,i #aaith ,,congress #b;d ,session ,h4 ,r4 #hbfe ,,in ,,the ,,house ,,of ,,representatives ,april #ad1 #bjbf,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 to establish requirements for proxy voting of passively managed funds1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,empowering ,shareholders ,act of #bjbf4 #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 7which may include the selection of a published voting policy7 of the beneficial owner 7or fiduciary or other designee with proxy voting authority on their behalf7 of a voting security of the passively managed fund2 7,b7 vote in accordance with the voting recommendations of the board of directors 7or similar governing body7 of such issuer2 7,c7 abstain from voting such securities but make reasonable efforts to be considered present for purposed of establishing a quorum2 or 7,d7 pursuant to rules issued by the ,commission1 instruct vote tabulators to make a reasonable effort to mirror vote shares to reflect the elections of the other shareholders in the covered security4 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 routine or non-routine vote1 voted in the manner required by 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 ,voting in accordance with the instructions of the beneficial owner 7or that beneficial owner's designee with proxy voting authority7 of a voting security of the passively managed fund4 7#b7 ,not soliciting voting instructions from any person4 7#c7 ,voting in accordance with the voting recommendations of an issuer under subsection 7a77#a77;,b7 with respect to such vote4 7#d7 ,abstaining from voting in accordance with subsection 7a77#a77;,c7 with respect to such vote4 7#e7 ,instructing vote tabulators to make a reasonable effort to mirror vote shares to reflect the elections of the other shareholders in a covered security1 pursuant to rules issued by the ,commission described in subsection 7a77#a77;,d74 7c7 ,foreign private issuers exemption ,subsection 7a7 shall not apply with respect to a foreign private issuer if the published voting policy of the investment advisor with respect to such foreign private issuer is fully and fairly disclosed to beneficial owners1 including the extent to which such policy differs from the published voting policy for non-exempt issuers4 7d7 ,dissemination of information 7#a7 ,in general ,any investment adviser subject to the requirements of subsection 7a77#a7 shall1 with respect to the dissemination of information and other material to a voting person1 comply with the following requirements1 unless the voting person affirmatively declines to receive that information and other material3 7,a7 ,provide the voting person 7or the relevant intermediary with whom the investment adviser has access7 with a form to select a published voting policy4 7,b7 ,provide the voting person with not less than #e business days after the date on which the voting person receives the form described under subparagraph 7,a7 to return that form to the investment adviser4 7#b7 ,electronic delivery ,all1 or any portion1 of the materials that an investment adviser is required to provide under paragraph 7#a77;,a7 may be provided electronically1 including through-- 7,a7 an internet website2 7,b7 another digital1 internet1 or electronic-based information repository2 or 7,c7 a mobile application4 7e7 ,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-- 7,a7 that-- 7i7 is designed to track1 or is derived from1 an index of securities or a portion of such an index2 7ii7 discloses that the qualified fund is a passive index fund2 or 7iii7 allocates not less than #fj 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 fund2 and 7,b7 that commits to refrain from exercising control over an issuer through voting or investment authority4 7#c7 ,published voting policy ,the term published voting policy means-- 7,a7 a policy that-- 7i7 articulates how proportionate shares would be expected to be voted in anticipated proxy voting matters2 and 7ii7 is made available to investors1 including via website or other electronic means2 and 7,b7 in the case of a policy of a passively managed fund or an investment adviser1 a policy that does not-- 7i7 seek to set the strategy or day-to-day management decisions of the issuer2 7ii7 involve submitting shareholder proposals2 7iii7 seek to nominate directors2 and 7iv7 coordinate votes with other index managers4 7#d7 ,qualified fund ,the term qualified fund means-- 7,a7 an investment company2 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#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 a registrant2 7ii7 the compensation of management or the board of directors of a registrant2 7iii7 the selection of auditors2 or 7iv7 declassification2 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 or 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 registrant4 4 7b7 ,effective date ,the amendment made by this section shall take effect #a year after the date of enactment of this ,act4