Bill · H.R. 3402· House(119-HR-3402)
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.
- Introduced
- 5/14/2025
- Last activity
- 5/14/2025 — Referred to the House Committee on Financial Services.
- Sponsored by
- Barry Loudermilk
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill seeks to amend the Securities Exchange Act of 1934 regarding institutional investment managers and their use of proxy advisory firms. It requires these managers to file an annual report with the Commission detailing how they voted on shareholder proposals. The report must include the percentage of votes consistent with advisory firm recommendations and an explanation of how those recommendations were considered. Additionally, managers must explain how votes align with their fiduciary duty and the level of involvement from investment professionals. Larger managers with at least $100 billion in assets face further requirements, such as performing economic analyses for certain votes.
Yes· 3 of 4
Does this make what the government does easier for the public to see?+5
The bill mandates more detailed annual reports to the Commission, increasing transparency of voting behaviors.
Does this give people more protection from unfair business practices?+5
The bill enhances transparency regarding how institutional managers vote on behalf of shareholders, potentially protecting investor interests.
Does this give the federal government more power?+3
The bill increases federal oversight of investment managers through new SEC disclosure requirements.
The opposite
Would business owners be better off under this?-3
The bill imposes increased reporting and economic analysis burdens on large institutional investment managers.
Who it would affect, and how
Potential Positive Impacts for People
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Increased Transparency through Annual Reporting: Institutional investment managers would be required to file an annual report with the Commission that explains how they voted on shareholder proposals and how often they followed proxy advisory firm recommendations (Section 1, Subparagraph A).
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Clarity on Decision-Making Processes: The bill requires explanations on how managers consider proxy advisory firm recommendations and the degree to which investment professionals are involved in voting decisions (Section 1, Subparagraph A, clause iii).
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Focus on Shareholder Economic Interests: Managers must provide a certification that their voting decisions are based solely on the best economic interest of the shareholders (Section 1, Subparagraph A, clause iv).
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Mandatory Economic Analysis for Large Managers: Managers with at least $100,000,000,000 in assets must perform an economic analysis for specific shareholder proposals to ensure the vote is in the best economic interest of the shareholders (Section 1, Subparagraph B, clause ii).
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Customer Information Clarification: Larger institutional investment managers must clarify in materials provided to customers that shareholders are not required to vote on every proposal (Section 1, Subparagraph B, clause i).
Potential Negative Impacts for People
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Increased Reporting Burdens for Managers: Institutional investment managers must provide detailed explanations regarding how they reconcile votes with fiduciary duties, how often votes were changed due to errors or new information, and the involvement of investment professionals (Section 1, Subparagraph A, clause iii).
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Additional Requirements for Large-Scale Managers: Managers with assets of $100,000,000,000 or more must perform specific economic analyses for shareholder proposals not consistent with a board of directors' recommendation and include those analyses in their annual reports (Section 1, Subparagraph B, clause ii and iii).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Governance And Ideology
- Improves Government Transparency+5Increases Federal Power+3
- Economy And Finance
- Improves Consumer Protection+5
- Demographic And Interest Groups
- Good For Retirees+3Good For Business Owners-3
- 5/14/2025
- Referred to the House Committee on Financial Services.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.