Index funds and ETFs managed by large firms control huge blocks of corporate stock on behalf of millions of everyday investors — and currently those fund managers decide how to vote all those shares at company meetings, not the individual investors who own them. This bill would require advisers of passively managed funds (including index funds, ETFs, 401(k) plans, and pension funds) to pass each investor's proportional share of proxy votes back to that investor, distributing voting materials and honoring whatever instructions come back. If an investor doesn't respond, their shares go unvoted on major corporate decisions, or mirror other shareholders' votes when a majority of outstanding shares is required to decide an issue. The rule would take effect on the first August 1 at least two years after enactment.
Transparency & Accountability
- Pass-through proxy voting requirement — Index fund advisers must cast shareholder votes per each investor's proportional instructions rather than deciding independently
- Adviser discretion on non-routine votes — Uninstructed shares may not be voted by the adviser on non-routine corporate matters such as mergers or director elections
Congressional Summary
INvestor Democracy is EXpected Act or the INDEX Act This bill establishes guidelines for passively managed funds (e.g., index funds) that vote shares on behalf of fund investors in proxy shareholder votes. Under the bill, these funds generally must vote shares on a proportional basis according to instructions from fund investors.The bill establishes an exemption for routine matters and matters requiring approval of a majority of outstanding securities. Additionally, the bill establishes a safe harbor from these requirements for investment advisers.
Details
- Congress
- 119th
- Chamber
- Senate
- Status
- summarized
- Action
- Introduced in Senate
- Action Date
- 2025-05-08
- Date Added
- 2026-05-01
- Source
- Congress.gov →
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