,i  #aag? ,,congress  #b;d ,session  ,h4
 ,r4 #heba  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,july #bg1 #bjbb,mr4  
,huiz5ga 7= himself & ,mr4 ,luetkemey]7 
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,f9ancial ,s]vices  ,a 
,,bill  ,to am5d ! ,inve/m5t ,advis]s   
,act ( #aidj to require inve/m5t advis]s
 = passively manag$ funds to arrange =  
pass-?r\gh vot+ ( proxies = c]ta9       
securities1 & = o!r purposes4  #a4 ,%ort
 title ,?is ,act may be cit$ z !        
,i,nvestor ,democracy is ,e,xpected ,act
 or ! ,,index ,act4  #b4 ,proxy vot+ (  
passively manag$ funds  7a7 ,9 g5]al ,! 
,inve/m5t ,advis]s ,act ( #aidj 7#ae    
,u4,s4,c4 #hj;b-#a et seq47 is am5d$ by 
ins]t+ aft] section #bjh 7#ae ,u4,s4,c4 
#hj;b-#h7 ! foll[+3  #bjh;,a4           
,requirem5t ) respect to proxy vot+ (   
passively manag$ funds  7a7 ,def9itions 
,9 ?is section-- 7#a7 ! t]m cov]$       
security--  7,a7 means a vot+ security1 
z t t]m is def9$ 9 section #b7;a7 ( !   
,inve/m5t ,company ,act ( #aidj 7#ae    

,u4,s4,c4 #hj;a-#b7;a771 9 :i* a        
qualifi$ fund is inve/$2 &  7,b7 does n 
include any vot+ security 7z def9$ 9    
subp>agraph 7,a77 ( an issu] regi/]$ ) !
 ,commission z an inve/m5t company "u   
section #h ( ! ,inve/m5t ,company ,act (
 #aidj 7#ae ,u4,s4,c4 #hj;a-#h72  7#b7 !
 t]m passively manag$ fund means a      
qualifi$ fund t-- 7,a7 is design$ to    
track1 or is d]iv$ f1 an index (        
securities or a portion ( su* an index2 
7,b7 discloses t ! qualifi$ fund is a   
passive fund or an index fund2  7,c7    
allocates n less ?an #dj p]c5t ( ! total
 assets ( ! qualifi$ fund to an inve/m5t
 /rategy t is design$ to track1 or is   
d]iv$ f1 an index ( securities or a     
portion ( su* an index2 or  7,d7        
discloses t an allocation describ$ 9    
subp>agraph 7,c7 foll[s an inve/m5t     
/rategy t is passive or bas$ on an index
 ( securities2  7#c7 ! t]m qualifi$ fund
 means--  7,a7 an inve/m5t company1 z t 
t]m is def9$ 9 section #c ( ! ,inve/m5t 
,company ,act ( #aidj 7#ae ,u4,s4,c4    

#hj;a-#c72  7,b7 a private fund2  7,c7  
an eligible def]r$ comp5sation plan1 z t
 t]m is def9$ 9 section #deg7;b7 ( !    
,int]nal ,rev5ue ,code ( #aihf2  7,d7 an
 entity describ$ 9 section #c7;c77#aa7 (
 ! ,inve/m5t ,company ,act ( #aidj 7#ae 
,u4,s4,c4 #hj;a-#c7;c77#aa772  7,e7 a   
plan ma9ta9$ by an employ] describ$ 9   
clause 7i71 7ii71 or 7iii7 ( section    
#djc7;b77#a77;,a7 ( ! ,int]nal ,rev5ue  
,code ( #aihf to provide annuity        
contracts describ$ 9 section #djc7;b7 ( 
su* ,code2  7,f7 a common tru/ fund1 or 
simil> fund1 ma9ta9$ by a bank2  7,g7   
any fund e/abli%$ "u section            
#hdch7;b77#a7 ( title #e1 ,unit$ ,/ates 
,code2 or  7,h7 any sep>ate manag$      
acc\nt ( a cli5t ( an inve/m5t advis]2  
7#d7 ! t]m regi/rant means an issu] (   
cov]$ securities2  7#e7 ! t]m r\t9e     
matt] does n include--  7,a7 a proposal 
t is n submitt$ to a hold] ( cov]$      
securities by means ( a proxy /atem5t   
comp>able to t describ$ 9 section       
#bdj4ad;a-#aja ( title #ag1 ,code (     

