor thereof
|
Principal occupation(s) during past five years
|
Michael G. Clarke
290 Congress Street
Boston, MA 02210
1969
|
Chief Financial Officer and
Principal Financial Officer
(2009); Senior Vice President
(2019); Treasurer and Chief
Accounting Officer (Principal
Accounting Officer) (2024) for
CFST, CFST I, CFST II, CFVIT
and CFVST II
|
Senior Vice President and North America Head of Operations & Investor Services, Columbia Management
Investment Advisers, LLC, since June 2023 (previously Senior Vice President and Head of Global
Operations, March 2022 – June 2023, Vice President, Head of North America Operations, and Co-Head of
Global Operations, June 2019 - February 2022 and Vice President – Accounting and Tax, May 2010 -
May 2019); senior officer of Columbia Funds and affiliated funds, since 2002. Director, Ameriprise Trust
Company, since June 2023.
|
Marybeth Pilat
290 Congress Street
Boston, MA 02210
1968
|
Treasurer and Chief
Accounting Officer (Principal
Accounting Officer) and
Principal Financial Officer
(2020) for CET I and CET II;
Assistant Treasurer, CFST,
CFST I, CFST II, CFVIT and
CFVST II
|
Vice President – Product Pricing and Administration, Columbia Management Investment Advisers, LLC,
since May 2017.
|
William F. Truscott
290 Congress Street
Boston, MA 02210
1960
|
Senior Vice President (2001)
|
Formerly, Trustee/Director of Columbia Funds Complex or legacy funds, November 2001 - January 1,
2021; Chief Executive Officer, Global Asset Management, Ameriprise Financial, Inc., since September
2012; Chairman of the Board and President, Columbia Management Investment Advisers, LLC, since July
2004 and February 2012, respectively; Chairman of the Board and Chief Executive Officer, Columbia
Management Investment Distributors, Inc., since November 2008 and February 2012, respectively;
Chairman of the Board and Director, TAM UK International Holdings Limited, since July 2021; formerly
Chairman of the Board and Director, Threadneedle Asset Management Holdings, Sàrl, March 2013 –
December 2022 and December 2008 – December 2022, respectively; senior executive of various entities
affiliated with Columbia Threadneedle Investments.
|
Christopher O. Petersen
5228 Ameriprise Financial Center
Minneapolis, MN 55474
1970
|
Senior Vice President and
Assistant Secretary (2021)
|
Formerly, Trustee/Director of funds within the Columbia Funds Complex, July 1, 2020 - November 22,
2021; Senior Vice President and Assistant General Counsel, Ameriprise Financial, Inc., since September
2021 (previously Vice President and Lead Chief Counsel, January 2015 - September 2021); formerly,
President and Principal Executive Officer of the Columbia Funds, 2015 - 2021; officer of Columbia Funds
and affiliated funds, since 2007.
|
Thomas P. McGuire
290 Congress Street
Boston, MA 02210
1972
|
Senior Vice President and
Chief Compliance Officer
(2012)
|
Vice President – Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief
Compliance Officer, Columbia Acorn/Wanger Funds, since December 2015; formerly, Chief Compliance
Officer, Ameriprise Certificate Company, September 2010 – September 2020.
|
Ryan C. Larrenaga
290 Congress Street
Boston, MA 02210
1970
|
Senior Vice President (2017),
Chief Legal Officer (2017),
and Secretary (2015)
|
Vice President and Chief Counsel, Ameriprise Financial, Inc., since August 2018 (previously Vice President
and Group Counsel, August 2011 - August 2018); Chief Legal Officer, Columbia Acorn/Wanger Funds,
since September 2020; officer of Columbia Funds and affiliated funds, since 2005.
|
Michael E. DeFao
290 Congress Street
Boston, MA 02210
1968
|
Vice President (2011) and
Assistant Secretary (2010)
|
Vice President and Chief Counsel, Ameriprise Financial, Inc., since May 2010; Vice President, Chief Legal
Officer and Assistant Secretary, Columbia Management Investment Advisers, LLC, since October 2021
(previously Vice President and Assistant Secretary, May 2010 – September 2021).
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
47
Directors and Officers (continued)
(Unaudited)
Fund officers (continued)
Name,
address and
year of birth
|
Position and year
first appointed to
position for any Fund
in the Columbia
Funds Complex or a
predecessor thereof
|
Principal occupation(s) during past five years
|
Lyn Kephart-Strong
5903 Ameriprise Financial Center
Minneapolis, MN 55474
1960
|
|
Vice President, Global Investment Operations Services, Columbia Management Investment Advisers, LLC,
since 2010; President, Columbia Management Investment Services Corp., since October 2014; President,
Ameriprise Trust Company, since January 2017.
|
48
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2023
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Columbia Seligman Premium Technology Growth Fund, Inc.
290 Congress Street
Boston, MA 02210
You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. You can obtain the Fund’s most recent periodic reports and other regulatory filings by contacting your financial advisor or Equiniti Trust Company,
LLC at 866.666.1532 or 6201 15th Avenue, Brooklyn, NY 11219. These reports and other filings can also be found on the Securities and Exchange Commission’s EDGAR Database. You should read these reports and other filings carefully before investing.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group
of companies. All rights reserved.
© 2024 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Item 2. Code of Ethics.
The registrant has adopted a code of ethics (the “Code”) that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. During the period covered by this report, there were not any amendments to a provision of the Code that relates to any element of the code of ethics definition enumerated in paragraph (b) of Item 2 of Form N-CSR. During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the Code that relates to one or more of the items set forth in paragraph (b) of Item 2 of Form N-CSR. A copy of the Code is attached hereto.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Directors has determined that Brian J. Gallagher, Sandra L. Yeager, Douglas A. Hacker and David Moffett, each of whom are members of the registrant’s Board of Directors and Audit Committee, each qualify as an audit committee financial expert. Mr. Gallagher, Ms. Yeager, Mr. Hacker and Mr. Moffett are each independent directors, as defined in paragraph (a)(2) of this item’s instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the registrant whose report to stockholders is included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended December 31, 2023 and December 31, 2022 are approximately as follows:
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2023
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2022
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$50,500
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$49,500
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Audit Fees include amounts related to the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended December 31, 2023 and December 31, 2022 are approximately as follows:
Audit-Related Fees, if any, include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above.
During the fiscal years ended December 31, 2023 and December 31, 2022, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended December 31, 2023 and December 31, 2022 are approximately as follows:
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2023
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2022
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$12,900
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$16,300
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Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning.
During the fiscal years ended December 31, 2023 and December 31, 2022, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended December 31, 2023 and December 31, 2022 are approximately as follows:
All Other Fees, if any, include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended December 31, 2023 and December 31, 2022 are approximately as follows:
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2023
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2022
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$557,000
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$535,000
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In both fiscal years 2023 and 2022, All Other Fees primarily consist of fees billed for internal control examinations of the registrant’s transfer agent and investment adviser.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant’s Audit Committee is required to pre-approve the engagement of the registrant’s independent auditors to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser (the “Adviser”) or any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (a “Control Affiliate”) if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Auditors for Audit and Non-Audit Services (the “Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant (“Fund Services”); (ii) non-audit services to the registrant’s Adviser and any Control Affiliates, that relates directly to the operations and financial reporting of a Fund (“Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the registrant’s Adviser and its Control Affiliates. A service will require specific pre-approval by the Audit Committee if it is to be provided by the Fund’s independent auditor; provided, however, that pre-approval of non-audit services to the Fund, the Adviser or Control Affiliates may be waived if certain de minimis requirements set forth in the SEC’s rules are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee's responsibilities with respect to the pre-approval of services performed by the independent auditor may not be delegated to management.
On an annual basis, at a regularly scheduled Audit Committee meeting, the Fund’s Treasurer or other Fund officer shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to specific pre-approval. This schedule will provide a description of each type of service that is subject to specific pre-approval, along with total projected fees for each service. The pre-approval will generally cover a one-year period. The Audit Committee will review and approve the types of services and the projected fees for the next one-year period and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. This specific approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform and the projected fees for each service.
The Fund’s Treasurer or other Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services provided since the last such report was rendered, including a description of the services, by category, with forecasted fees for the annual reporting period, proposed changes requiring specific pre-approval and a description of services provided by the independent auditor, by category, with actual fees during the current reporting period.
*****
(e)(2) None, or 0%, of the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund or affiliated entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal year ended December 31, 2023 and December 31, 2022 are approximately as follows:
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2023
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2022
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$569,900
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$551,300
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(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
(i) Not applicable.
(j) Not applicable.
Item 5. Audit Committee of Listed Registrants.
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(a)
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The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A). Brian J. Gallagher, Sandra L. Yeager, Douglas A. Hacker and David Moffett are each independent directors and collectively constitute the entire Audit Committee.
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Item 6. Investments
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(a)
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The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
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Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Proxy Voting Policies and Procedures
General. The Funds have delegated to the Investment Manager the responsibility to vote proxies relating to portfolio securities held by the Funds, including Funds managed by subadvisers. In deciding to delegate this responsibility to the Investment Manager, the Board reviewed the policies adopted by the Investment Manager. These included the procedures that the Investment Manager follows when a vote presents a conflict between the interests of the Funds and their shareholders and the Investment Manager and its affiliates.
The Investment Manager’s policy is to vote all proxies for Fund securities in a manner considered by the Investment Manager to be in the best economic interests of its clients, including the Funds, without regard to any benefit or detriment to the Investment Manager, its employees or its affiliates. The best economic interests of clients is defined for this purpose as the interest of enhancing or protecting the value of client accounts, considered as a group rather than individually, as the Investment Manager determines in its discretion. The Investment Manager endeavors to vote all proxies of which it becomes aware prior to the vote deadline; provided, however, that in certain circumstances the Investment Manager may refrain from voting securities. For instance, the Investment Manager may refrain from voting foreign securities if it determines that the costs of voting outweigh the expected benefits of voting and typically will not vote securities if voting would impose trading restrictions.
The Board may, in its discretion, vote proxies for the Funds. For instance, the Board may determine to vote on matters that may present a material conflict of interest to the Investment Manager. In addition, the Board may instruct the Investment Manager to vote in accordance with guidelines approved by the Board.
Oversight.
The operation of the Investment Manager’s proxy voting policy and procedures is overseen by a group of representatives from the Investment Manager and its advisory affiliates. Oversight of the Investment Manager’s proxy voting is also provided by a committee within the Investment Manager comprised of portfolio managers and research analysts. The Board reviews on an annual basis, or more frequently as determined appropriate, the Investment Manager’s administration of the proxy voting process.
Corporate Governance and Proxy Voting Guidelines (the Guidelines). The Investment Manager has adopted the Guidelines, which set out voting stances on key issues and the broad principles shaping its approach, as well as the types of related voting action the Investment Manager may take. The Guidelines also provide indicative examples of key guidelines used in any given region, which illustrate the standards against which voting decisions are considered. The Investment Manager has developed voting stances that align with the Guidelines and will generally vote in accordance with such voting stances. The Investment Manager may determine to vote differently from the voting stances on particular proposals in the event it determines that doing so is in the clients’ best economic interests. The Investment Manager may consider the voting recommendations of analysts, portfolio managers, subadvisers and information obtained from outside resources, including one or more third party research providers. When proposals are not covered by the voting stances or a voting determination must be made on a case-by-case basis, a portfolio manager or analyst will make the voting determination based on his or her determination of the clients’ best economic interests.
Addressing Conflicts of Interest. The Investment Manager seeks to address potential material conflicts of interest by voting in accordance with predetermined voting stances. In addition, if the Investment Manager determines that a material conflict of interest exists, the Investment Manager will invoke one or more of the following conflict management practices: (i) causing the proxies to be voted in accordance with the recommendations of an independent third party (which may be the Investment Manager’s proxy voting administrator or research provider); (ii) causing the proxies to be delegated to an independent third party (which may be the Investment Manager’s proxy voting administrator or research provider); and (iii) in infrequent cases, forwarding the proxies to an Independent Director authorized to vote the proxies for the Funds. A member of the governing body responsible for overseeing proxy voting is prohibited from voting on any proposal for which he or she has a conflict of interest by reason of a direct relationship with the issuer or other party affected by a given proposal. Persons making recommendations are required to disclose any relationship with a party making a proposal or other matter known to the person that would create a potential conflict of interest.
