determine that the vote is in the best economic inter-
est of the customers. 
(c) COVERED ENTITY DEFINED.—In this section, the 
term ‘‘covered entity’’ means an investment advisor, asset 
manager, or pension fund with more than $100,000,000 
in assets under management. 
SEC. 5. TRANSPARENCY REGARDING ESG FUNDS. 
Section 10 of the Securities Act of 1933 (15 U.S.C. 
77j) is amended by adding at the end the following: 
‘‘(g) TRANSPARENCY REGARDING ESG FUNDS.—An 
investment company that holds itself out as offering an 
index fund under which investments are made pursuant 
to a set of environmental, social, or governance standards 
shall disclose in tabular form on the first page of each 
prospectus required pursuant to this section the 1-, 3-, 
and 5-year annual returns and fees charged to investors 
with respect to such fund compared with the annual re-
turns and fees charged to investors for the most readily 
comparable broad-based index fund offered by such invest-
ment company under which investments are not made pur-
suant to such standards, or if such investment company 
does not offer a comparable index fund, a reasonably simi-
lar comparison to a readily comparable broad-based index 
fund.’’. 
VerDate Sep 11 2014 
05:24 Dec 22, 2022
Jkt 039200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H9527.IH
H9527
kjohnson on DSK79L0C42PROD with BILLS
SEC. 6. RESUBMISSION THRESHOLDS FOR SHAREHOLDER 
PROPOSALS. 
Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is amended by adding at the end the fol-
lowing: 
‘‘(k) EXCLUSION OF CERTAIN SHAREHOLDER PRO-
POSAL RESUBMISSIONS.—A shareholder proposal may be 
excluded from any proxy or consent solicitation material 
for an annual meeting of the shareholders of an issuer 
if the proposal— 
‘‘(1) is not germane (without regard to whether 
the proposal involves a significant social policy 
issue); or 
‘‘(2) addresses substantially the same subject 
matter (without regard to whether the proposal in-
volves a significant social policy issue) as a proposal 
previously included in the proxy or consent solicita-
tion material for an annual meeting of the share-
holders of an issuer— 
‘‘(A) for a meeting of the shareholders con-
ducted in the preceding 5 years; and 
‘‘(B) if the most recent vote— 
‘‘(i) occurred in the preceding 3 years; 
and 
VerDate Sep 11 2014 
05:24 Dec 22, 2022
Jkt 039200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H9527.IH
H9527
kjohnson on DSK79L0C42PROD with BILLS
‘‘(ii)(I) if voted on once during such 
period, received less than 5 percent of the 
votes; 
‘‘(II) if voted on twice during such pe-
riod, received less than 15 percent of the 
votes; or 
‘‘(III) if voted on three or more times 
during such period, received less 25 per-
cent of the votes.’’. 
SEC. 7. PROHIBITION ON ROBOVOTING. 
Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is further amended by adding at the end 
the following: 
‘‘(l) PROHIBITION ON ROBOVOTING.— 
‘‘(1) IN GENERAL.—The Commission shall issue 
final rules prohibiting the use of robovoting with re-
spect to votes related to proxy or consent solicitation 
materials. 
‘‘(2) 
ROBOVOTING
DEFINED.—The 
term 
‘robovoting’ means the practice of automatically vot-
ing in a manner consistent with the recommenda-
tions of a proxy advisory firm.’’. 
VerDate Sep 11 2014 
05:24 Dec 22, 2022
Jkt 039200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H9527.IH
H9527
kjohnson on DSK79L0C42PROD with BILLS
SEC. 8. LIABILITY FOR CERTAIN FAILURES TO DISCLOSE 
MATERIAL INFORMATION. 
Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is further amended by adding at the end 
the following: 
‘‘(m) FALSE
OR MISLEADING STATEMENTS.—For 
purposes of section 18, failure to disclose material infor-
mation regarding proxy voting advice that makes a rec-
ommendation to a security holder as to its vote, consent, 
or authorization on a specific matter for which security 
holder approval is solicited, and that is furnished by a per-
son that markets its expertise as a provider of such proxy 
voting advice, separately from other forms of investment 
advice, and sells such proxy voting advice for a fee, shall 
be considered to be false or misleading with respect to a 
material fact.’’. 
SEC. 9. STUDY OF CERTAIN ISSUES WITH RESPECT TO 
SHAREHOLDER PROPOSALS AND PROXY AD-
VISORY FIRMS. 
Not later than 180 days after the date of the enact-
ment of this Act, and every 5 years thereafter, the Securi-
ties and Exchange Commission, including the Office of the 
Advocate for Small Business Capital Formation, shall 
carry out a study and submit a report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
VerDate Sep 11 2014 
05:24 Dec 22, 2022
Jkt 039200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H9527.IH
H9527
kjohnson on DSK79L0C42PROD with BILLS
Representatives on shareholder proposals and proxy advi-
sory firms that includes, with respect to, in the case of 
the first report, the preceding 10 years, and in the case 
of each subsequent report, the preceding 5 years, the fol-
lowing: 
(1) The costs that issuers incurred in respond-
ing to— 
(A) politically, environmentally, or socially 
motivated shareholder proposals; and 
(B) shareholder proposals that failed to be 
agreed to more than once. 
(2) The amount of fees that public companies 
paid to proxy advisory firms and persons associated 
with proxy advisory firms. 
(3) The source of funds with respect to pay-
ment of such fees. 
(4) The academic or professional qualifications 
of the staff members that provide proxy advisory 
services at proxy advisory firms. 
(5) The number of shareholder proposals that, 
if adopted, would require an issuer to violate a State 
or Federal law. 
(6) An estimate of the costs that issuers would 
incur if such proposals were adopted. 
Æ 
VerDate Sep 11 2014 
21:40 Dec 22, 2022
Jkt 039200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6301
E:\BILLS\H9527.IH
H9527
kjohnson on DSK79L0C42PROD with BILLS