,i  #aahth ,,congress  #ast ,session    
,h4 ,r4 #dfde  ,,in ,,the ,,house ,,of  
,,representatives  ,july #ad1 #bjbc,mr4 
,huizenga introduced the following bill2
 which was referred to the ,committee on
 ,financial ,services  ,a ,,bill  ,to   
amend the ,investment ,advisers ,act of 
#aidj with respect to proxy voting of   
passively managed funds1 and for other  
purposes4  #a4 ,short title ,this ,act  
may be cited as the ,empowering         
,shareholders ,act of #bjbc4  #b4 ,proxy
 voting of passively managed funds  7a7 
,in general ,the ,investment ,advisers  
,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a et
 seq47 is amended by inserting after    
section #bjh 7#ae ,u4,s4,c4 #hj;b-#h7   
the following3  #bjh;,a4 ,proxy voting  
of passively managed funds  7a7         
,investment adviser proxy voting  7#a7  
,in general ,an investment adviser that 
holds authority to vote a proxy         
solicited by an issuer pursuant to      
section #ad of the ,securities ,exchange
 ,act of #aicd 7#ae ,u4,s4,c4 #ghn7 in  

connection with any vote of covered     
securities held by a passively managed  
fund shall-- 7,a7 vote in accordance    
with the instructions of the beneficial 
owner of such covered securities2  7,b7 
vote in accordance with the voting      
instructions of such issuer2 or  7,c7   
abstain from voting4  7#b7 ,exception   
,paragraph 7#a7 shall not apply with    
respect to a vote on a routine matter4  
7b7 ,safe harbor ,with respect to a     
matter that is not a routine matter1 in 
the case of a vote described in         
subsection 7a77#a71 an investment       
adviser shall not be liable to any      
person under any law or regulation of   
the ,united ,states1 any constitution1  
law1 or regulation of any ,state or     
political subdivision thereof1 or under 
any contract or other legally           
enforceable agreement 7including any    
arbitration agreement71 for any of the  
following3 7#a7 ,not soliciting voting  
instructing from any person under       
subsection 7a77#a7 with respect to such 

vote4  7#b7 ,voting in accordance with  
the voting instructions of an issuer    
pursuant to subparagraph 7,b7 of such   
subsection4  7#c7 ,abstaining from      
voting in accordance with subparagraph  
7,c7 of such subsection4  7c7           
,definitions ,in this section3 7#a7     
,covered security ,the term covered     
security-- 7,a7 means a voting security1
 as that term is defined in section     
#b7;a7 of the ,investment ,company ,act 
of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a771  
in which a qualified fund is invested2  
and  7,b7 does not include any voting   
security 7as defined in subparagraph    
7,a77 of an issuer registered with the  
,commission as an investment company    
under section #h of the ,investment     
,company ,act of #aidj 7#ae ,u4,s4,c4   
#hj;a-#h74  7#b7 ,passively managed fund
 ,the term passively managed fund means 
a qualified fund that-- 7,a7 is designed
 to track1 or is derived from1 an index 
of securities or a portion of such an   
index2  7,b7 discloses that the         

qualified fund is a passive index fund2 
or  7,c7 allocates not less than #dj    
percent of the total assets of the      
qualified fund to an investment strategy
 that is designed to track1 or is       
derived from1 an index of securities or 
a portion of such an index fund4  7#c7  
,qualified fund ,the term qualified fund
 means-- 7,a7 an investment company1 as 
that term is defined in section #c of   
the ,investment ,company ,act of #aidj  
7#ae ,u4,s4,c4 #hj;a-#c72  7,b7 a       
private fund2  7,c7 an eligible deferred
 compensation plan1 as that term is     
defined in section #deg7;b7 of the      
,internal ,revenue ,code of #aihf2  7,d7
 a trust1 plan1 account1 or other entity
 described in section #c7;c77#aa7 of the
 ,investment ,company ,act of #aidj 7#ae
 ,u4,s4,c4 #hj;a-#c7;c77#aa772  7,e7 a  
plan maintained by an employer described
 in clause 7i71 7ii71 or 7iii7 of       
section #djc7;b77#a77;,a7 of the        
,internal ,revenue ,code of #aihf to    
provide annuity contracts described in  

section #djc7;b7 of such ,code2  7,f7 a 
common trust fund1 or similar fund1     
maintained by a bank2  7,g7 any fund    
established under section #hdch7;b77#a7 
of title #e1 ,united ,states ,code2 or  
7,h7 any separate managed account of a  
client of an investment adviser4  7#d7  
,registrant ,the term registrant means  
an issuer of covered securities4  7#e7  
,routine matter ,the term routine       
matter-- 7,a7 includes a proposal that  
relates to-- 7i7 an election with       
respect to the board of directors of the
 registrant2  7ii7 the compensation of  
management or the board of directors of 
the registrant2  7iii7 the selection of 
auditors2  7iv7 material conflicts2  7v7
 declassification2 or  7vi7 transactions
 that would transform the structure of  
the registrant1 including-- 7,i7 a      
merger or consolidation2 and  7,,ii7 the
 sale1 lease1 or exchange of all1 or    
substantially all1 of the property and  
assets of a registrant2 and  7,b7 does  
not include-- 7i7 a proposal that is not

 submitted to a holder of covered       
securities by means of a proxy statement
 comparable to that described in section
 #bdj4ad;a-#aja of title #ag1 ,code of  
,federal ,regulations1 or any successor 
regulation2  7ii7 a proposal that is--  
7,i7 the subject of a                   
counter-solicitation2 or  7,,ii7 part of
 a proposal made by a person other than 
the applicable registrant2 or  7iii7 any
 other matter determined by the         
,commission or an exchange registered   
under section #f of the ,securities     
,exchange ,act of #aicd 7#ae ,u4,s4,c4  
#gh;f7 to be not routine4  4  7b7       
,effective date ,the amendment made by  
this section shall take effect on the   
first ,august #a that occurs after the  
date that is #b years after the date of 
enactment of this ,act4