,f$]al ,regulations1 or any successor   
regulation2  7,b7 a proposal t is--  7i7
 ! subject ( a c\nt]-solicitation2 or   
7ii7 "p ( a proposal made by a p]son o!r
 ?an ! applicable regi/rant2  7,c7 a    
proposal t relates to a m]g] or         
consolidation1 except :51 ) respect to a
 regi/rant-- 7i7 ! proposal is to m]ge )
 a :olly own$ subsidi>y ( ! regi/rant2 &
  7ii7 hold]s ( cov]$ securities issu$  
by ! regi/rant t diss5t to ! proposal d 
n h rights ( appraisal2  7,d7 a proposal
 t relates to ! sale1 lease1 or ex*ange 
( all1 or sub/antially all1 ( ! prop]ty 
& assets ( a regi/rant2  7,e7 an        
election = directors 7or comp>able      
positions72 or  7,f7 any o!r matt]      
det]m9$ by ! ,commission or an ex*ange  
regi/]$ "u section #f ( ! ,securities   
,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4    
#gh;f7 to be n r\t9e2 &  7#f7 ! t]m vot+
 p]son means a p]son t provides vot+    
in/ructions "u subsection 7b7 or 7c74   
7b7 ,requirem5t  7#a7 ,9 g5]al ,subject 
to subsection 7g71 if an inve/m5t advis]

 holds au?ority to vote a proxy solicit$
 pursuant to section #ad ( ! ,securities
 ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4   
#ghn7 9 connection ) any vote ( cov]$   
securities held by a passively manag$   
fund1 & ! vot+ au?ority held by t       
inve/m5t advis] ) respect to ^? cov]$   
securities 7:5 comb9$ ) ! vot+ au?ority 
( o!r p]sons controll$ by1 or "u common 
control )1 t inve/m5t advis]7 is m ?an  
#a p]c5t ( ! vot+ au?ority ( ! out/&+   
securities ( ! regi/rant subject to !   
vote1 ! inve/m5t advis] %all vote       
proportionate am\nts ( ^? cov]$         
securities 9 accordance ) ! vot+        
in/ructions (--  7,a7 9 ! case ( a      
passively manag$ fund t issues          
securities1 p]sons hold+ securities 9 ! 
passively manag$ fund1 su* t1 solely = !
 purposes ( t vote1 ! p]c5tage (        
securities held by su* a p]son %all be  
deem$ to be ! p]c5tage ( ! cov]$        
securities b5eficially own$ by t p]son2 
&  7,b7 9 all cases o!r ?an a case      
describ$ 9 subp>agraph 7,a71 p]sons     

hold+ economic int]e/s 9 ! passively    
manag$ fund1 su* t1 solely = purposes ( 
t vote1 ! p]c5tage ( economic int]e/s   
held by su* a p]son %all be deem$ to be 
! p]c5tage ( ! cov]$ securities         
b5eficially own$ by t p]son4  7#b7      
,prohibition ,if p>agraph 7#a7 applies )
 respect to any vote ( cov]$ securities 
& ! inve/m5t advis] to :i* t p>agraph   
applies does n receiv+ vot+ in/ructions 
f all p]sons describ$ 9 subp>agraphs    
7,a7 & 7,b7 ( t p>agraph1 ! inve/m5t    
advis] may n vote ! proportion ( ! %>es 
( ! cov]$ securities = :i* ! inve/m5t   
advis] does n receive vot+ in/ructions4 
7c7 ,passively manag$ fund z security   
hold] ( ano!r passively manag$ fund ,if 
a passively manag$ fund 7ref]r$ to 9 ?is
 subsection z ! hold+ fund7 holds       
securities ( ano!r passively manag$ fund
 7ref]r$ to 9 ?is subsection z ! held   
fund71 & !re is a vote ) respect to     
cov]$ securities held by ! held fund1 ! 
inve/m5t advis] ( ! hold+ fund %all     
obta9 vot+ in/ructions f p]sons hold+   

securities 9 ! hold+ fund1 or to p]sons 
hold+ economic int]e/s 9 ! hold+ fund1 z
 applicable1 ) respect to t vote 9 !    
mann] describ$ 9 subsection 7b74  7d7   
,prohibitions  7#a7 ,reimbursem5t ,no   
p]son may seek reimbursem5t f a         
regi/rant1 or require any exp5ses       
incurr$ to be paid by a regi/rant1 )    
respect to ! obligations impos$ "u ?is  
section4  7#b7 ,p>tial compliance ,an   
inve/m5t advis] may n solicit vot+      
in/ructions f "s1 b n all1 vot+ p]sons  
"u subsection 7b77#a7 or 7c71 z         
applicable4  7e7 ,exceptions  7#a7 ,vot+
 on r\t9e matt]s ,not)/&+ subsections   
7b77#a71 7b77#b71 & 7d77#b71 if an      
inve/m5t advis] *ooses n to solicit vot+
 in/ructions ) respect to a vote        
describ$ 9 subsection 7b77#a7 or 7c71   
or1 z ( ! date t is #aj days be=e su* a 
vote1 ! inve/m5t advis] has n receiv$   
vot+ in/ructions f a p]son describ$ 9   
subp>agraph 7,a7 or 7,b7 ( subsection   
7b77#a7 or subsection 7c71 z applicable1
 ! inve/m5t advis] may vote ! cov]$     

