To amend the Securities Exchange Act of 1934 to require certain disclosures by institutional investment managers in connection with proxy advisory firms, and for other purposes.
Sponsored By: Representative Loudermilk
Introduced
Summary
More public reporting on how large money managers vote on shareholder issues. This bill would require institutional investment managers that use proxy advisory firms to file annual reports with the Securities and Exchange Commission explaining their votes, how often they follow advisers, and how advisory recommendations affected voting decisions.
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- Institutional investment managers would have to include a vote-by-vote explanation, the percentage of votes consistent with each proxy advisory firm's recommendations, an explanation of how recommendations were considered, and a certification that votes served the shareholders' best economic interests.
- Managers with at least $100 billion in assets would face extra rules. They would have to tell customers that shareholders are not required to vote on every proposal, run an economic analysis before voting on proposals that differ from a board's independent directors' recommendation, and include that analysis in the annual report.
- The bill defines "proxy advisory firm" as providers of proxy voting advice, research, or recommendations. Shareholders and clients would get clearer transparency about how managers use advisers and who makes voting decisions.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
New proxy voting reports from large asset managers
If enacted, institutional investment managers that hire proxy advisors and vote shares would have to file a yearly report to the SEC. The report would show how they voted on each shareholder proposal. It would list, for each proxy advisor, the share of votes that matched its advice. It would explain how the advisor’s recommendations were used, how often votes changed due to errors or new issuer info, and who was involved. Managers would certify that all votes were based only on shareholders’ best economic interest, meaning to maximize returns consistent with the fund’s goals and risk. Very large managers with $100,000,000,000 or more in assets would face extra steps. They would tell customers that shareholders do not have to vote on every item. They would do an economic analysis before most votes (except when following a board with a majority of independent directors) and include those analyses in the annual report.
Sponsors & CoSponsors
Sponsor
Loudermilk
GA • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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