Sec. 3911. Proxy voting of passively managed funds
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/bill/118/hr/4790/eh/section-3911·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Investment Advisers Act of 1940 ( 15 U.S.C. 80b–1 et seq. ) is amended by inserting after section 208 ( 15 U.S.C. 80b–8 ) the following: An investment adviser that holds authority to vote a proxy solicited by an issuer pursuant to section 14 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78n ) in connection with any vote of covered securities held by a passively managed fund shall— vote in accordance with the instructions of the beneficial owner of a voting security of the passively managed fund; vote in accordance with the voting recommendations of such issuer; or abstain from voting but make reasonable efforts to be considered present for purposes of establishing a quorum.
Paragraph
(1)shall not apply with respect to a vote on a routine matter. With respect to a matter that is not a routine matter, in the case of a vote described in subsection (a)(1), an investment adviser shall not be liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision thereof, or under any contract or other legally enforceable agreement (including any arbitration agreement), for any of the following: Voting in accordance with the instructions of the beneficial owner of a voting security of the passively managed fund. Not soliciting voting instructing from any person under subsection (a)(1) with respect to such vote. Voting in accordance with the voting recommendations of an issuer pursuant to subparagraph
(B)of such subsection. Abstaining from voting in accordance with subparagraph
(C)of such subsection. Subsection
(a)shall not apply with respect to a foreign private issuer if the voting policy of the investment advisor with respect to such foreign private issuers is fully and fairly disclosed to beneficial owners, including the extent to which such policy differs from the voting policy for non-exempt issuers. In this section: The term covered security — means a voting security, as that term is defined in section 2(a) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–2(a) ), in which a qualified fund is invested; and does not include any voting security (as defined in subparagraph (A)) of an issuer registered with the Commission as an investment company under section 8 of the Investment Company Act of 1940 ( 15 U.S.C. 80a–8 ). The term passively managed fund means a qualified fund that— is designed to track, or is derived from, an index of securities or a portion of such an index; discloses that the qualified fund is a passive index fund; or allocates not less than 60 percent of the total assets of the qualified fund to an investment strategy that is designed to track, or is derived from, an index of securities or a portion of such an index fund. The term qualified fund means— an investment company, as that term is defined in section 3 of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3 ); a private fund; an eligible deferred compensation plan, as that term is defined in section 457(b) of the Internal Revenue Code of 1986; a trust, plan, account, or other entity described in section 3(c)(11) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3(c)(11) ); a plan maintained by an employer described in clause (i), (ii), or
(iii)of section 403(b)(1)(A) of the Internal Revenue Code of 1986 to provide annuity contracts described in section 403(b) of such Code; a common trust fund, or similar fund, maintained by a bank; any fund established under section 8438(b)(1) of title 5, United States Code; or any separate managed account of a client of an investment adviser. The term registrant means an issuer of covered securities. The term routine matter — includes a proposal that relates to— an election with respect to the board of directors of the registrant; the compensation of management or the board of directors of the registrant; the selection of auditors; a matter where there is a material conflict of interest between or among the issuer, members of management, members of the board of directors, or an affiliate of the issuer; declassification; or transactions that would transform the structure of the registrant, including— a merger or consolidation; and the sale, lease, or exchange of all, or substantially all, of the property and assets of a registrant; and does not include— a proposal that is not submitted to a holder of covered securities by means of a proxy statement comparable to that described in section 240.14a–101 of title 17, Code of Federal Regulations, or any successor regulation; or a proposal that is— the subject of a counter-solicitation; or part of a proposal made by a person other than the applicable registrant. . The amendment made by this section shall take effect on the first August 1 that occurs after the date that is 2 years after the date of enactment of this Act.
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U.S. Code
6 references not yet in our index
- 15 USC 80b–1
- 15 USC 80b–8
- 15 USC 80a–2(a)
- 15 USC 80a–8
- 15 USC 80a–3
- 15 USC 80a–3(c)(11)
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Sec. 3911
Proxy voting of passively managed funds
Cite15 USC 80b–1
Cite15 USC 80b–8
Cite15 USC 80a–2(a)
Cite15 USC 80a–8
Cite15 USC 80a–3
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