Voting Proxies of Affiliated Underlying Funds. Certain Funds may invest in shares of other Columbia Funds (referred to in this context as “underlying funds”) and may own substantial portions of these underlying funds. If such Funds are in a master-feeder structure, the feeder fund will either seek instructions from its shareholders with regard to the voting of proxies with respect to the master fund’s shares and vote such proxies in accordance with such instructions or vote the shares held by it in the same proportion as the vote of all other master fund shareholders. With respect to Funds that hold shares of underlying funds other than in a master-feeder structure, the holding Funds will typically vote proxies of the underlying funds in the same proportion as the vote of all other holders of the underlying fund’s shares, unless the Board otherwise instructs.
Proxy Voting Agents. The Investment Manager has retained Institutional Shareholder Services Inc., a third-party vendor, as its proxy voting administrator to implement its proxy voting process and to provide recordkeeping and vote disclosure services. Typically, Institutional Shareholder Services Inc. populates ballots for issuers deemed to present potential material conflicts of interest in accordance with predetermined voting stances, as described above under Addressing Conflicts of Interest. The Investment Manager has retained both Institutional Shareholder Services Inc. and Glass Lewis & Company, LLC to provide proxy research services.
Additional Information. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds’ website at columbiathreadneedleus.com and/or (ii) on the SEC’s website at www.sec.gov.
A copy of the current Guidelines is filed.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Portfolio Managers
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Portfolio Manager
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Title
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Role with the Corporation
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Managed the Corporation Since
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Paul Wick
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Portfolio Manager
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Lead Portfolio Manager
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2009
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Braj Agrawal
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Portfolio Manager
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Co-Portfolio Manager
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2010
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Jeetil Patel
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Portfolio Manager
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Technology Team Member
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2015
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Christopher Boova
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Portfolio Manager
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Co-Portfolio Manager
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2016
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Vimal Patel
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Portfolio Manager
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Technology Team Member
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2018
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Shekhar Pramanick
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Portfolio Manager
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Technology Team Member
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2018
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Mr. Wick joined one of the Columbia Management legacy firms or acquired business lines in 1987. Mr. Wick is Team Leader and Portfolio Manager for the Columbia Seligman Technology strategies. Mr. Wick began his investment career in 1987 and earned a B.A. from Duke and an M.B.A. from Duke’s Fuqua School of Business.
Mr. Agrawal joined one of the Columbia Management legacy firms or acquired business lines in 2010. Mr. Agrawal began his investment career in 2001 and earned a B.A. in Economics from the University of Illinois at Urbana-Champaign and an M.B.A. from University of Minnesota’s Carlson School.
Mr. Jeetil Patel joined the Investment Manager in 2012. Mr. Patel began his investment career in 1998 and earned a B.A. from University of California, Los Angeles.
Mr. Boova joined one of the Columbia Management legacy firms or acquired business lines in 2000. Mr. Boova began his investment career in 1995 and earned two B.S. degrees from Worcester Polytechnic Institute, an M.A. from Georgetown University and an M.B.A. from the Wharton School at the University of Pennsylvania.
Dr. Pramanick joined the Investment Manager in 2012. Dr. Pramanick began his investment career in 1993 and earned a B.S. from the National Institute of Technology, an M.S. from the University of Oregon and a Ph.D. from North Carolina State University.
Mr. Vimal Patel joined the Investment Manager in 2014. Mr. Patel began his investment career in 2001 and earned a B.S. from North Carolina State University, an M.S. from the University of Colorado, Boulder, and an M.B.A. from the Anderson School of Management at the University of California, Los Angeles.
Other Accounts Managed by the Portfolio Managers:
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Fund
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Portfolio Manager
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Other Accounts Managed
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Performance Based Accounts**
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Ownership of Fund Shares
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Number and type of account*
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Approximate Total Net Assets
(excluding the fund)
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For fiscal period ending December 31, 2022, unless otherwise noted
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Columbia Seligman Premium Technology Growth
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Paul Wick
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4 RICs
3 PIVs
8 Other accounts
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$13.82 billion
$1.94 billion
$1.73 billion
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2 PIVs -$998.01M
1 Other Account – $182.78M
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None
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Braj Agrawal
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15 Other accounts
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$1.45 million
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None
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None
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Jeetil Patel
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1 RIC
10 Other accounts
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$11.50 billion
$6.54 million
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None
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None
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Christopher Boova
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2 RICs
6 Other accounts
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$2.28 billion
$6.77 million
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None
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None
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Vimal Patel
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3 RICs
8 Other accounts
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$13.79 billion
$6.36 million
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None
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None
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Shekhar Pramanick
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4 RICs
6 Other accounts
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$13.82 billion
$14.05 million
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None
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None
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* RIC refers to a Registered Investment Company
** Number and type of accounts for which the advisory fee paid is based in part or wholly on performance and the aggregate net assets in those accounts.
Potential Conflicts of Interest:
Columbia Management: Like other investment professionals with multiple clients, a Fund’s portfolio manager(s) may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same time. The Investment Manager and the Funds have adopted compliance policies and procedures that attempt to address certain of the potential conflicts that portfolio managers face in this regard. Certain of these conflicts of interest are summarized below.
The management of funds or other accounts with different advisory fee rates and/or fee structures, including accounts, such as the Investment Manager’s hedge funds, that pay advisory fees based on account performance (performance fee accounts), may raise potential conflicts of interest for a portfolio manager by creating an incentive to favor accounts that pay higher fees, including performance fee accounts, such that the portfolio manager may have an incentive to allocate attractive investments disproportionately to performance fee accounts.
Similar conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those accounts. When the Investment Manager determines it necessary or appropriate in order to ensure compliance with restrictions on joint transactions under the 1940 Act, a Fund may not be able to invest in privately-placed securities in which other accounts advised by the Investment Manager using a similar style, including performance fee accounts, are able to invest, even when the Investment Manager believes such securities would otherwise represent attractive investment opportunities. As a general matter and subject to the Investment Manager’s Code of Ethics and certain limited exceptions, including for investments in the Investment Manager’s hedge funds, the Investment Manager’s investment professionals do not have the opportunity to invest in client accounts, other than the Funds.
A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those Funds and/or accounts. The effects of this potential conflict may be more pronounced where Funds and/or accounts managed by a particular portfolio manager have different investment strategies.
A portfolio manager may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Funds. A portfolio manager’s decision as to the selection of broker/dealers could produce disproportionate costs and benefits among the Funds and the other accounts the portfolio manager manages.
A potential conflict of interest may arise when a portfolio manager buys or sells the same securities for a Fund and other accounts. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, the Investment Manager’s trading desk may, to the extent consistent with applicable laws and regulations, aggregate the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to a Fund or another account if a portfolio manager favors one account over another in allocating the securities bought or sold. The Investment Manager and its Participating Affiliates may coordinate their trading operations for certain types of securities and transactions pursuant to personnel-sharing agreements or similar intercompany arrangements. However, typically the Investment Manager does not coordinate trading activities with a Participating Affiliate with respect to accounts of that Participating Affiliate unless such Participating Affiliate is also providing trading services for accounts managed by the Investment Manager. Similarly, a Participating Affiliate typically does not coordinate trading activities with the Investment Manager with respect to accounts of the Investment Manager unless the Investment Manager is also providing trading services for accounts managed by such Participating Affiliate. As a result, it is possible that the Investment Manager and its Participating Affiliates may trade in the same instruments at the same time, in the same or opposite direction or in different sequence, which could negatively impact the prices paid by the Fund on such instruments. Additionally, in circumstances where trading services are being provided on a coordinated basis for the Investment Manager’s accounts (including the Funds) and the accounts of one or more Participating Affiliates in accordance with applicable law, it is possible that the allocation opportunities available to the Funds may be decreased, especially for less actively traded securities, or orders may take longer to execute, which may negatively impact Fund performance.
“Cross trades,” in which a portfolio manager sells a particular security held by a Fund to another account (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Investment Manager and the Funds have adopted compliance procedures that provide that any transactions between a Fund and another account managed by the Investment Manager are to be made at a current market price, consistent with applicable laws and regulations.
Another potential conflict of interest may arise based on the different investment objectives and strategies of a Fund and other accounts managed by its portfolio manager(s). Depending on another account’s objectives and other factors, a portfolio manager may give advice to and make decisions for a Fund that may differ from advice given, or the timing or nature of decisions made, with respect to another account. A portfolio manager’s investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security for certain accounts, and not for a Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one or more other accounts are selling the security (including short sales). There may be circumstances when a portfolio manager’s purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts, including the Funds.
To the extent a Fund invests in underlying funds, a portfolio manager will be subject to additional potential conflicts of interest. Because of the structure of funds-of-funds, the potential conflicts of interest for the portfolio managers may be different than the potential conflicts of interest for portfolio managers who manage other Funds. The Investment Manager and its affiliates may receive higher compensation as a result of allocations to underlying funds with higher fees.
A Fund’s portfolio manager(s) also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which the Investment Manager’s portfolio managers are subject are essentially the same or similar to the potential conflicts of interest related to the investment management activities of the Investment Manager and its affiliates.
In addition, a portfolio manager’s responsibilities may include working as a securities analyst. This dual role may give rise to conflicts with respect to making investment decisions for accounts that he/she manages versus communicating his/her analyses to other portfolio managers concerning securities that he/she follows as an analyst.
Structure of Compensation:
Portfolio manager compensation is typically comprised of (i) a base salary and (ii) an annual cash bonus. The annual cash bonus, and in most instances the base salary, are paid from a team compensation pool that is based on fees and performance of the accounts managed by the portfolio management team, which might include mutual funds, wrap accounts, institutional portfolios and hedge funds.
The percentage of management fees on mutual funds that fund the bonus pool is based on the short term (typically one-year) and long-term (typically three-year and five-year) performance of those accounts in relation to the relevant peer group universe.
The pool is also funded by a percentage of the management fees on long-only institutional separate accounts, that percentage being based on the source of the account in question, and by a fixed percentage of management fees on hedge funds and separately managed accounts that follow a hedge fund mandate.
The percentage of performance fees on hedge funds and separately managed accounts that follow a hedge fund mandate that fund the bonus pool is based on the absolute level of each hedge fund’s current year investment return.
For all employees the benefit programs generally are the same and are competitive within the financial services industry. Employees participate in a wide variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
(1) For the year ended December 31, 2023, under the terms of its stock repurchase program, the registrant did not repurchase any of its shares of common stock.
(2a) The registrant's current stock repurchase program, which is reviewed at least annually by the registrant’s Board of Directors, was first approved by the registrant’s Board of Directors in 2009.
(2b) Provided that the criteria for share repurchases are met under the registrant’s stock repurchase program, there is no limit to the number of shares the registrant can repurchase.
(2c) The registrant’s stock repurchase program has no expiration date.
(2d) Not applicable
(2d) Not applicable
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
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(a)
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The registrant’s principal executive officer and principal financial officer, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
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(b)
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There was no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 14. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
(c) Corporate Governance and Proxy Voting Guidelines
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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(registrant) |
Columbia Seligman Premium Technology Growth Fund, Inc |
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By (Signature and Title) |
/s/ Daniel J. Beckman |
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Daniel J. Beckman, President and Principal Executive Officer |
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Date |
February 22, 2024 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By (Signature and Title) |
/s/ Daniel J. Beckman |
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Daniel J. Beckman, President and Principal Executive Officer |
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Date |
February 22, 2024 |
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By (Signature and Title) |
/s/ Michael G. Clarke |
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Michael G. Clarke, Chief Financial Officer, |
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Principal Financial Officer and Senior Vice President |
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Date |
February 22, 2024 |
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By (Signature and Title) |
/s/ Joseph Beranek |
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Joseph Beranek, Treasurer, Chief Accounting |
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Officer and Principal Financial Officer |
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Date |
February 22, 2024 |
Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
COLUMBIA FUNDS
WANGER ADVISORS TRUST / COLUMBIA ACORN TRUST
Applicable Regulatory Authority |
Section 406 of the Sarbanes-Oxley Act of 2002; |
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Item 2 of Form N-CSR |
Related Policies |
Overview and Implementation of Compliance Program |
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Policy |
Requires Annual Board Approval |
No but Covered Officers Must provide annual |
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certification |
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Last Reviewed by AMC |
September 2023 |
Overview and Statement
Item 2 of Form N-CSR, the form used by registered management investment companies to file certified annual and semi-annual shareholder reports, requires a registered management investment company to disclose:
•Whether it has adopted a code of ethics that applies to the investment company's principal executive officer and senior financial officers and, if it has not adopted such a code of ethics, why it has not done so; and
•Any amendments to, or waivers from, the code of ethics relating to such officers.
