INDEX Act

Increased Voter Agency: Investment advisers for passively managed funds would be required to vote proportionate amounts of securities in accordance with the voting instructions of the persons holding those securities or economic interests. This allows individuals to have a direct say in how their investments are voted. (Section 2(b)(1))

Improved Information Access: Investment advisers must provide voting persons with essential materials, including proxy statements, annual reports, and forms for returning voting instructions. (Section 2(f)(1)(A))

Simplified Voting Process: The bill allows for the electronic delivery of all required materials, including via internet website addresses, making it easier for people to receive and use information. (Section 2(f)(2))

Transparency through Recommendations: Investment advisers are permitted to provide voting recommendations to help people make informed decisions, provided they allow third parties to provide a wide range of views. (Section 2(f)(3))

Administrative Burdens and Costs: While the bill states that a passively managed fund may cover expenses related to providing information, it also prohibits anyone from seeking reimbursement from a registrant for obligations imposed under this section. (Section 2(d)(1))

Limited Voting Rights on Certain Matters: For matters that are not "routine," an investment adviser may choose not to solicit voting instructions from any person. If they choose this route, they are not considered in violation of any duty for failing to vote those securities. (Section 2(g)(1))

Restrictions on Voting for Uninstructed Shares: If an investment adviser does not receive voting instructions for a certain proportion of shares, they are prohibited from voting those shares, except in specific cases involving routine matters or matters requiring a majority of outstanding securities. (Section 2(b)(2) and Section 2(e))