“To amend the Investment Advisers Act of 1940 to establish requirements for proxy voting of passively managed funds, and for other purposes.”
No CRS summary available for this bill.
This section establishes proxy voting requirements for investment advisers of passively managed funds (i.e., qualified funds such as index-tracking investment companies, private funds, or certain retirement plans that disclose as passive, allocate at least 60% of assets to index strategies, and commit to not exercising control over issuers). For votes on covered securities (i.e., voting securities held by such funds, excluding securities of registered investment companies), advisers must (1) vote per beneficial owner instructions (including selection of a published voting policy, which articulates proportionate voting without seeking issuer control, nominating directors, submitting proposals, or coordinating with others); (2) follow issuer board recommendations; (3) abstain while making quorum efforts; or (4) mirror other shareholders' votes per SEC rules (except routine matters). It provides a safe harbor from liability under federal, state, or contract law for compliance (including not soliciting instructions); exempts foreign private issuers if the adviser's voting policy is fully disclosed; requires advisers to provide a policy selection form with at least 5 business days to respond (electronically permissible unless declined); and defines key terms.