,i #aai? ,,congress #b;d ,session ,h4 ,r4 #hbfe ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,april #ad1 #bjbf,mr4 ,huiz5ga introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,f9ancial ,s]vices ,a ,,bill ,to am5d ! ,inve/m5t ,advis]s ,act ( #aidj to e/abli% requirem5ts = proxy vot+ ( passively manag$ funds1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,emp[]+ ,%>ehold]s ,act ( #bjbf4 #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 ,proxy vot+ ( passively manag$ funds 7a7 ,inve/m5t advis] proxy vot+ 7#a7 ,9 g5]al ,an inve/m5t advis] t holds au?ority to vote a proxy solicit$ by an issu] 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$ fund %all-- 7,a7 vote 9 accordance ) ! in/ructions 7:i* may include ! selection ( a publi%$ vot+ policy7 ( ! b5eficial own] 7or fiduci>y or o!r designee ) proxy vot+ au?ority on _! behalf7 ( a vot+ security ( ! passively manag$ fund2 7,b7 vote 9 accordance ) ! vot+ recomm5dations ( ! bo>d ( directors 7or simil> gov]n+ body7 ( su* issu]2 7,c7 ab/a9 f vot+ su* securities b make reasonable ef=ts to be consid]$ pres5t = purpos$ ( e/abli%+ a quorum2 or 7,d7 pursuant to rules issu$ by ! ,commission1 in/ruct vote tabulators to make a reasonable ef=t to mirror vote %>es to reflect ! elections ( ! o!r %>ehold]s 9 ! cov]$ security4 7#b7 ,exception ,p>agraph 7#a7 %all n apply ) respect to a vote on a r\t9e matt]4 7b7 ,safe h>bor ,) respect to a r\t9e or non-r\t9e vote1 vot$ 9 ! mann] requir$ by subsection 7a77#a71 an inve/m5t advis] %all n be liable to any p]son "u any law or regulation ( ! ,unit$ ,/ates1 any con/itution1 law1 or regulation ( any ,/ate or political subdivision !re(1 or "u any contract or o!r legally en=ceable agreem5t 7includ+ any arbitration agreem5t71 = any ( ! foll[+3 7#a7 ,vot+ 9 accordance ) ! in/ructions ( ! b5eficial own] 7or t b5eficial own]'s designee ) proxy vot+ au?ority7 ( a vot+ security ( ! passively manag$ fund4 7#b7 ,n solicit+ vot+ in/ructions f any p]son4 7#c7 ,vot+ 9 accordance ) ! vot+ recomm5dations ( an issu] "u subsection 7a77#a77;,b7 ) respect to su* vote4 7#d7 ,ab/a9+ f vot+ 9 accordance ) subsection 7a77#a77;,c7 ) respect to su* vote4 7#e7 ,in/ruct+ vote tabulators to make a reasonable ef=t to mirror vote %>es to reflect ! elections ( ! o!r %>ehold]s 9 a cov]$ security1 pursuant to rules issu$ by ! ,commission describ$ 9 subsection 7a77#a77;,d74 7c7 ,=eign private issu]s exemption ,subsection 7a7 %all n apply ) respect to a =eign private issu] if ! publi%$ vot+ policy ( ! inve/m5t advisor ) respect to su* =eign private issu] is fully & fairly disclos$ to b5eficial own]s1 includ+ ! ext5t to :i* su* policy diff]s f ! publi%$ vot+ policy = non-exempt issu]s4 7d7 ,dissem9ation ( in=mation 7#a7 ,9 g5]al ,any inve/m5t advis] subject to ! requirem5ts ( subsection 7a77#a7 %all1 ) respect to ! dissem9ation ( in=mation & o!r mat]ial to a vot+ p]son1 comply ) ! foll[+ requirem5ts1 unless ! vot+ p]son affirmatively decl9es to receive t in=mation & o!r mat]ial3 7,a7 ,provide ! vot+ p]son 7or ! relevant int]m$i>y ) :om ! inve/m5t advis] has access7 ) a =m to select a publi%$ vot+ policy4 7,b7 ,provide ! vot+ p]son ) n less ?an #e bus9ess days aft] ! date on :i* ! vot+ p]son receives ! =m describ$ "u subp>agraph 7,a7 to return t =m 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+ ?r\gh-- 7,a7 an int]net website2 7,b7 ano!r digital1 int]net1 or electronic-bas$ in=mation repository2 or 7,c7 a mobile application4 7e7 ,def9itions ,9 ?is section3 7#a7 ,cov]$ security ,! 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-#h74 7#b7 ,passively manag$ fund ,! t]m passively manag$ fund means a qualifi$ fund-- 7,a7 t-- 7i7 is design$ to track1 or is d]iv$ f1 an index ( securities or a portion ( su* an index2 7ii7 discloses t ! qualifi$ fund is a passive index fund2 or 7iii7 allocates n less ?an #fj 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 index fund2 & 7,b7 t commits to refra9 f ex]cis+ control ov] an issu] ?r\gh vot+ or inve/m5t au?ority4 7#c7 ,publi%$ vot+ policy ,! t]m publi%$ vot+ policy means-- 7,a7 a policy t-- 7i7 articulates h[ proportionate %>es w\ld be expect$ to be vot$ 9 anticipat$ proxy vot+ matt]s2 & 7ii7 is made available to inve/ors1 includ+ via website or o!r electronic means2 & 7,b7 9 ! case ( a policy ( a passively manag$ fund or an inve/m5t advis]1 a policy t does n-- 7i7 seek to set ! /rategy or day-to-day managem5t decisions ( ! issu]2 7ii7 involve submitt+ %>ehold] proposals2 7iii7 seek to nom9ate directors2 & 7iv7 coord9ate votes ) o!r index manag]s4 7#d7 ,qualifi$ fund ,! t]m qualifi$ fund means-- 7,a7 an inve/m5t company2 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 a tru/1 plan1 acc\nt1 or o!r 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]4 7#e7 ,r\t9e matt] ,! t]m r\t9e matt]-- 7,a7 includes a proposal t relates to-- 7i7 an election ) respect to ! bo>d ( directors ( a regi/rant2 7ii7 ! comp5sation ( managem5t or ! bo>d ( directors ( a regi/rant2 7iii7 ! selection ( auditors2 or 7iv7 declassification2 & 7,b7 does n include-- 7i7 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 or 7ii7 a proposal t is-- 7,i7 ! subject ( a c\nt]-solicitation2 or 7,,ii7 "p ( a proposal made by a p]son o!r ?an ! applicable regi/rant4 4 7b7 ,effective date ,! am5dm5t made by ?is section %all take effect #a ye> aft] ! date ( enactm5t ( ?is ,act4