The Boards (the Board of the Columbia Funds ("Columbia Board") and the Boards of the Columbia Acorn Trust ("CAT") and the Wanger Advisors Trust ("WAT") (collectively, "Columbia Acorn Board" and together with the Columbia Board, the "Boards") have adopted the following Code of Ethics for Principle Executive and Senior Financial Officers (the "Code"), which sets forth the ethical standards to which the Funds holds their principal executive officer and each of its senior financial officers.
This Code should be read and interpreted in conjunction with the Overview and Implementation of Compliance Program Policy.
Policy The Boards have adopted the Code in order to comply with applicable regulatory requirements as outlined below:
I.Covered Officers/Purpose of the Code
This Code applies to the Fund's Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer or Controller (the "Covered Officers") for the purpose of promoting:
•Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
•Full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with, or submits to, the SEC, and in other public communications made by the Fund;
•Compliance with applicable laws and governmental rules and regulations;
•The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
•Accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual or apparent conflicts of interest.
II.Administration of the Code
The Boards have designated an individual to be primarily responsible for the administration of the Code (the "Code Officer"). In the absence of the Code Officer, his or her designee shall serve as the Code Officer, but only on a temporary basis.
The Boards have designated a person who meets the definition of a Chief Legal Officer (the "CLO") for purposes of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder as the Fund's CLO. The CLO of the Fund shall assist the Fund's Code
Officer in administration of this Code. The Code Officer, in consultation with the CLO, shall be responsible for applying this Code to specific situations (in consultation with Fund counsel, where appropriate) and has the authority to interpret this Code in any particular situation.
III.Managing Conflicts of Interest
A "conflict of interest" occurs when a Covered Officer's personal interest interferes with the interests of, or his or her service to, the Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of the Covered Officer's position with the Fund. Certain provisions in the 1940 Act and the rules and regulations thereunder and the Advisers Act and the rules and regulations thereunder govern certain conflicts of interest that arise out of the relationships between Covered Officers and the Fund. If such conflicts are addressed in conformity with applicable provisions of the 1940 Act and the Advisers Act, they will be deemed to have been handled ethically. The Fund's and its Adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of those provisions. This Code does not, and is not intended to, repeat or replace those programs and procedures, and conduct that is consistent with such programs and procedures falls outside of the parameters of this Code.
Although they do not typically present an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationships between the Fund and, as applicable, its Adviser (Columbia Management Investment Advisers, LLC
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
("CMIA") for the Columbia Funds and Columbia Wanger Asset Management, LLC ("CWAM") for the WAT / CAT Funds), administrator, principal underwriter, pricing and bookkeeping agent and/or transfer agent (each, a "Primary Service Provider") of which the Covered Officers are also officers or employ ees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund or for a Primary Service Provider, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Primary Service Providers and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationships between the Fund and the Primary Service Providers and is consistent with the performance by the Covered Officers of their duties as officers of the Fund . If such conflicts are addressed in conformity with applicable provisions of the 1940 Act and the Advisers Act, they will be deemed to have been handled ethically. In addition, it is recognized by the Boards of the Funds that the Covered Officers also may be officers or employees of one or more other investment companies or organizations affiliated with the sponsor of the Funds covered by other similar codes and that the codes of ethics of those other investment companies or organizations will apply to the Covered Officers acting in such capacities for such other investment companies.
This Code covers general conflicts of interest and other issues applicable to the Funds under the Sarbanes-Oxley Act of 2002. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interests of the Funds. Certain examples of such conflicts of interest follow.
Each Covered Officer must:
•Not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Co vered Officer, or a member of his or her family, would knowingly benefit personally to the detriment of the Fund;
•Not knowingly cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer, or a member of his or her family, rather than the benefit of the Fund;
•Not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; and
•Report at least annually (or more frequently, as appropriate) known a ffiliations or other relationships that may give rise to conflicts of interest with respect to the Fund.
If a Covered Officer believes that he or she has a potential conflict of interest that is likely to materially compromise his or her objectivity or his or her ability to perform the duties of his or her role as a Covered Officer, including a potential conflict of interest that arises out of his or her responsibilities as an officer or employee of one or more Primary
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
Service Providers or other funds, he or she should consult with the Code Officer, the CLO, the Fund's outside counsel, or counsel to the Independent Board Members, as appropriate.
Examples of potential conflicts of interest that may materially compromise objectivity or ability to perform the duties of a Covered Officer and which the Covered Officer should consider discussing with the Code Officer or other appropriate person include:
•Service as a director on the board of a public or private company or service as a public official;
•The receipt of a non-de minimus gift when the gift is in relation to doing business directly or indirectly with the Fund;
•The receipt of entertainment from any company with which the Fund has current or prospective business dealings, unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;
•An ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than the Primary Service Providers or any affiliated person thereof; and
•A direct or indirect material financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership.
IV. Disclosure and Compliance
It is the responsibility of each Covered Officer:
•To familiarize himself or herself with the disclosure requirements ge nerally applicable to the Fund, as well as the business and financial operations of the Fund;
•To not knowingly misrepresent, and to not knowingly cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund's Board, Legal Counsel, Independent Legal Counsel and auditors, and to governmental regulators and self -regulatory organizations;
•To the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Fund and the Primary Service Providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and
•To adhere to and, within his or her area of responsibility, promote compliance with the standards and restrictions imposed by applicable laws, rules and regulation s.
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
V.Reporting and Accountability by Covered Officers Each Covered Officer must:
•Upon adoption of the Code or becoming a Covered Officer, acknowledge in writing to the Fund's Board that he or she has received, read and understands the Code, using the form attached as Appendix A hereto;
•Annually thereafter acknowledge in writing to the Fund's Boa rd that he or she has received and read the Code and believes that he or she has complied with the requirements of the Code, using the form attached as Appendix B hereto;
•Not retaliate against any employee or Covered Officer for reports of potential violations that are made in good faith; and
•Notify the Code Officer promptly if he or she knows of any violation, or of conduct that reasonably could be expected to be or result in a violation, of this Code. Failure to do so is a violation of this Code.
The Fund will follow the policy set forth below in investigating and enforcing this Code:
•The Code Officer will endeavor to take all appropriate action to investigate any potential violation reported to him or her;
•If, after such investigation, the Code Officer believes that no violation has occurred, the Code Officer will so notify the person(s) reporting the potential violation, and no further action is required;
•Any matter that the Code Officer, upon consultation with the CLO, believes is a violation will be reported by the Code Officer or the CLO to the Fund's Audit
Committee;
•The Fund's Audit Committee will be responsible for granting waivers, as appropriate; and
•This Code and any changes to or waivers of the Code will, to the extent required, be disclosed as provided by SEC rules.
VI. Other Policies
This Code shall be the sole code of ethics adopted by the Fund for the purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered management investment companies thereunder. Insofar as other policies or procedures of the Fund or the Fund's Primary Service Providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they conflict with the provisions of this Code. The Fund's and its Adviser's and principal underwriter's codes of ethics under Rule 17j-1 under the 1940 Act and the more detailed policies and procedures of the
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
Primary Service Providers as set forth in their respect Compliance Manuals are separate requirements applicable to the Covered Officers and are not part of this Code.
VII. Disclosure of Amendments to the Code
Any amendments will, to the extent required, be disclosed in accordance with law.
VIII. Confidentiality
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code or upon advice of counsel, such reports and rec ords shall not be disclosed to anyone other than the Fund's Board, the Covered Officers, the Code Officer, the CLO, the Fund's Primary Service Providers and their aff iliates, and outside audit firms, legal counsel to the Fund and legal counsel to the Indep endent Board Members.
IX. Internal Use
The Code is intended solely for the internal use by the Fund and does not constitute an admission, by or on behalf of the Fund, as to any fact, circumstance, or legal conclusion.
Reporting Requirements
Each Covered Officer must annually acknowledge in writing to the Fund's Board that he or she has received and read the Code and believes that he or she has complied with the requirements of the Code, using the form attached as Appendix II hereto .
The Code Officer or CLO shall report to the Fund's Audit Committee any violations of, or material issues arising under, this Code.
If the Audit Committee concurs that a violation has occurred , it will inform and make a recommendation to the Fund's Board, which will consider appropriate action, which may include review of, and appropriate modifications to: Applicable policies and procedures; Notification to the appropriate personnel of the Fund's Primary Service Providers or their boards; A recommendation to censure, suspend or dismiss the Covered Officer; or Referral of the matter to the appropriate authorities for civil action or criminal prosecution .
All material amendments to this Code must be in writing and approved or ratified by the Fund's Board, including a majority of the Independent Board Members.
The Code Officer, in conjunction with the CLO, shall be responsible for administration of this Code and for adopting procedures to ensure compliance with the requirements set forth herein.
Any issues that arise under this policy should be communicated to an employee's immediate supervisor, and appropriately escalated to AMC. Additionally, AMC will escalate any compliance issues relating to this Code to the Fund CCO and, if warranted, the appropriate Fund Board.
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Fund Policy: Code of Ethics for Principal Executive & Senior Financial Officers
Monitoring/Oversight/Escalation
The Code Officer shall be responsible for oversight of compliance with this Code by the Covered Officers. AMC and Ameriprise Risk & Control Services may perform periodic reviews and assessments of various lines of business, including their compliance with this Code.
Recordkeeping
All records must be maintained for at least seven years, the first three in the appropriate Ameriprise Financial, Inc. management office. The following records will be maintained to evidence compliance with this Code: (1) a copy of the information or materials supplied to the Audit Committee or the Board: (i) that provided the basis for any amendment or waiver to this Code; and (ii) relating to any violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the Audit Committee and/or Board; (2) a copy of the policy and any amendments; and (3) a list of Covered Officers and reporting by Covered Officers.
This document is current as of the last review date but subject to change thereafter. Please consult the online version to verify that this Fund Policy has not been updated or otherwise changed. This Fund Policy is the property of the Funds and must not be provided to any external party without express prior consent from the Fund CCO.
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Appendix A
INITIAL ACKNOWLEDGEMENT
Iacknowledge that I have received and read a copy of the Code of Ethics for Principal Executive and Senior Financial Officers (the "Code") and that I understand it. I further acknowledge that I am responsible for understanding and complying with the policies set forth in the Code during my tenure as a Covered Officer, as defined in the Code.
I have set forth below (and on attached sheets of paper, if necessary) all known affiliations or other relationships that may give rise to conflicts of interest for me with respect to the Fund.
______________________________________________________________
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I also acknowledge my responsibility to report any known violation of the Code to the Code Officer, the CLO, the Fund's outside counsel, or counsel to the Ind ependent Board Members, all as defined in this Code. I further acknowledge that the policies contained in the Code are not intended to create any contractual rights or obligations, express or implied. I also understand that, consistent with applicable law, the Fund has the right to amend, interpret, modify or withdraw any of the provisions of the Code at any time in its sole discretion, with or without notice.
Covered Officer Name and Title: _____________________________________________
(please print)
________________________________________________________________________
Please return this completed form to the CLO (_______) within one week from the date of your review of these documents. Thank you!
Appendix B
ANNUAL ACKNOWLEDGEMENT
Iacknowledge that I have received and read a copy of the Code of Ethics for Principal Executive and Senior Financial Officers (the "Code") and that I understand it. I further acknowledge that I am responsible for understanding and complying with the policies set forth in the Code during my tenure as a Covered Officer, as defined in the Code.
I also acknowledge that I believe that I have fully complied with the terms and provisions of the Code during the period of time since the most recent Initial or Annual Acknowledgement provided by me except as described below.
______________________________________________________________
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I have set forth below (and on attached sheets of paper, if necessary) all known affiliations or other relationships that may give rise to conflicts of interest for me with respect to the Fund.1
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I further acknowledge that the policies contained in the Code are not intended to create any contractual rights or obligations, express or implied. I also understand that, consistent with applicable law, the Fund has the right to amend, interpret, modify or withdraw any of the provisions of the Code at any time in its sole discretion, with or without notice.
Covered Officer Name and Title: _____________________________________________
(please print)
________________________________________________________________________
Please return this completed form to the CLO (_______) within one week from the date of your receipt of a request to complete and return it. Thank you!
