To amend the Securities Exchange Act of 1934 to require certain disclosures by institutional investment managers in connection with proxy advisory firms, and for other purposes.
Summary
What This Bill Does
This bill adds proxy-adviser disclosure duties to Securities Exchange Act section 13(f). An institutional investment manager that engages a proxy advisory firm and exercises voting power over covered equity securities must file an annual SEC report explaining how it voted on each shareholder proposal, the percentage of votes consistent with each retained proxy advisory firm's recommendations, how it considered proxy advice, how often it followed recommendations, how those votes reconcile with the fiduciary duty to vote in shareholders' best economic interest, how often votes changed because of errors or new issuer information, the degree of investment-professional involvement, and a certification that voting decisions were based solely on shareholders' best economic interest. Managers with at least $100 billion in assets under management must also tell customers in voting materials that shareholders need not vote on every proposal, perform an economic analysis before voting on shareholder proposals when not voting with an independent board majority recommendation, and include each analysis in the annual report. The bill defines best economic interest as maximizing investment returns over a time horizon consistent with fund objectives and risk management, and defines proxy advisory firm by proxy voting advice, research, analysis, ratings, or recommendations that constitute a solicitation.
Who Benefits and How
Shareholders benefit from annual SEC disclosures showing whether large managers follow proxy advisory firm recommendations and how votes serve economic interests. Corporate issuers benefit because managers must report how often votes changed because of errors or new issuer information. SEC investors using Form 13(f)-type data benefit from more information about proxy-voting processes and adviser influence. Customers of very large investment managers benefit from a notice that shareholders are not required to vote on every proposal.
Who Bears the Burden and How
Institutional investment managers using proxy advisory firms must prepare annual vote explanations, recommendation-alignment percentages, fiduciary reconciliations, and certifications. Managers with at least $100 billion in assets must perform and report economic analyses for many shareholder-proposal votes. Proxy advisory firms face more scrutiny because clients must disclose how heavily they rely on recommendations. SEC disclosure staff must receive and administer the new annual reports. Investment professionals may need to document their involvement in proxy voting decisions.
Key Provisions
- Requires annual SEC reports from institutional investment managers that engage proxy advisory firms and vote covered equity securities.
- Requires disclosure of vote explanations, proxy-adviser consistency percentages, fiduciary-duty reconciliation, vote changes, and investment-professional involvement.
- Requires best-economic-interest certification for proxy voting decisions.
- Adds customer notices and economic-analysis duties for managers with at least $100 billion in assets.
- Defines best economic interest and proxy advisory firm for the new disclosure regime.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Requires institutional investment managers that engage proxy advisory firms and vote covered equity securities to file annual SEC reports explaining shareholder-proposal votes, proxy-adviser alignment, fiduciary reconciliation, vote changes, investment-professional involvement, and best-economic-interest certification, with extra economic-analysis duties for managers with at least $100 billion in assets.
Key Policy Areas
Securities, Corporate Governance, Retirement
Primary Purpose
Requires institutional investment managers that engage proxy advisory firms and vote covered equity securities to file annual SEC reports explaining shareholder-proposal votes, proxy-adviser alignment, fiduciary reconciliation, vote changes, investment-professional involvement, and best-economic-interest certification, with extra economic-analysis duties for managers with at least $100 billion in assets.
Policy Domains
Resolution provisions
Identified Gains
- Shareholders
- Corporate issuers
- SEC investors
- Customers of very large investment managers
Identified Costs
- Institutional investment managers using proxy advisory firms
- Managers with at least $100 billion in assets
- Proxy advisory firms
- SEC disclosure staff
- Investment professionals
Legislative Progress
In CommitteeMr. Loudermilk introduced the following bill; which was referred to …
Referred to the House Committee on Financial Services.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Corporate issuers, Institutional investment managers using proxy advisory firms, Managers with at least $100 billion in assets
Positive-direction: Corporate issuers
Negative-direction: Institutional investment managers using proxy advisory firms, Managers with at least $100 billion in assets, Proxy advisory firms
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology