Empowering Shareholders Act of 2026
Sponsored By: Representative Huizenga, Bill [R-MI-4]
Introduced
Summary
Creates a mandatory proxy voting framework for passively managed funds. It requires investment advisers to vote proxies for covered securities in one of four specific ways and adds safe harbors, disclosure, and delivery rules to govern those choices.
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- Beneficial owners get more control over proxy votes. Advisers must provide a form to let owners pick a published voting policy or give instructions and must allow at least 5 business days to return it. Electronic delivery of materials is permitted.
- Investment advisers and passively managed funds must vote each covered security either by following owner instructions, following the issuer board’s recommendation, abstaining while making reasonable efforts to establish a quorum, or mirroring votes through Commission rules. Advisers who follow these options are protected by a safe harbor from certain federal and state liability. The rule takes effect one year after enactment.
- The bill defines which funds and securities are covered. A "passively managed fund" is a qualified fund that tracks an index, discloses it is passive, or allocates at least 60 percent to index strategies and commits not to exercise control. Foreign private issuers can be exempt if the adviser fully and fairly discloses a different published voting policy to beneficial owners.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
More control over index fund votes
If enacted, this bill would require investment advisers who vote proxies for passively managed funds to choose one of four options for each vote. Option A would let advisers follow the beneficial owner's instructions or their designee, including a published voting policy. Option B would let advisers follow the issuer board's recommendation. Option C would let advisers abstain while trying to be present for quorum. Option D would let advisers instruct tabulators to mirror shareholder elections under SEC rules. Advisers would have to give voting persons a form and at least 5 business days to return it unless the person declines. Advisers who follow these options would get a safe harbor from certain federal, state, contract, and arbitration claims. The rule would take effect one year after enactment. Advisers could exempt foreign private issuers if they fully disclose a different published voting policy.
Sponsors & CoSponsors
Sponsor
Huizenga, Bill [R-MI-4]
MI • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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