1It is acceptable to refer to affiliations and other relationships previously disclosed in prior Initial or Annual Acknowledgements without setting forth such affiliations and relationships again.
I, Daniel J. Beckman, certify that:
1.I have reviewed this report on Form N-CSR of Columbia Seligman Premium Technology Growth Fund, Inc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 22, 2024 |
/s/ Daniel J. Beckman |
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Daniel J. Beckman, President and Principal |
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Executive Officer |
I, Michael G. Clarke, certify that:
1.I have reviewed this report on Form N-CSR of Columbia Seligman Premium Technology Growth Fund, Inc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 22, 2024 |
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/s/ Michael G. Clarke |
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Michael G. Clarke, Chief Financial Officer, Principal |
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Financial Officer and Senior Vice President |
I, Joseph Beranek, certify that:
1.I have reviewed this report on Form N-CSR of Columbia Seligman Premium Technology Growth Fund, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control
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over financial reporting to be designed under our supervision, to provide reasonable |
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assurance regarding the reliability of financial reporting and the preparation of financial |
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statements for external purposes in accordance with generally accepted accounting |
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principles; |
(c ) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and |
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presented in this report our conclusions about the effectiveness of the disclosure controls |
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and procedures, as of a date within 90 days prior to the filing date of this report based on |
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such evaluation; and |
(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 22, 2024 |
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/s/ Joseph Beranek |
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Joseph Beranek, Treasurer, Chief Accounting |
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Officer and Principal Financial Officer |
CERTIFICATION PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Certified Shareholder Report of Columbia Seligman Premium Technology Growth Fund, Inc (the “Trust”) on Form N-CSR for the period ending December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (“the Report”), the undersigned hereby certifies that, to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.
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Date: February 22, 2024 |
/s/ Daniel J. Beckman |
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Daniel J. Beckman, President and Principal Executive Officer |
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Date: February 22, 2024 |
/s/ Michael G. Clarke |
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Michael G. Clarke, Chief Financial Officer, |
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Principal Financial Officer and Senior Vice President |
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Date: February 22, 2024 |
/s/ Joseph Beranek |
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Joseph Beranek, Treasurer, Chief Accounting |
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Officer and Principal Financial Officer |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the “Commission”) or its staff upon request.
This certification is being furnished to the Commission solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Form N-CSR with the Commission.
Governance Guidelines (CGG)
Corporate
Governance Guidelines (CGG)
January 2024
Corporate Governance Guidelines (CGG)
Contents
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Corporate Governance Guidelines (CGG)
The following guidelines apply to Columbia Threadneedle Investments' client accounts to the extent agreed upon and/or permissible, including voting on behalf of reo® (Responsible Engagement Overlay) service clients, which gives investors access to our overall engagement and proxy voting service offering.
As an asset management business, we seek to act in the best economic interests of clients when carrying out our investment activities. Our investment clients are retail and institutional investors, including corporate pension funds.
Our voting guidelines are applied to all listed equity client portfolios. However, our institutional clients always have the right to determine how we vote their securities. We will always comply with those requests.
In addition to these guidelines, general and country-specific
voting guidelines are maintained and applied within the voting process. Voting guidelines provide greater detail on resolutions that will (and will not) be supported and are drawn directly from these Corporate Governance Guidelines.
In executing votes, where companies put forward a strong case for not complying with our voting guidelines, we will take this into account and adjust our vote if we believe the company is acting in the best economic interests of shareholders (and, thus, our clients). We apply our guidelines to client portfolios in a manner that considers our clients' respective investment objectives and best economic interests. This could result in our voting on a matter the same way (or differently) for different clients.
If you wish to clarify anything in these guidelines, please email your relationship manager or the Responsible Investment team at Governance@columbiathreadneedle.com . The Responsible Investment team is responsible for and reviews this document annually.
Note: The following guidelines do not apply to Pyrford International Limited.
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Corporate Governance Guidelines (CGG)
1Overview of key principles and approach
Well governed companies are better positioned to manage risks, identify opportunities, and deliver sustainable growth and returns for our clients. These guidelines establish a consistent philosophy and approach to corporate governance and the exercise of voting rights. The approach is based on the overarching principles of:
⬛An empowered and effective board and management team;
⬛Appropriate checks and balances in company manageme nt structures;
⬛Effective systems of internal control and risk management covering all material risks, including environmental, social and corporate governance (ESG) issues;
⬛A commitment to promoting throughout the company a culture of transparency and accountability that is grounded in sound business ethics;
⬛Compensation policies that reward the creation of long-term shareholder value through the achievement of corporate objectives; and
⬛A commitment to protecting the rights and interests of all.
We recognize that such principles may be expressed differently in different markets. Therefore, our voting policies take account of local practices and are applied in a pragmatic fashion that
reflects an integrated understanding oflocal and international
good practice. In all cases, we aim to achieve the same result: the preservation and enhancement of long-term shareholder value through management accountability and transparency
in reporting.
We also recognize that companies are not homogeneous and some variation in governance structures and practice is to be expected. Achieving best practice in corporate governance is a dynamic process between the board, management, and shareholders.
We encourage companies to engage in the process of shaping and meeting evolving standards of best practice. Although our voting is strongly rooted in a clear set of corporate governance principles, we approach each company's case on its merits using our expertise, discretion, and dialogue with companies to do so. For this reason, we encourage companies to contact us with information about any governance practices and challenges unique to the company. When we do not vote with management's or the board's recommendations, we may
choose to inform the company of our voting decision and provide comments to explain the specific concerns with the resolutions
we did not support.
Corporate Governance Guidelines (CGG)
2 Role, structure and operation of boards
We use the term "board" to describe the board of directors and similar supervisory decision-making bodies. The board is ultimately responsible for the management of the company.
This is mainly achieved through the delegation of powers to executive management. The board should receive the report of executive management on the conduct of the business and regularly question management on these matters. However, certain matters should be reserved for the board.
The board is responsible for setting and testing strategy proposed by executive management, determining the risk appetite for the business, ensuring the independence and effectiveness of external audit, and for succession planning of both executive management and the board.
The structure, composition and operation of boards will vary from country to country and company to company. Certain elements of effective boards are universal, and these are detailed below under the following sub-headings:
⬛Roles and independence;
⬛Competence, objectivity and refreshment;
⬛Effective functioning of boards; and
⬛Communication and accountability to shareholders.
Roles and independence
The composition of the board is of the utmost importance. Boards should have meaningful representation of both executive and non-executive directors. Non-executives should be wholly independent of the company, although we recognize that, in certain cases, connected non-executives have a valuable role to play.
The role of the chair and separation of principal roles
The roles ofthe chair and chiefexecutive officer (CEO) are
substantively different and should be separated. We regard separation of the roles as important for securing a proper balance of authority and responsibility between executive management and the board, as well as preserving accountability within the board. If for any reason the roles are combined (e.g., over an unexpected transitional period) this should be explained
and justified in the report and accounts. In all such cases, a
strong senior independent non-executive director should be nominated (i.e., a lead independent director).
Executive directors
Including executives in board meetings is essential to enhance discussion and allow independent directors to gain the fullest understanding of company operations. In markets where customary, we encourage the appointment of key executives
to the board alongside the CEO and the chieffinancial officer
(CFO). The presence of other executives provides additional company knowledge for the board and ensures the board is not solely dependent on the CEO for input relating to the company's operations and strategies. However, the number of executive directors should not outweigh the number of independent non-executives.
Non-executive directors
We assess the number of directorships an individual director holds to ensure they have sufficient time and energy to perform
their role as a non-executive director properly as this is a demanding role. Factors that determine the appropriate number of directorships are the size of the company, its complexity, its circumstances, other commitments that a director has and the results of board evaluation, among others. We consider that holding multiple directorships in large companies can be excessive even for a full-time non-executive director, especially when considering board committee participation. Multiple directorships should be avoided for a full-time executive. For complex
companies, particularly in developed markets, we may vote against non-executive directors who hold more than five directorships.
Proportion of non-executive directors on the board
Difficult decisions that center on the best interest ofshareholders
arise from open and direct interplay between boards and company executives. It is important to have enough independent non-executive directors for an adequate diversity of views and to
fulfil committee membership quotas. We expect all widely-held
companies to have a majority of independent directors.
For companies with controlling shareholders, we expect there to be a minimum of one-third of fully independent directors on the board.
Independence of non-executive directors
Independence of individual directors is valued, but a well- balanced board is valued above all. We will support non- independent directors when they bring skills, sector knowledge and other experience that justify their presence on the board, particularly where the appropriate balance of independence is maintained.
The criteria for the independence of directors draw on a variety of standards, including the Organization for Economic Co-operation and Development (OECD) Principles of Corporate Governance, national corporate governance codes, listing rules, and guidance provided by the International Corporate Governance Network, among others. We favor a principles-based approach, which seeks to ensure that directors can act in the interests of the company and its shareholders. Companies should consider
Corporate Governance Guidelines (CGG)
using the corporate governance report or annual shareholder meeting materials to explain the board evaluation process, and to justify the value that non-independent directors bring to the board.
⬛;
⬛Not have close family ties with the company's advisers, directors or senior employees;
⬛Not serve as a board committee chair if they have served on the board for a period of time that may hinder their independence of thought;
⬛Not hold cross-directorships or have significant links with other directors (see "Interlocking boards" below);
⬛Not be major shareholders or representatives of any special interest group, including government representatives in cases of state ownership or representatives of affiliated companies;
⬛Have no significant commercial involvement with the company as professional advisers, major suppliers or customers;
⬛Not be entitled to performance-related pay, stock options, pensions, or benefit from large donations to charitable causes of their choice;
⬛Not normally hold other directorships in companies in a closely-related industry so as to avoid potential conflicts of interest.
Interlocking boards
We seek to ensure that directors are not only independent from the company, but also of one another. We expect companies to disclose interlocking board relationships and to explain how the independence of individual directors is preserved when directors jointly serve on two or more of the same boards.2
Extensive board service and independence
Prolonged membership on a board jeopardizes independence as directors may become close with management and overly invested in prior strategic decisions. Independence is critical to ensuring shareholders have adequate voice inside the boardroom. After a certain length of board service, directors may not be considered fully independent and it may be inappropriate for such directors to serve on committees, such as the audit committee, where absolute independence is a key requirement.
We recognize that there is no fixed time period where a director
categorically loses independence. Nonetheless, we will leverage
a respective country's own regulatory requirement regarding
independence where specified. In North America, we will assess whether the average board tenure ofthe company is significantly
beyond the respective market's average when considering the
board's overall balance.
Where the appropriate balance of independence is not met, we will analyze whether to support the re-election of long-standing directors.
Independence of employee representatives
While a number of countries have legislation mandating a certain percentage of employee representatives on the board, we do not consider these individuals to be fully independent. Hence, we expect companies domiciled in countries with mandatory co-determination (the process by which employees elect their representatives to the board) or employee representation
to ensure that the board and its committees have adequate representation of truly independent directors.
Competence, objectivity and renewal
Diversity, competencies and perspectives
A relevant and suitably diverse mix of skills and perspectives is critical to the quality of the board and the strategic direction of the company. Companies should therefore strive to widen the pool of potential candidates for board and management roles to ensure they draw on the richest possible combination of competencies and experiences.
In all cases, candidates must be selected for their ability to oversee and enhance long-term company performance. Boards should recruit
members with the appropriate combination of skills and experience, and should affirm the value ofindividual diversity, including
gender, racial, ethnic, national origin, professional background and other relevant factors that may enhance the board's overall performance. As boards cannot be transformed overnight, we look for a statement that sets out the board's approach to promoting diversity at the board, executive management, and company- wide workforce level. We welcome disclosure ofspecific diversity
targets set by the board and subsequent reporting on performance against these targets. Where disclosure is absent and appropriate diversity levels across gender, racial and ethnic representation have not been met, we will normally not support the re-election of nomination committee chairs or other relevant directors.
Re-election of directors
To ensure that it retains an open and critical perspective, the board should be continually refreshed. For this reason, all directors should be required to submit themselves for re-election at regular intervals. We prefer to have all directors standing for annual election to strengthen the accountability of the board to shareholders. Failing that, we encourage the chair of the board, as well as the chairs
of the audit, compensation and nomination committees to stand for annual re-election to strengthen accountability for the core functions of the board. We also believe that a minimum of one-third of board members should stand for election annually.
