Empowering Shareholders: New Proxy Voting Rules for Passively Managed Funds
This Act amends the rules for proxy voting by investment advisers managing passively managed funds. If you own shares in a passive fund (like an index ETF), the investment adviser must vote according to your instructions, the issuer's instructions, or abstain from voting on non-routine matters. This change grants individual investors greater control over corporate decisions made by the companies held within their passive investment funds.
Key points
Change in Voting Rules: Investment advisers managing passive funds must vote according to the beneficial owner's instructions, the issuer's instructions, or abstain from voting.
Increased Investor Control: This applies to matters that are not considered routine (e.g., mergers, asset sales, but not board elections or management compensation).
Safe Harbor for Advisers: Investment advisers are protected from legal liability if they do not solicit voting instructions, vote according to the issuer's instructions, or abstain from voting on non-routine matters.
Definition of Passive Fund: The Act defines a passively managed fund as one designed to track an index or one that discloses itself as a passive index fund.
Status:
Expired
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