H.R. 8286 — Protecting Americans’ Retirement Savings From Politics Act

This section amends the Securities Act of 1933 and Securities Exchange Act of 1934 to require that, whenever the Securities and Exchange Commission (SEC) engages in rulemaking on issuer disclosure obligations, the SEC must expressly provide that issuers disclose only information they determine to be material with respect to voting or investment decisions regarding their securities. Materiality exists if there is a substantial likelihood that a reasonable investor would view nondisclosure as significantly altering the total mix of available information. (The requirement does not apply to rulemakings removing disclosure obligations.)

This section establishes within the Securities and Exchange Commission (SEC) the Public Company Advisory Committee to advise the SEC on rules, regulations, and policies related to protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation—specifically on regulatory priorities, public reporting and corporate governance of public companies, the proxy process for shareholder meetings, trading in public company securities, and capital formation (excluding the SEC's enforcement program). The Committee consists of 10 to 20 members appointed by the SEC, with at least 50% being officers, directors, or senior officials of public companies (excluding those owning asset management, fixed income, investment advisory, broker-dealer, or proxy services businesses), plus executives from relevant associations and professional advisers (e.g., attorneys, accountants); members serve staggered four-year terms, elect their own leadership for two-year terms, meet at least twice annually, and may form subcommittees. The SEC must provide staff, review Committee findings and recommendations, and issue public statements assessing them and disclosing any intended actions (though not required to implement them); the Committee is exempt from the Federal Advisory Committee Act.

This section directs the Securities and Exchange Commission (SEC) to conduct a study on (1) the detrimental and potential detrimental impacts of the EU Corporate Sustainability Due Diligence Directive (Directive (EU) 2024/1760), Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464), and any amending, supplementing, replacing, or modifying directives (including Directive (EU) 2026/470)—collectively, the Directives—on U.S. companies, consumers, investors, and the economy; (2) the Directives' alignment with international human rights and environmental conventions and declarations; and (3) the legal basis for their extraterritorial reach. Not later than one year after enactment, the SEC must submit a report with study results and policymaker recommendations on mitigating measures, alternatives, or modifications to the relevant congressional committees, Secretary of State, Secretary of Commerce, and U.S. Trade Representative; the SEC may also compel private entities to provide necessary data.

This section directs the Securities and Exchange Commission (SEC) to conduct a comprehensive study of proxy advisory firms (i.e., firms such as Institutional Shareholder Services and Glass Lewis that provide voting recommendations to institutional investors) and the proxy process not later than 180 days after enactment and every five years thereafter, with the initial study covering the previous 10 years and subsequent studies covering the previous five years. The study must address (1) financial and other incentives and obligations in the proxy process and whether they serve retail investors' economic interests; (2) regulations and incentives creating outsized influence or a duopoly among proxy advisors, including benefits and costs; (3) issuer costs responding to politically-, environmentally-, or socially-motivated shareholder proposals; (4) shareholder proposals' impact on private companies going public; (5) economic analysis by proxy firms and institutional shareholders on proposals; (6) institutional investors' reliance on proxy firm recommendations despite fiduciary duties; and (7) whether proxy advisors are sufficiently regulated given their influence. The SEC must issue a report on each study to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services.

This section establishes SEC registration requirements for proxy advisory firms (i.e., entities that provide proxy voting advice, research, analysis, ratings, or recommendations to clients, including those voting shares held on behalf of shareholders) by adding new section 15H to the Securities Exchange Act of 1934. It prohibits such firms from using mails or interstate commerce to provide these services unless registered. Registration applications must include (1) certifications that the firm can provide accurate proxy advice and, for clients voting on behalf of shareholders, that advice will be in those shareholders' best economic interest with requisite expertise and no violation of law; (2) details on procedures and methodologies for best economic interest; (3) organizational structure; (4) code of ethics status; (5) conflicts of interest; (6) public disclosure and management policies; (7) staff qualifications; and (8) other SEC-required information. The SEC must determine within 90 days whether to grant registration or institute denial proceedings (concluded within 120 days, extendable by 90 days for good cause), granting it unless the firm fails certifications or would be subject to suspension/revocation. Registration information is publicly available on the SEC website, and registered firms must promptly update for material changes and file annual certifications within 90 days after year-end.

This section establishes that, for purposes of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 (17 C.F.R. 240.14a-9), a proxy voting advice business's failure to disclose material information (such as its methodology, sources of information, or conflicts of interest) or making of a material misstatement in proxy voting advice—which recommends a security holder's vote, consent, or authorization on a specific matter requiring security holder approval—is considered false or misleading with respect to a material fact. (Proxy voting advice businesses market their expertise in providing such advice separately from other investment advice and sell it for a fee.)

This section establishes annual SEC reporting requirements for institutional investment managers (i.e., asset managers exercising investment discretion over accounts holding certain equity securities) that engage proxy advisory firms and vote proxies on those securities. The report must include (1) an explanation of votes on each shareholder proposal; (2) the percentage of votes consistent with each retained proxy advisory firm's recommendations; (3) an explanation of the manager's consideration of those recommendations, voting consistency rate, reconciliation with fiduciary duties to shareholders' best economic interests, frequency of vote changes due to errors or issuer information, and investment professionals' involvement in voting; and (4) a certification that votes were based solely on shareholders' best economic interests. For managers with at least $100 billion in regulatory assets under management, the section further requires (1) clarifying in customer materials that shareholders need not vote every proposal; (2) conducting a pre-vote economic analysis for shareholder proposals (except those consistent with a majority-independent board's recommendation) to confirm alignment with shareholders' best economic interests; and (3) including all such analyses in the annual report. "Best economic interest" is defined as decisions maximizing investment returns over a time horizon consistent with the fund's objectives and risk profile.

This section establishes requirements related to proxy voting under the Securities Exchange Act of 1934 by adding new subsections to Section 14. Specifically, it (1) directs the Securities and Exchange Commission (SEC) to issue final rules prohibiting robovoting (i.e., automatically voting proxies consistent with a proxy advisory firm's recommendations or on its electronic platform without independent review and analysis); (2) prohibits institutional investors from outsourcing proxy voting decisions to any person other than a registered investment adviser or broker or dealer (or one exempt from registration) that owes a fiduciary or best interest duty to the investor; and (3) states that no person may be required to cast proxy votes unless obligated by fiduciary duty or SEC Rule 206(4)–6 (i.e., the proxy voting rule under the Investment Advisers Act of 1940 that requires advisers to vote client proxies in clients' best interests or disclose policies for not voting).

This section establishes proxy voting requirements under the Investment Advisers Act of 1940 for investment advisers of passively managed funds (i.e., qualified funds such as index mutual funds, ETFs, private funds, certain retirement plans, and trusts that track a securities index or portion thereof, disclose as passive, allocate at least 60% of assets to index-tracking strategies, and commit not to control issuers) with respect to non-routine votes on covered securities (i.e., voting securities held by such funds, excluding those of registered investment companies). Advisers must (1) vote according to beneficial owners' instructions (including selection of a published voting policy that anticipates proportionate voting without seeking issuer control, director nominations, shareholder proposals, or vote coordination); (2) follow the issuer board's recommendations; (3) abstain while seeking quorum presence; or (4) pursuant to SEC rules, direct vote tabulators to mirror other shareholders' votes. (Thus, advisers gain a safe harbor from liability under federal, state, or contractual law—including for not soliciting instructions—when complying; foreign private issuers are exempt if their voting policy is fully disclosed; and advisers must provide owners a form to select a policy with at least 5 business days to respond, allowable electronically.)

This section amends the Investment Advisers Act of 1940 to require that, for purposes of the best interest standard, personalized investment advice by brokers, dealers, or investment advisers be determined using pecuniary factors (i.e., factors a fiduciary prudently determines have a material effect on investment risk or return based on objectives, risk tolerance, and time horizon), which may not be subordinated to non-pecuniary factors unless the customer provides informed consent or the advice aligns with the customer's written investment profile. If consent is given to consider non-pecuniary factors, the broker, dealer, or investment adviser must disclose the potential pecuniary effects of prioritizing them. The Securities and Exchange Commission (SEC) must issue implementing rules within 12 months of enactment, with the amendment applying to recommendations and advice beginning 12 months after enactment.