Nomination of directors
We strongly believe that a board nominating committee composed of a majority of independent non-executive directors is best placed to identify and put forward suitable candidates
2Such interlocking relationships can raise concerns when there is an imbalance of power between the two directors.
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Corporate Governance Guidelines (CGG)
for the board. Shareholders should only put forward candidates where there is clear evidence of ineffective board oversight and unwillingness to correct the problem—or where a cumulative voting system or similar arrangement encourages direct shareholder participation in board nominations. We expect companies to put forward only one candidate for each available position as an indication that the company is clear about the value each director brings to the board. We
encourage companies to specify each candidate's qualifications,
experiences and skills that are of relevance and importance to the board's oversight of company strategy.
Balanced composition
We will consider voting against the chair or members of nominating committees who have not constructed appropriately balanced, independent boards. Indicators include: an over-
reliance on long-standing members;an over-reliance on affiliated
directors; and a lack of appropriate diversity characteristics,
including gender, race, natio nality, ethnicity, etc., that reflect th e
nature, scope and aspirations of the business.
Effective functioning of boards
Board size
In the case of a two-tier board structure, neither board should be large: between five and 10 members typically is appropriate. A unitary board normally should have between five and 15
members. In the case of overly large boards and in the absence of a commitment to reduce board size, we may withhold support from the nominating or corporate governance committee chair unless clear justification has been provided explaining the need for such a large board.
Two-tier boards
We are agnostic as to the merits of a two-tier board as opposed to a unitary board, and we recognize that a two-tier board structure is the norm in many markets. At the same time, we are aware that there can be challenges in communication between a supervisory board and a management board. Where there
is more than one body forming the board, companies should maintain an effective mechanism for the various elements of the board to work together and should explain how this happens. This system should ensure the most effective use is made of all individuals involved so that the company can optimize the unique skills and experiences of their directors.
Board evaluation
Board evaluations are an important tool for improving board performance. All boards should implement an evaluation process that considers the effectiveness of the entire board, its committees, the contributions made by each member, including its systems for interaction between the board and company management, areas for improvement, and behaviors and overall board culture. The nominating or corporate governance committee may oversee the evaluation process and should report general findings and areas for improvement publicly to
shareholders.
Large or systemically important companies should leverage professional, independent assistance to facilitate evaluations on a periodic basis (typically every three years).
Board meetings & attendance
The board should meet at regular intervals to ensure effective oversight of the company. We regard six meetings per year as a minimum guidance, and often more frequent meetings are necessary.
We also expect directors to attend the annual general meeting (AGM), and to facilitate communication with the shareholders whom they represent. The company should disclose the attendance record of individual directors in the AGM report, as well as mechanisms for shareholders to communicate directly with the board. We may withhold support from directors with poor attendance records or boards who fail to accommodate shareholder dialogue.
Non-executive director (NED) only meetings
NEDs should meet without executive board members present on a regular basis and when circumstances demand. They should also have at least one meeting per year to hold an unconstrained discussion away from day-to-day business matters. Ideally, this should be chaired by a senior or lead independent director, although the chair may be present (provided they are a non- executive). Conversely, in the case of two-tiered boards, supervisory boards should meet with executives on a regular basis to minimize the risk that NEDs could become marginalized from the business.
Training and mentorship
All directors should receive appropriate training when being onboarded. Ideally, the onboarding process should include assignment of a board mentor. Mentors are normally long- or medium-standing directors willing to take on the responsibility of providing ad hoc support and context for new directors.
All directors should regularly be provided opportunities to attend conferences, classes, or webinars to upskill and remain relevant. Such offerings may be an outcome of the board evaluation process or a request from directors or management directly. We encourage companies to develop regular director training plans that include educating directors on relevant environmental, social and governance matters.
Communication and accountability
The board should proactively and regularly make itself available for consultation with shareholders. To this end, boards should
appoint a senior or lead independent director to fulfil a formal
liaison role with key stakeholders. This is most important in cases where the CEO also holds the chair position, has executive responsibilities or was not independent on appointment.
Where appropriate, NEDs should be prepared to discuss matters of strategy, performance, risk, capital structure, standards
of operational practice, and oversight of company-specific
environmental and social matters.
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Corporate Governance Guidelines (CGG)
3Board committees
We encourage companies to move towards fully independent audit and compensation committees, as well as a nomination committee composed of a majority of independent directors. All board committees should report on their activities annually to shareholders (see section on "Reporting" below).
Audit
The audit committee provides an important safeguard for shareholders and for other stakeholders that rely upon the integrity of the report and accounts as a basis for their investing in the company.
The audit committee should consist exclusively of NEDs, all of whom should be independent, and consist of at least three individuals. At least one should have recent and relevant financial, acco unting o r audit experience, an d all audit co mmitte e
members should be financially literate. The committee should
be responsible for assessing the effectiveness, independence,
qualifications, expertise, and resources ofthe external auditors
(including the quality of audit) and oversee the process of review and issue of the accounts.
The audit committee should also be responsible for monitoring and approving related-party transactions and should ensure that any material related-party transactions do not disadvantage minority shareholders.
The audit committee is also responsible for publishing the annual audit report, which is essential for investors to evaluate the overall health of the business (see "Reporting" below). The audit committee report should provide meaningful disclosure on the committee's work and the issues it has addressed. In the event of a significant restatement ofaccounts or material weakness in internal controls, we may not support the election of members of
the audit committee who we consider have not fulfilled their duty
to shareholders. We may also not support the election of these director to the boards of other unrelated companies.
Compensation
The compensation (or remuneration) committee is responsible for setting the compensation of executive directors and senior executives and should coordinate with the company's human resources function to develop a coherent and effective compensation strategy throughout the company. As a best practice we believe that compensation committees should consist exclusively of independent non-executive directors. We encourage compensation committees to engage in direct dialogue with shareholders when developing compensation policies. (See "4. Compensation" below).
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The compensation committee must consult with other board functions to ensure that pay mechanisms are well aligned with strategic goals and the company's appetite for risk. In particular, the compensation committee should work with the board and its
committees to determine the appropriate balance in the allocation of profits to employees as incentive payment, to shareholders as dividends, and for retention or reinvestment in the business itself.
The committee's fiduciary duty is also to ensure that the amount
of payment to management is fair and appropriate. Finally, the committee should be attentive to compensation across the company to ensure management is delivering on strategic priorities, especially those that enhance shareholder returns, and managing risk effectively.
We may withhold our support from the chair and/or members of
the compensation committee where there are significant concerns
with the committee's decision-making, or where issues we have
identified with pay policies and practices remain unaddressed.
Nomination
A nomination committee should oversee all board and senior executive appointments. Normally it should be a committee of independent non-executive directors and the board chair. In certain instances, it may be appropriate for the committee to leverage management's advice. Although we prefer a fully independent committee, we recognize that a non-independent director or representative of a large shareholder may be appropriate in some circumstances.
Corporate governance
We recognize that companies may choose to have the nominating committee or a specific corporate governance committee responsible
for corporate governance practices and procedures. Regardless of the structure, the committee should monitor emerging regulatory and industry standards, strive to achieve global best practice, and should consult with shareholders to understand investor expectations.
Corporate responsibility and sustainability
We believe that committees with responsibilities related to oversight of corporate social responsibility, ethics or sustainability are prudent for purposes of risk management. For large companies
exposed to significant ESG risks, such committees are essential to
protecting shareholder value and managing reputational risk.
Business ethics
Whether it is through a committee such as the audit committee
or a general board review, it is important that the board affirm
its responsibility for reviewing internal business ethics systems,
practices, and processes.
Corporate Governance Guidelines (CGG)
4Compensation
Levels of compensation and other incentives should be designed
to promote sustainable, long-term shareholder value creation and reflect the executives' work and contribution to the company.
No director should be involved in setting their own compensation. Given the consistent upward trend in total compensation, we expect careful usage and robust justification ofbenchmarks. We also wish to see comprehensive disclosure of performance targets as
well as actual perfo rman ce against pre -set targets. We expect justifica tio n of base pay levels awarded, and that a significant proportion
of total compensation be variable and subject to appropriately challenging performance conditions. We do not set guidelines for levels of compensation beyond the principles mentioned below.
Level of pay
We expect boards to demonstrate an understanding of (and sensitivity to) the views and expectations of shareholders and other key stakeholders, such as employees, when setting executive pay.
Relationship to strategy and risk
We expect companies to demonstrate the alignment of their compensation policy with their overall business strategy and planning. Performance metrics should relate to the company's articulated strategy and risk tolerance. Targets should be constructed to align executive incentives to the interests of long-term shareholders and should not create incentives for executives to undertake short-term risks that might imperil sustainable long-term performance. We advocate for risk-related preconditions to bonus awards to ensure inappropriate incentive payments are not awarded in the event the company's financial strength or credit quality deteriorates.
Disclosure
We seek appropriately detailed disclosure of board and management compensation packages (See "Compensation committee report" below). The purpose of the compensation report should not simply be related to compliance, rather it should be to enhance investors' understanding of the committee's practices, processes, and goals.
Following the award of the bonus, companies should provide a meaningful analysis in the compensation report of the extent to which relevant targets were met. The compensation report should be written in plain language and include the tax implications for the company.
At a minimum, the compensation of all directors, including all non- executive and executive directors, should be disclosed individually. We look for banded disclosure of those individuals at sub-board level who make a significant contribution to the company.
Executive contracts and pensions
Prior to employment contract agreements, companies should actively consider the potential rewards concerning severance in
the event of inadequate performance and clarify the performance conditions under which such severance benefits are to be payable. We encourage companies to seek mitigation in case a director has taken up employment elsewhere and to adjust the length and size of any payments accordingly. We recommend that companies make larger severance packages the subject of a shareholder vote.
Share schemes/ share compensation arrangements
We believe that strict guidelines should be observed regarding the issue, or potential issue, of shares for incentive schemes (also known as equity-based compensation plans) both as to the proportion of shares issued and to the rate at which these are issued each year. For us to accept large share schemes, the commercial drivers must outweigh the dilutive impacts. If the company is insufficiently transparent regarding the details
of such schemes, we may abstain or vote against them.
Equity incentive plans
We support the principle of motivating and rewarding executives through the granting of equity incentives.
Performance targets for equity incentive plans should be clearly disclosed and challenging. We believe that the compensation committee is in the best position to determine the most appropriate performance metrics for driving the long-term
business strategy. However, overall compensation packages should reflect a range ofperformance .
Generally, we believe executive pay plans should reflect a balance of financial, operational, and relative performance targets. We strongly believe that exceptional performance over a significant
period merits an exceptional level of compensation. We oppose retesting of performance conditions and may withhold support of compensation plans where the compensation committee has used its discretion to relax any performance targets previously approved by shareholders.
We will consider one-off equity awards on a case-by-case basis in light ofjustification provided by the company. However, frequent use of exceptional awards raises questions over the adequacy of the overall compensation strategy and effectiveness of succession planning. We will take particular care when reviewing equity awards granted for the purposes of recruitment or retention when such awards are not linked to meaningful performance targets.
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Corporate Governance Guidelines (CGG)
We encourage the inclusion of environmental and social factors in performance bonus payments where they could have a material impact on shareholder returns. We also expect a
discussion of the process undertaken by the company to identify such factors and an explanation as to why it considers these factors to be relevant.
Holding periods, vesting and malus/clawback policies
Bonus payments and long-term incentive schemes should be structured to reward long-term growth in shareholder value and be subject to performance-vesting conditions. We encourage companies to include deferred shares as a portion of short-term bonuses. Longer-term incentive plans should be fully share- based, and vesting periods should extend from at least three to five years or longer. We also encourage companies to require longer-term holding periods post vesting. The compensation
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committee should maintain a malus authority to withhold all or part of performance-based pay from executives before it has vested in cases where it deems it appropriate. The compensation committee should also have clawback authority to recover sums already paid out to executives. This might occur following a
significant restatement ofaccounts, where previously granted awards were paid on the basis ofinaccurate figures, or where
the long-term outcomes of a specific strategy result in significant
value destruction for shareholders.
Employee ownership
Widespread employee ownership can contribute positively to shareholder value, as it further aligns employees' interests with those of shareholders. Such devices should not, however, be instituted as anti-takeover devices, and should be included within company-wide dilution limits.