securities = :i* ! inve/m5t advis] has n
 receiv$ vot+ in/ructions ) respect to a
 r\t9e matt]4  7#b7 ,mirror vot+        
exception = matt]s requir+ approval ( a 
majority ( out/&+ securities ,not)/&+   
subsections 7b77#a71 7b77#b71 & 7d77#b71
 if a matt] to be consid]$ at a meet+ ( 
a regi/rant requires ! approval ( a     
majority ( ! out/&+ securities ( !      
regi/rant entitl$ to vote on ! matt]1 an
 inve/m5t advis] to :i* any su*         
provision applies may1 ) respect to any 
cov]$ securities = :i* vot+ in/ructions 
h n be5 receiv$1 z ( ! date t is #aj    
days be=e t vote1 vote ! un9/ruct$ cov]$
 securities 9 a mann] t is proportionate
 to ! votes submitt$ on ! matt] by all  
o!r security hold]s ( ! regi/rant4  7f7 
,dissem9ation ( in=mation  7#a7 ,9 g5]al
 ,any inve/m5t advis] subject to !      
requirem5ts ( subsection 7b7 or 7c7     
%all1 ) respect to ! dissem9ation (     
in=mation & o!r mat]ials to a vot+      
p]son1 comply ) ! foll[+ requirem5ts1   
unless ! vot+ p]son affirmatively       

decl9es to receive t in=mation & o!r    
mat]ials3 7,a7 ,provide to ! vot+       
p]son--  7i7 a proxy /atem5t1 o!r proxy 
solicit+ mat]ial1 or an in=mation       
/atem5t2  7ii7 an annual report f !     
applicable regi/rant2  7iii7 a =m ( vot+
 in/ruction to return to ! inve/m5t     
advis]2 &  7iv7 any control or          
id5tification numb] t ! vot+ p]son ne$s 
to return to ! inve/m5t advis] ! vot+   
in/ruction provid$ "u subp>agraph 7,b74 
7,b7 ,provide ! vot+ p]son ) n less ?an 
#e bus9ess days aft] ! date on :i* !    
vot+ p]son receives ! mat]ials provid$  
"u p>agraph 7#a7 to return ^? mat]ials  
to ! inve/m5t advis]4  7#b7 ,electronic 
deliv]y ,all1 or any portion1 ( !       
mat]ials t an inve/m5t advis] is requir$
 to provide "u p>agraph 7#a77;,a7 may be
 provid$ electronically1 includ+ an     
int]net web site address provid$ by !   
applicable regi/rant or a ?ird p>ty4    
7#c7 ,option = inve/m5t advis]s ,an     
inve/m5t advis] may provide             
recomm5dations to vot+ p]sons ) !       

mat]ial provid$ "u p>agraph 7#a77;,a71  
or aft] provid+ ! mat]ial "u t p>agraph1
 if ! inve/m5t advis] p]mits vot+       
recomm5dations to be provid$ to vot+    
p]sons by ?ird p>ties on a              
nondiscrim9atory basis & on a wide range
 ( views4  7#d7 ,satisfaction (         
requirem5ts by passively manag$ fund ,) 
respect to any requirem5t applicable to 
an inve/m5t advis] "u ?is subsection1 ! 
requirem5t may be satisfi$ by !         
applicable passively manag$ fund1 :i*   
may cov] any exp5ses1 direct or         
indirect1 incurr$ 9 c>ry+ out t         
requirem5t4  7g7 ,safe h>bor & rule (   
con/ruction reg>d+ duties ,an inve/m5t  
advis]-- 7#a7 ) respect to a matt] t is 
n a r\t9e matt]1 may *oose n to solicit 
vot+ in/ructions f any p]son "u         
subsection 7b77#a7 or 7c71 subject to   
subsections 7d77#b7 & 7e72 &  7#b7 if ! 
inve/m5t advis] *ooses n to solicit vot+
 in/ructions "u subp>agraph 7,a71 %all n
 be consid]$ to be 9 violation ( any    
duty "u any ,f$]al or ,/ate law = fail+ 

to vote ! applicable securities4  4  7b7
 ,effective date ,section #bjh;,a ( !   
,inve/m5t ,advis]s ,act ( #aidj1 z add$ 
by subsection 7a71 %all take effect on !
 fir/ ,augu/ #a t occurs aft] ! date t  
is #b ye>s aft] ! date ( enactm5t ( ?is 
,act4  #c4 ,vot+ in/ructions f cu/om]s  
,section #ad7;b77#a7 ( ! ,securities    
,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4    
#ghn7b77#a77 is am5d$ by ins]t+ vot+    
in/ruction1 aft] cons5t14