I 
119TH CONGRESS 
1ST SESSION H. R. 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. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 14, 2025 
Mr. LOUDERMILK introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. DUTIES OF INVESTMENT ADVISORS, ASSET 
MANAGERS, AND PENSION FUNDS. 
Section 13(f) of the Securities Exchange Act of 1934 
(15 U.S.C. 78m(f)) is amended by adding at the end the 
following: 
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‘‘(7) DISCLOSURES BY INSTITUTIONAL INVESTMENT 
MANAGERS
IN CONNECTION WITH PROXY ADVISORY 
FIRMS.— 
‘‘(A) IN GENERAL.—Every institutional invest-
ment manager which uses the mails, or any means 
or instrumentality of interstate commerce in the 
course of its business as an institutional investment 
manager, which engages a proxy advisory firm, and 
which exercises voting power with respect to ac-
counts holding equity securities of a class described 
in subsection (d)(1) or otherwise becomes or is 
deemed to become a beneficial owner of any security 
of a class described in subsection (d)(1) upon the 
purchase or sale of a security-based swap that the 
Commission may define by rule, shall file an annual 
report with the Commission containing— 
‘‘(i) an explanation of how the institutional 
investment manager voted with respect to each 
shareholder proposal; 
‘‘(ii) the percentage of votes cast on share-
holder proposals that were consistent with 
proxy advisory firm recommendations, for each 
proxy advisory firm retained by the institutional 
investment manager; 
‘‘(iii) an explanation of— 
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‘‘(I) how the institutional investment 
manager took into consideration proxy ad-
visory firm recommendations in making 
voting decisions, including the degree to 
which the institutional investment manager 
used those recommendations in making 
voting decisions; 
‘‘(II) how often the institutional in-
vestment manager voted consistent with a 
recommendation made by a proxy advisory 
firm, expressed as a percentage; 
‘‘(III) how such votes are reconciled 
with the fiduciary duty of the institutional 
investment manager to vote in the best 
economic interests of shareholders; 
‘‘(IV) how frequently votes were 
changed when an error occurred or due to 
new information from issuers; and 
‘‘(V) the degree to which investment 
professionals of the institutional invest-
ment manager were involved in proxy vot-
ing decisions; and 
‘‘(iv) a certification that the voting deci-
sions of the institutional investment manager 
were based solely on the best economic interest 
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of the shareholders on behalf of whom the insti-
tutional investment manager holds shares. 
‘‘(B) REQUIREMENTS
FOR
LARGER
INSTITU-
TIONAL
INVESTMENT
MANAGERS.—Every institu-
tional investment manager described in subpara-
graph (A) that has assets under management with 
an aggregate fair market value on the last trading 
day in any of the preceding twelve months of at least 
$100,000,000,000 shall— 
‘‘(i) in any materials provided to customers 
and related to customers voting their shares, 
clarify that shareholders are not required to 
vote on every proposal; 
‘‘(ii) with respect to each shareholder pro-
posal for which the institutional investment 
manager votes (other than votes consistent with 
the recommendation of a board of directors 
composed of a majority of independent direc-
tors) perform an economic analysis before mak-
ing such vote, to determine that the vote is in 
the best economic interest of the shareholders 
on behalf of whom the institutional investment 
manager holds shares; and 
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‘‘(iii) include each economic analysis re-
quired under clause (ii) in the annual report re-
quired under subparagraph (A). 
‘‘(C) DEFINITIONS.—In this paragraph: 
‘‘(i) BEST
ECONOMIC
INTEREST.—The 
term ‘best economic interest’ means decisions 
that seek to maximize investment returns over 
a time horizon consistent with the investment 
objectives and risk management profile of the 
fund in which shareholders are invested. 
‘‘(ii) PROXY
ADVISORY
FIRM.—The term 
‘proxy advisory firm’— 
‘‘(I) means any person who is pri-
marily engaged in the business of pro-
viding proxy voting advice, research, anal-
ysis, ratings, or recommendations to cli-
ents, which conduct constitutes a solicita-
tion within the meaning of section 14; and 
‘‘(II) does not include any person that 
is exempt under law or regulation from the 
requirements otherwise applicable to per-
sons engaged in such a solicitation.’’. 
Æ 
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