Corporate Governance Guidelines (CGG)
5 Audit, risk and control
We recommend that the independent members of the audit committee meet on a regular basis with the company's auditors and without company management. This may enable a better flow of information between auditors and the board.
Appointment of auditors
The auditors' performance and appointment should be reviewed periodically. Where the same firm remains as auditor for a period
of time, there should be a policy of regular rotation of the lead
audit partner. We believe that systematic rotation ofaudit firms is both desirable and in the best interests of shareholders.
We expect audit quality to be the main consideration in the selection of the auditor and expect that shareholders should be given the opportunity to vote on the appointment and payment of auditors.
Auditor liability
We recognize the disproportionate risk that joint & several liability may place upon audit firms. However, we will only consider supporting arrangements to cap auditor liability in exceptional
circumstances (e.g., where the risk of a catastrophic and disproportionate claim can be demonstrated).
Fees paid to a company's auditors in addition to audit fees
Companies should disclose when auditors carry out consultancy work in addition to auditing the company and the audit committee should consider whether there is a risk that an auditor's impartiality may be jeopardized. The range, nature and tendering process for any such non-audit work should be supervised by the audit committee, whose responsibilities in this area should be fully disclosed. Where substantial non-audit fees are paid for more than one year, we may not support the reappointment of the auditor or the payment of auditor fees in its voting at AGMs.
Related-party transactions
Many companies are involved in material related-party transactions, which represent a significant risk to shareholders. This risk is mitigated in companies with fully independent
audit committees whose responsibility it is to ensure that such transactions are conducted on the basis of arm's-length valuations. We strongly encourage companies to use such committees for scrutiny, and to secure prior shareholder approval for material related-party transactions.
In the circumstance of continued concerns, we recommend that each company disclose any shareholdings that its controlling shareholders may have in other companies or investment vehicles that have a material interest in the company.
Risk management
The board as a whole is responsible for defining a company's
risk tolerance relative to its strategy and operations—it is also
responsible for monitoring the company's performance relative to defined risks. Financial, operational, and reputational risks that are relevant to the company's business and performance
should be included in this oversight, including material ESG and ethical risks.
Depending on the size and complexity of the company, a standalone risk management committee may be warranted.
Corporate Governance Guidelines (CGG)
6Shareholder rights
While the precise nature and scope of shareholder rights vary across jurisdictions and many related aspects of our expectations are touched upon in other parts of these guidelines, a number merit direct mention:
Liaison with shareholders
Board and management teams should be ready, where practicable, to engage in dialogue with shareholders based on an understanding of shared objectives. They should also be proactive in making sure important news is imparted, subject to appropriate inside information procedures, and should react helpfully to investor inquiries.
In investment meetings with shareholders, companies should be prepared to address relevant corporate ESG issues.
Issuance of Shares
We respect a company's right to issue shares to raise capital. However, share issuance should be strictly limited to that which is necessary to maintain business operations and drive company strategy. We will not support requests to increase
authorized share capital that exceed 50% of existing capital, unless specific justification has been provided (e.g., to
complete a strategically important acquisition or undertake a necessary stock split).
Pre-emption Rights
We believe that pre-emptive rights for existing shareholders are essential. Shares may be issued for cash without pre-emptive rights or for compensation purposes, subject to shareholder approval. Companies should adhere to strict limits for issuing new shares as a proportion of the issued share capital. Furthermore, they should also be subject to flow rates, where
appropriate.
Share repurchases
We expect companies to repurchase shares in the market when it is advantageous for the company and its shareholders.
Authority to repurchase shares should be subject to shareholder approval.
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Controlled companies and share classes with differential
voting rights
We favor a share structure that gives all shares equal voting rights. We do not support the issue of shares with impaired or enhanced voting rights.
Where differential voting structures exist, this structure should be transparently disclosed to the market. In the case of controlled companies, we will review any request to issue shares with enhanced voting rights to determine why these are necessary and how they will reflect the interests ofminority shareholders. We support the principle of one share, one vote, and encourage companies to take steps to eliminate differential voting structures over time or prevent their introduction. Where there are unequal voting rights, we encourage clear and comprehensive disclosure of a timeline regarding the retirement of unequal voting structures (otherwise known as sunset provisions).
Voting caps
We oppose voting caps in principle and believe that all shares should be entitled to full voting rights irrespective of the holding period. However, we recognize the widespread use of voting caps
in certain markets, and the benefits accruing to shareholders not
subject to a cap. Therefore, at a minimum, we expect companies to clearly disclose any caps and encourage them not to introduce new caps while phasing out existing caps over time.
Mergers and acquisitions, spin-offs and other corporate restructuring
We expect boards to conduct thorough due diligence prior to pursuing any merger or acquisition and to maximize shareholder value in any deal.
Where major transactions are not subject to shareholder approval, companies should consider the views of their major shareholders, subject to regulatory constraints and shareholders' policies concerning insiders.
We consider the ESG risk implications of any corporate activity as part of the assessment of such activity, particularly in high-impact industries. We also expect the board to evaluate any potential ESG or ethical risks or liabilities of any business combination, including supply chains.
Corporate Governance Guidelines (CGG)
Poison pills
We regard artificial devices to deter bids, known as poison pills, as inappropriate and inefficient unless they are strictly
controlled and very limited in duration. We believe that any control-enhancing mechanism or poison pill that entrenches management and protects the company from market pressures is not in the interests of shareholders.
Pension and other similar significant corporate liabilities
Companies should be aware of, and report to shareholders on, significant liabilities such as those arising from unfunded or
under-funded pension commitments. The extent of the liability
should be reported, and the plans put in place to cover the deficit
should also be reported within a reasonable timeframe for action. The principal assumptions used in calculating amounts should
form part of this disclosure. Other significant liabilities could include specific operational or ESG risks that the company faces.
The company should provide some indication of how these risks
could result in "contingent liabilities."
Shareholder resolutions
We consider all shareholder resolutions that appear on the ballot and vote in accordance with our view of the long-term economic
benefit to shareholders. On this basis we will typically support
requests to improve board accountability, executive pay practices, ESG disclosure and climate change scenario analyses where we agree with both the broader issue highlighted as well as the implementation proposed. We also typically support shareholder proposals asking companies to report on implementation of environmental and social policies and assessments where there is reason for concern that links to financially material risks that could impact the performance of the company. We will review company and outside data and information, assess peers for benchmarking and consider the proponents' and company's arguments in full.
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Corporate Governance Guidelines (CGG)
7Reporting
Companies should have meaningful and transparent disclosure so that investors can obtain a clear understanding of all important and relevant issues. The annual report should provide a full review of the business model and strategy; key performance indicators used to gauge how the company is progressing against
its objectives; principal (material) risks and any significant factors affecting the company's future performance, including significant
ESG or ethical issues; key achievements; and standards followed during the accounting period.
In all markets, we favor reports that are:
⬛Comprehensive, covering the strategic direction of the business and all material issues, including any significant changes in the regulatory context and key ESG issues;
⬛Balanced, with even-handed treatment of both good and bad aspects of a company;
⬛Transparent, with narrative text that leverages plain language, and accounting notes that provide investors with a full understanding of the circumstances underlying the reported figures;
⬛Underpinned by Key Performance Indicators (KPIs) that drive business performance, are comparable over time, and are supported by detailed information on how they are calculated;
⬛Consistent and joined-up with other company reporting, including the compensation policy and corporate social responsibility or sustainability reporting.
Directors
Adequate biographical information on the directors should be provided for shareholders in advance of the AGM. This should
include information about directors' qualifications
an d experience, term o f o ffice, date o f first appo intment, level
of independence, board committee memberships and other
personal and professional commitments that may influence
the quality of their contribution and independence (e.g., other
directo rships, family an d so cial ties, an d affilia tio ns with relate d
companies or organizations). For all newly appointed directors,
we encourage disclosure ofqualifications, experiences and
skills that are considered by the board to be of relevance and importance to its oversight of company strategy. To this end, we encourage disclosure of a clear and concise board skills matrix in the proxy voting materials and annual report.
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Nomination committee report
The committee should report annually on its activity and the report should provide a detailed discussion of its process for identifying and appointing executive and non-executive directors, including the processes it employs to ensure board membership reflects an appropriate diversity ofperspectives, experiences, gender and racial or ethnic representation as well as cultural backgrounds. Where necessary, the report should include a thorough discussion of the board's view of the independence of certain members. The report should also include a robust description of the board evaluation process, cadence, and
outcomes (including strengths and opportunities identified).
Audit committee report
The audit committee should report on its conduct during the
year and, in particular, any specific matters o f judgement relating
to the application of accounting principles or the scope of the audit. It should also comment on the process for ensuring the independence of the auditors and for evaluating the impact
of non-audit work. The audit committee report should include a narrative description of any related-party transactions, with reference to how these might impact the interests of minority
shareholders. Any qualification ofthe audit statement and all
matters raised in the auditor's report must be fully explained.
System of internal controls and risk management
If the audit committee's remit includes risk management, the audit committee report should also address the board's oversight of enterprise-wide risks. Either as part of the audit committee report or a standalone report, the company should explain the results of the board's review of internal controls,
including any identified (or potential) weaknesses in internal
controls and how the board plans to respond to these.
Compensation report
We expect all companies to publish an annual compensation report in line with international good governance standards. Good compensation reporting outlines a company's overall philosophy and its policies and formulas for determining annual, short- and
long-term pay. We look for compensation reports to break down fixed versus variable pay and to clearly align total pay packages
with long-term shareholder value. The compensation report
should clearly disclose specific long-term performance targets
and total potential pay-outs.
Corporate Governance Guidelines (CGG)
If short-term performance targets cannot be disclosed due to commercial sensitivity, we expect retrospective disclosure of short- term targets and of actual performance against these targets.
We recommend that all companies put the compensation report to a shareholder vote and encourage compensation committee members to actively consult their shareholders prior to the AGM.
Sustainability reporting
We encourage companies to report on any significant ESG or
ethical risks and opportunities in their annual reports including the systems in place to manage these risks. This may be supported by more detailed disclosure in a separate corporate social responsibility or sustainability report.
Code of corporate governance
Companies should provide a full and clear statement of all matters relating to the application of the provisions of the relevant national code of corporate governance. The way the provisions are put into effect should be clearly discussed. Any deviations should be supported by meaningful explanations.
Code of conduct
Companies should maintain a code of conduct reflecting
corporate values and promotion of ethical business practices. Such codes should address business-critical compliance issues including anti-corruption practices.
Reincorporation in a tax or governance haven
Irrespective ofthe potential benefits a smaller tax burden may
bring, we will typically vote against resolutions for a company to reincorporate in a new legal jurisdiction that offers lower legal and governance protections to shareholders. Aggressive
tax strategies, even if structured legally, can pose potentially
significant reputational and commercial risks for companies.
We expect boards to ensure the company's approach to tax policy is both prudent and sustainable. To that end, we therefore expect companies to disclose how the board is providing such oversight. Companies should provide a suitable amount of information for investors to understand their tax practices and associated risks.
Listings
Companies that are listed on an exchange should comply with the rules and listing requirements of that exchange.
Shareholder resolutions and access to the proxy statement
Shareholder resolutions represent the exercise of a key shareholder right and may encompass a wide range of issues. We encourage companies to engage in constructive dialogue with shareholders and other key stakeholders. Where engagement
is unsuccessful, we support shareholders' right to submit a shareholder proposal for consideration by all investors. In these instances, companies should behave respectfully by communicating promptly and fully with shareholders while refraining from obstructing the process. The board should provide a full and reasoned response to any shareholder proposal on the ballot. We consider all shareholder resolutions put forward and vote in accordance with our understanding of the long-term economic benefit to shareholders. We may? support shareholder resolutions relating to the right to nominate or remove directors, including those related to an advisory
shareholder vote on pay. We will incorporate into our decision whether a shareholder resolution is binding in nature or advisory (non-binding) in applying the above considerations.
15
Corporate Governance Guidelines (CGG)
8 Social and environmental factors
Environmental and social factors can present serious risks to corporations and their ability to generate shareholder returns.
Awell-run company should, therefore, have formal systems to identify, assess and manage significant risks associated with financially material environmental and social factors. Companies should publicly disclose such factors on a regular basis and detail any management-related strategies and targets.
Disclosure should cover both direct operations and, where relevant, the policies applied to their supply chains. Companies should make appropriate and integrated disclosures reflecting touch points to their strategy, research and development, capital expenditures, operational performance, and commercial aspirations.
In general, we evaluate environmental and social proposals based on the relevance of the issue to the company and the
desirability of the specific action requested in the proposals to
advance long-term shareholder value. We recognize that some proposals may identify important company risks even if the proposal is poorly constructed. In such cases, we encourage companies to identify, mitigate and report on their respective risk management approach effectively.
Environmental and social management
Companies should determine how financially material
environmental and social risks and opportunities are addressed via their core business strategy. As part of this process, companies should proactively identify, assess and manage those risks and opportunities, as well as implement robust sustainability governance frameworks to promote accountability and ensure effective oversight. We expect companies to align their disclosure of environmental and social policies, management systems and performance according to internationally accepted standards. We also expect companies to quantify impacts from environmental and social factors and set targets to mitigate and manage material sustainability risks and impacts.
We have set out our detailed thoughts for environmental and social practices in stand-alone documents available on our website.
We may withhold support from management resolutions should we deem companies' responses to involvement in significant environmental or social controversies as insufficient, or where we
have concerns about recurrent weak practices by companies in
high-impact industries.
We may vote in favor of shareholder resolutions seeking improvements in reporting and/or management of environmental or social practices where we have concerns, acting in the
best economic interest of our clients, or improvements are proportionate to the risks faced.
Climate change
We recognize that climate change and the global transition to a lower-carbon economy present both risks and opportunities to businesses. We are supporters of both CDP (formerly, the Carbon Disclosure Project) and the recommendations of the Taskforce on Climate Related Financial Disclosures3 and expect to see companies report climate risks and strategy against the proper standards and frameworks. We also support company efforts to implement net zero targets; however, the company should
disclose specifics as to how they will accomplish this.
Some companies may be exposed to business risks stemming from the effects of climate change either directly via their business operations, regulations, changing consumer demand
or through supply chains. Where these are financially material
risks, companies should describe how their business strategy incorporates climate risk and ensure adequate disclosure.
Where companies in high-impact sectors—e.g., those requested to disclose to CDP Climate Change—fail to provide investment-relevant climate disclosure or do not have a robust climate change risk management strategy, we may not support management resolutions, including the report and accounts or the election of directors if we think this is in the best economic interests of our clients.
Where there are matters of concern, we may support shareholder resolutions calling on companies to improve their business planning and public disclosure in relation to climate change risks and opportunities.
We will make use of investor tools such as the Climate Action 100+ Net Zero Company Benchmark, the Transition
Pathway Initiative, our own proprietary net zero tool as well as engagements we've conducted to identify companies that fail to follow best practice.
Biodiversity
Loss of biodiversity degrades ecosystems which underpin the
Earth's ability to provide regulating, provisioning, cultural and supporting ecosystem benefits. For companies in sectors with
high biodiversity impact that fail to provide appropriate disclosure
3https://www.fsb-tcfd.org/publications/final-recommendations-report/.
16
Corporate Governance Guidelines (CGG)
(e.g., CDP Water Security and/or Forests disclosures), we may not support management resolutions if we think this is in the best economic interests of our clients.
Sustainability and integrated reporting
Acompany's recognition and management offinancially material environmental and social exposures and related disclosures provides shareholders with an additional lens through which to assess the quality, leadership, strategic focus, risk management and operational standards of practice of the business.
Disclosure ofsignificant environmental and social risk factors
should be included in the annual report. Certain high risk or high impact operations that are of substantial interest to investors and the public may require modular reporting alongside reporting that aggregates all company activity. We recommend disclosure in line with internationally accepted standards of best practice which enhances our understanding of a company's ability to create and sustain value in the short, medium and long term.
Audit of social and environmental management systems
We appreciate that auditing and assurance practices for environmental and social systems require further development; nevertheless, we consider third-party auditing of sustainability reports to be best practice. We encourage companies to move towards third-party verification.
Labor practices and standards
Companies may incur significant risks because of the
employment practices of their own operations and those of their suppliers and sub-contractors. Codes of conduct that address such risks and include detailed and effective procedures for their supply chain are usually in companies' best interests.
Where there is cause for concern, we favor codes based on internationally recognized standards (e.g., core conventions of the International Labour Organization), independent monitoring or auditing of implementation, and reporting of aggregate audit results. We look for regular, public reporting on code implementation.
Human rights
Companies may incur extraordinary risks to their operations, staff, or reputation as a result ofoperating in conflict zones or
in locations at risk of human rights abuses. Risks may also be encountered via supply chains when primary product
inputs are sourced from at-risk areas. Where there is cause for concern, we support resolutions asking companies to develop and implement policies and management systems addressing human rights and security management. These policies should
reflect internatio nally reco gnize d standards (e .g., Unite d Natio ns Universal Declaration of Human Rights) and should apply to
suppliers and sub-contractors.
Severe human and labor rights issues often affect the most vulnerable communities and can represent a threat to reputational and operational corporate performance. They are referenced in various international standards and conventions and are linked to existing4 or evolving5 regulations that issuers may be subject to.
We believe that effective mitigation of these issues can contribute to sustainable long-term value creation by the
companies in which we choose to invest. At companies identified as being most at risk with insufficient mitigation strategies, we
may not support management resolutions, including the report and accounts or election of directors if we think this is in the best economic interests of our clients.
Diversity and equal employment opportunity
The best interests of companies, as is maintaining a diverse workforce. We support efforts to strengthen non-discrimination policies, achieve diversity objectives and address glass ceilings
at all levels within organizations. We welcome disclosure of specific diversity targets and reporting on performance against
these targets, as well as reporting on gender and ethnicity pay gaps within companies and plans to address these. We will look for disclosure of how measures to increase diversity have been applied and the management and oversight of these measures. In an environment where many industries and companies are facing shortages of skilled workers, thus increasing competition for talent, it is advisable and appropriate for company policies and practices to exceed legal requirements in order to attract and retain employees.
Political and charitable donations
Charitable and political donations should be consistent with the company's stated sustainability strategy. (See "Reporting" above). We recommend that the board provide ultimate oversight for political donations and related activity. Furthermore, we believe that companies that undertake charitable giving should have transparent policies and undertake charitable giving programs with due regard for the interests of shareholders and key stakeholders.
Environmental stewardship
Companies should determine how key environmental risks
and opportunities fit into their core business strategy. As part
of this process, companies should identify, assess, and manage their environmental impacts. This may include minimizing key environmental impacts, reporting on environmental management
systems and performance, and discussing related financial
impacts. Areas of increasing business interest include energy
use, emissions, water, waste, and the utilization of natural resources.
4UK Modern Slavery Act, OECD Guidelines for Multinational Enterprises.
5EU corporate mandatory human rights due diligence, Swiss mandatory human rights DD (focus weapons), German Supply Chain Code.
17
Corporate Governance Guidelines (CGG)
9Voting matters
Annual general meetings
Although we supported company efforts to hold virtual -only AGMs during the initial stages ofthe COVID-19 pandemic, we encourage a return to physical annual meetings of the shareholders that are supplemented with a robust and accessible virtual (or hybrid) option. If the company decides to provide a hybrid meeting, shareholders joining virtually should be provided the same treatment and transparency as those attending in-person.
Vote disclosure
We expect companies to disclose the voting results of their general meetings, both at the meeting and on their websites. This should include a detailed breakdown of votes for and against, as well as abstentions.
In the spirit of transparency, we also make available to both our institutional and retail fund customers, as well as to the public, a comprehensive record of our voting by publishing all our votes and comments on our website.6 A summary of our voting statistics can be found in our annual Stewardship report
Shareblocking
We believe that shareblocking—the practice of preventing shares
from being transferred for a fixed period prior to the vote at a
company meeting—discourages shareholder participation and should be replaced with a record date. Where shareblocking exists, we will follow client policy and may be prevented from voting because of concerns about failed trade settlements and extraordinary cost to clients.
Electronic voting and of use proxy advisory services
We typically exercise voting rights electronically. We currently vote using ProxyExchange, the electronic voting platform provided by
Institutional Shareholder Services (ISS). We do not follow ISS vote recommendations, except as provided for in our Conflict of Interest Policy or if instructed by clients. Instead, ISS assists us though pre-populating our vote instructions in accordance with our vote policies. Our Responsible Investment team reviews a proportion of meetings based on an internal prioritization model.
Position on abstentions
Our standard voting approach is to either vote for or against resolutions where these options are available to shareholders.
6See vote disclosure webpage.
18
However, there are cases where we consider abstaining to be appropriate—for example, where company practices have
impro ved significan tly but do no t fully meet o ur expectatio ns.
With respect to shareholder resolutions, we may abstain in cases where we agree with the broader issue highlighted but do not agree with the way in which the resolution prescribes change.
Additional soliciting materials
If we become aware that an issuer has filed additional soliciting
materials prior to a proxy vote submission deadline, then we
endeavor to review and reflect those in the application ofour voting policy where: (a) the submission is published at least five
days prior to our earliest client vote cut-off; and (b) the enclosed information is considered to be material towards impacting our voting position.
Stocklending
We observe that stock lending is a widespread market practice involving the sale and contractually pre-agreed repurchase of
a stock. We believe that stock lending is an important factor
in preserving the liquidity of markets and in facilitating hedging strategies; it can also provide investors with a significant additional return on their investments as the sale repurchase
transaction may include a profit margin.Importantly, however,
if the term of the instrument coincides with an annual or extraordinary general meeting, the transfer of the voting right impairs the ability of the underlying shareowner to exercise their voting rights. In rare instances, this has led to abuse, where borrowers have deliberately entered into transactions to sway the outcome of a shareholder vote without any intention of owning the stock long-term. We consider the balance struck between stock lending and voting to be a matter for individual decision- making by clients.
Record dates
We recommend that a record date be set a maximum offive
working days prior to AGMs for custodians and registrars to clearly establish those shareholders eligible to vote. This will give time for all relevant formalities to be completed and serves the same purpose as shareblocking without the disruptions noted above.
Voting systems
All companies should conduct voting by poll, rather than relying on a show of hands.
We believe that shareholders have the right to appoint any reasonable person as proxy to vote their shares, either in person or electronically.
We encourage the introduction of electronic voting systems that are accurate and provide an effective audit trail of votes cast.
Bundled resolutions
Resolutions put to company meetings should cover single issues, or issues that are clearly interdependent. Any other practice potentially reduces the value of votes and can lead to opposition to otherwise acceptable proposals. We will normally oppose resolutions that contain such inappropriately bundled provisions.
Corporate Governance Guidelines (CGG)
Any other business
We expect to vote on resolutions where the content has been made clear to shareholders and is in the interests of the company and its shareholders. Where a resolution invites shareholders to vote on "any other business," we will systematically vote against.
Political and charitable donations
We welcome the opportunity to vote on company donations if material. With respect to donations to political parties or to organizations closely associated with political parties, we believe the board is best positioned to oversee the appropriateness of such spending and should review as often as is necessary to ensure congruency with both corporate strategy and values.
Amendments to Articles
We are generally unsupportive of amendments to the articles of incorporation which limits the liability of company officers.
19
Dear Stockholder,
On August 22, 2023 (the Payment Date), pursuant to its managed distribution policy, Columbia Seligman Premium Technology Growth Fund, Inc. (NYSE: STK) (the Fund) paid a distribution in the amount of $0.4625 per share of common stock to stockholders of record on August 14, 2023, which is equal to a quarterly rate of 2.3125% (9.25% annualized) of the $20.00 offering price in the Fund’s initial public offering in November 2009. The third-quarter distribution of $0.4625 per share is equal to a quarterly rate of 1.49% (5.96% annualized) of the Fund’s market price of $31.04 per share as of July 31, 2023.
Prior to the managed distribution policy, the Fund paid distributions pursuant to a level rate distribution policy. Under its former distribution policy and consistent with the Investment Company Act of 1940, as amended, the Fund could not distribute long-term capital gains, as defined in the Internal Revenue Code of 1986, more often than once in any one taxable year.
In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits the Fund to distribute long-term capital gains more often than once in any one taxable year. After consideration by the Fund’s Board, the Fund adopted the current managed distribution policy which allows the Fund to make distributions of long-term capital gains more than once in any taxable year.
The following table sets forth the estimated breakdown of the distribution noted above, on a per share basis, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
0.00% |
$0.0000 |
|
Net Realized Long-Term Capital Gains |
30.44% |
$0.1408 |
|
Return of Capital or other Capital Source |
69.56% |
$0.3217 |
|
Total |
100.00% |
$0.4625 |
The following table sets forth the estimated breakdown, on a per share basis, of all distributions made by the Fund during the year-to-date period ended on the Payment Date of the above distribution (includes the distribution payment noted in the table above) from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of All Distributions Paid Through
Year-To-Date Period Ended on the Payment Date of the Current Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
4.11% |
$0.0571 |
|
Net Realized Long-Term Capital Gains |
72.70% |
$1.0087 |
|
Return of Capital or other Capital Source |
23.19% |
$0.3217 |
|
Total |
100.00% |
$1.3875 |
As of the payment date of the current distribution, the Fund estimates that it has distributed more than its income and net realized capital gains. Therefore, all or a portion of your distribution may be a return of capital or other capital source. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” This could change during the remainder of the year, as further described below.
The amounts, sources and percentage breakdown of the distributions reported in this Notice are only estimates and are not being provided for, and should not be used for, tax reporting purposes. The actual amounts, sources and percentage breakdown of the distribution for tax reporting purposes, which may include return of capital, will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations.
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the 5-year period ended July 31, 2023, and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at July 31, 2023.
|
|
|
Average Annual Total NAV Return for the 5-year Period Ended July 31, 2023
|
17.08% |
|
Annualized Distribution Rate as a Percentage of July 31, 2023 NAV Price
(For the 5-year Period ended July 31, 2023) |
7.36%
|
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the period since inception of Fund investment operations through the period noted and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at July 31, 2023. Average annual total return of a share of the Fund’s common stock at NAV for the period since inception of Fund investment operations through the period noted includes the 4.50% sales load assessed to IPO investors.
|
|
|
Average Annual Total NAV Return for the Period Since Inception of Investment
Operations (November 30, 2009) Through July 31, 2023
|
14.41% |
|
Annualized Distribution Rate as a Percentage of July 31, 2023 NAV Price
(For the Period Since Inception of Investment Operations (November 30, 2009) through July 31, 2023)
|
6.85%
|
The following table sets forth (i) the cumulative total return (at NAV) of a share of the Fund’s common stock for the year-to-date period ended July 31, 2023 and (ii) the Fund’s distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at July 31, 2023.
|
|
|
|
Cumulative Total NAV Return for the Year-to-Date Period Ended July 31, 2023
|
32.86% |
|
Distribution Rate as a Percentage of July 31, 2023 NAV Price
(For the Year-to-Date Period Ended July 31, 2023) |
3.19% |
Past performance does not guarantee future results.
You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions noted in the tables above or from the terms of the Fund’s distribution policy.
The Fund or your financial professional will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions on your US federal income tax return. For tax purposes, the Fund is required to report unrealized gains or losses on certain non-US investments as ordinary income or loss, respectively. Accordingly, the amount of the Fund’s total distributions that will be taxable as ordinary income may be different than the amount of the distributions from net investment income reported above.
The Board may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains.
Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. You can obtain the Fund's most recent periodic reports and other regulatory filings by contacting your financial advisor or visiting www.columbiathreadneedleus.com. These reports and other filings can also be found on the Securities and Exchange Commission's EDGAR Database. You should read these reports and other filings carefully before investing.
The Fund expects to receive all or some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the equity and equity-related securities in its portfolio; and (ii) capital gains (short-term and long-term) from option premiums and the sale of portfolio securities. It is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return of capital is a return of your original investment. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the Fund’s distribution policy.
Distributions that qualify as a return of capital are a return of some or all of your original investment in the Fund. A return of capital reduces a stockholder’s tax basis in his or her shares. Once the tax basis in your shares has been reduced to zero, any further return of capital may be taxable as capital gain. Shareholders should consult their tax advisor or tax attorney for proper treatment.
Distributions may be variable, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which, the Fund receives income from the sources noted above. As portfolio and market conditions change, the rate of distributions on the shares and the Fund’s distribution policy could change.
The Fund's use of derivatives introduces risks possibly greater than the risks associated with investing directly in the investments underlying the derivatives. A relatively small price movement in an underlying investment may result in a substantial gain or loss.
The Fund should only be considered as one element of a complete investment program. An investment in the Fund should be considered speculative. The Fund's investment policy of investing in technology and technology-related companies and writing call options involves a high degree of risk.
There is no assurance that the Fund will meet its investment objectives or that distributions will be made. You could lose some or all of your investment. In addition, closed-end funds frequently trade at a discount to their net asset values, which may increase your risk of loss.
The market prices of technology and technology-related stocks tend to exhibit a greater degree of market risk and price volatility than other types of investments. These stocks may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. These stocks also may be affected adversely by changes in technology, consumer and business purchasing patterns, government regulation and/or obsolete products or services. Technology and technology-related companies are often smaller and less experienced companies and may be subject to greater risks than larger companies, such as limited product lines, markets and financial and managerial resources. These risks may be heightened for technology companies in foreign markets.
The Fund is not insured by the FDIC, NCUA or any federal agency, is not a deposit or obligation of, or guaranteed by any financial institution, and involves investment risks including possible loss of principal and fluctuation in value.
Columbia Seligman Premium Technology Growth Fund is managed by Columbia Management Investment Advisers, LLC. This material is distributed by Columbia Management Investment Distributors, Inc., member FINRA.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
All rights reserved. Columbia Management Investment Distributors, Inc., 290 Congress Street, Boston, MA 02210
© 2023 Columbia Management Investment Advisers, LLC
columbiathreadneedleus.com
Adtrax 5849649
Dear Stockholder,
On November 21, 2023 (the Payment Date), pursuant to its managed distribution policy, Columbia Seligman Premium Technology Growth Fund, Inc. (NYSE: STK) (the Fund) paid a distribution in the amount of $0.4625 per share of common stock to stockholders of record on November 13, 2023, which is equal to a quarterly rate of 2.3125% (9.25% annualized) of the $20.00 offering price in the Fund’s initial public offering in November 2009. The fourth-quarter distribution of $0.4625 per share is equal to a quarterly rate of 1.8194% (7.28% annualized) of the Fund’s market price of $25.42 per share as of October 31, 2023.
Prior to the managed distribution policy, the Fund paid distributions pursuant to a level rate distribution policy. Under its former distribution policy and consistent with the Investment Company Act of 1940, as amended, the Fund could not distribute long-term capital gains, as defined in the Internal Revenue Code of 1986, more often than once in any one taxable year.
In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits the Fund to distribute long-term capital gains more often than once in any one taxable year. After consideration by the Fund’s Board, the Fund adopted the current managed distribution policy which allows the Fund to make distributions of long-term capital gains more than once in any taxable year.
The following table sets forth the estimated breakdown of the distribution noted above, on a per share basis, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
0.00% |
$0.0000 |
|
Net Realized Long-Term Capital Gains |
100.00% |
$0.4625 |
|
Return of Capital or other Capital Source |
0.00% |
$0.0000 |
|
Total |
100.00% |
$0.4625 |
The following table sets forth the estimated breakdown, on a per share basis, of all distributions made by the Fund during the year-to-date period ended on the Payment Date of the above distribution (includes the distribution payment noted in the table above) from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of All Distributions Paid Through
Year-To-Date Period Ended on the Payment Date of the Current Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
3.09% |
$0.0571 |
|
Net Realized Long-Term Capital Gains |
96.91% |
$1.7929 |
|
Return of Capital or other Capital Source |
0.00% |
$0.0000 |
|
Total |
100.00% |
$1.8500 |
In certain years since the Fund’s inception, the Fund has distributed more than its income and net realized capital gains, which has resulted in Fund distributions substantially consisting of return of capital or other capital source. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” As of the payment date of the current distribution, all Fund distributions paid in 2023 (as estimated by the Fund based on current information) are from the earnings and profits of the Fund and not a return of capital. This could change during the remainder of the year, as further described below.
The amounts, sources and percentage breakdown of the distributions reported in this Notice are only estimates and are not being provided for, and should not be used for, tax reporting purposes. The actual amounts, sources and percentage breakdown of the distribution for tax reporting purposes, which may include return of capital, will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations.
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the 5-year period ended October 31, 2023, and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at October 31, 2023.
|
|
|
Average Annual Total NAV Return for the 5-year Period Ended October 31, 2023
|
15.99% |
|
Annualized Distribution Rate as a Percentage of October 31, 2023 NAV Price
(For the 5-year Period ended October 31, 2023) |
8.48%
|
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the period since inception of Fund investment operations through the period noted and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at October 31, 2023. Average annual total return of a share of the Fund’s common stock at NAV for the period since inception of Fund investment operations through the period noted includes the 4.50% sales load assessed to IPO investors.
|
|
|
Average Annual Total NAV Return for the Period Since Inception of Investment
Operations (November 30, 2009) Through October 31, 2023
|
13.11% |
|
Annualized Distribution Rate as a Percentage of October 31, 2023 NAV Price
(For the Period Since Inception of Investment Operations (November 30, 2009) through October 31, 2023)
|
7.88%
|
The following table sets forth (i) the cumulative total return (at NAV) of a share of the Fund’s common stock for the year-to-date period ended October 31, 2023 and (ii) the Fund’s distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at October 31, 2023.
|
|
|
|
Cumulative Total NAV Return for the Year-to-Date Period Ended October 31, 2023
|
17.23% |
|
Distribution Rate as a Percentage of October 31, 2023 NAV Price
(For the Year-to-Date Period Ended October 31, 2023) |
5.51% |
Past performance does not guarantee future results.
You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions noted in the tables above or from the terms of the Fund’s distribution policy.
The Fund or your financial professional will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions on your US federal income tax return. For tax purposes, the Fund is required to report unrealized gains or losses on certain non-US investments as ordinary income or loss, respectively. Accordingly, the amount of the Fund’s total distributions that will be taxable as ordinary income may be different than the amount of the distributions from net investment income reported above.
The Board may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains.
Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. You can obtain the Fund's most recent periodic reports and other regulatory filings by contacting your financial advisor or visiting www.columbiathreadneedleus.com. These reports and other filings can also be found on the Securities and Exchange Commission's EDGAR Database. You should read these reports and other filings carefully before investing.
The Fund expects to receive all or some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the equity and equity-related securities in its portfolio; and (ii) capital gains (short-term and long-term) from option premiums and the sale of portfolio securities. It is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return of capital is a return of your original investment. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the Fund’s distribution policy.
Distributions that qualify as a return of capital are a return of some or all of your original investment in the Fund. A return of capital reduces a stockholder’s tax basis in his or her shares. Once the tax basis in your shares has been reduced to zero, any further return of capital may be taxable as capital gain. Shareholders should consult their tax advisor or tax attorney for proper treatment.
Distributions may be variable, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which, the Fund receives income from the sources noted above. As portfolio and market conditions change, the rate of distributions on the shares and the Fund’s distribution policy could change.
The Fund's use of derivatives introduces risks possibly greater than the risks associated with investing directly in the investments underlying the derivatives. A relatively small price movement in an underlying investment may result in a substantial gain or loss.
The Fund should only be considered as one element of a complete investment program. An investment in the Fund should be considered speculative. The Fund's investment policy of investing in technology and technology-related companies and writing call options involves a high degree of risk.
There is no assurance that the Fund will meet its investment objectives or that distributions will be made. You could lose some or all of your investment. In addition, closed-end funds frequently trade at a discount to their net asset values, which may increase your risk of loss.
The market prices of technology and technology-related stocks tend to exhibit a greater degree of market risk and price volatility than other types of investments. These stocks may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. These stocks also may be affected adversely by changes in technology, consumer and business purchasing patterns, government regulation and/or obsolete products or services. Technology and technology-related companies are often smaller and less experienced companies and may be subject to greater risks than larger companies, such as limited product lines, markets and financial and managerial resources. These risks may be heightened for technology companies in foreign markets.
The Fund is not insured by the FDIC, NCUA or any federal agency, is not a deposit or obligation of, or guaranteed by any financial institution, and involves investment risks including possible loss of principal and fluctuation in value.
Columbia Seligman Premium Technology Growth Fund is managed by Columbia Management Investment Advisers, LLC. This material is distributed by Columbia Management Investment Distributors, Inc., member FINRA.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
All rights reserved. Columbia Management Investment Distributors, Inc., 290 Congress Street, Boston, MA 02210
© 2023 Columbia Management Investment Advisers, LLC
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