I 
117TH CONGRESS 
2D SESSION 
H. R. 8521 
To amend the Investment Advisers Act of 1940 to require investment advisers 
for passively managed funds to arrange for pass-through voting of proxies 
for certain securities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 27, 2022 
Mr. HUIZENGA (for himself and Mr. LUETKEMEYER) introduced the following 
bill; which was referred to the Committee on Financial Services 
A BILL 
To amend the Investment Advisers Act of 1940 to require 
investment advisers for passively managed funds to ar-
range for pass-through voting of proxies for certain secu-
rities, 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. SHORT TITLE. 
This Act may be cited as the ‘‘INvestor Democracy 
is EXpected Act’’ or the ‘‘INDEX Act’’. 
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SEC. 2. PROXY VOTING OF PASSIVELY MANAGED FUNDS. 
(a) IN GENERAL.—The Investment Advisers Act of 
1940 (15 U.S.C. 80b–1 et seq.) is amended by inserting 
after section 208 (15 U.S.C. 80b–8) the following: 
‘‘SEC. 208A. REQUIREMENT WITH RESPECT TO PROXY VOT-
ING OF PASSIVELY MANAGED FUNDS. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘covered security’— 
‘‘(A) means a voting security, as that term 
is defined in section 2(a) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–2(a)), in 
which a qualified fund is invested; and 
‘‘(B) does not include any voting security 
(as defined in subparagraph (A)) of an issuer 
registered with the Commission as an invest-
ment company under section 8 of the Invest-
ment Company Act of 1940 (15 U.S.C. 80a–8); 
‘‘(2) the term ‘passively managed fund’ means 
a qualified fund that— 
‘‘(A) is designed to track, or is derived 
from, an index of securities or a portion of such 
an index; 
‘‘(B) discloses that the qualified fund is a 
passive fund or an index fund; 
‘‘(C) allocates not less than 40 percent of 
the total assets of the qualified fund to an in-
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vestment strategy that is designed to track, or 
is derived from, an index of securities or a por-
tion of such an index; or 
‘‘(D) discloses that an allocation described 
in subparagraph (C) follows an investment 
strategy that is passive or based on an index of 
securities; 
‘‘(3) the term ‘qualified fund’ means— 
‘‘(A) an investment company, as that term 
is defined in section 3 of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–3); 
‘‘(B) a private fund; 
‘‘(C) an eligible deferred compensation 
plan, as that term is defined in section 457(b) 
of the Internal Revenue Code of 1986; 
‘‘(D) an entity described in section 
3(c)(11) of the Investment Company Act of 
1940 (15 U.S.C. 80a–3(c)(11)); 
‘‘(E) a plan maintained by an employer de-
scribed in clause (i), (ii), or (iii) of section 
403(b)(1)(A) of the Internal Revenue Code of 
1986 to provide annuity contracts described in 
section 403(b) of such Code; 
‘‘(F) a common trust fund, or similar 
fund, maintained by a bank; 
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‘‘(G) any fund established under section 
8438(b)(1) of title 5, United States Code; or 
‘‘(H) any separate managed account of a 
client of an investment adviser; 
‘‘(4) the term ‘registrant’ means an issuer of 
covered securities; 
‘‘(5) the term ‘routine matter’ does not in-
clude— 
‘‘(A) a proposal that is not submitted to a 
holder of covered securities by means of a proxy 
statement comparable to that described in sec-
tion 240.14a–101 of title 17, Code of Federal 
Regulations, or any successor regulation; 
‘‘(B) a proposal that is— 
‘‘(i) the subject of a counter-solicita-
tion; or 
‘‘(ii) part of a proposal made by a 
person other than the applicable registrant; 
‘‘(C) a proposal that relates to a merger or 
consolidation, except when, with respect to a 
registrant— 
‘‘(i) the proposal is to merge with a 
wholly owned subsidiary of the registrant; 
and 
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‘‘(ii) holders of covered securities 
issued by the registrant that dissent to the 
proposal do not have rights of appraisal; 
‘‘(D) a proposal that relates to the sale, 
lease, or exchange of all, or substantially all, of 
the property and assets of a registrant; 
‘‘(E) an election for directors (or com-
parable positions); or 
‘‘(F) any other matter determined by the 
Commission or an exchange registered under 
section 6 of the Securities Exchange Act of 
1934 (15 U.S.C. 78f) to be not routine; and 
‘‘(6) the term ‘voting person’ means a person 
that provides voting instructions under subsection 
(b) or (c). 
‘‘(b) REQUIREMENT.— 
‘‘(1) IN GENERAL.—Subject to subsection (g), if 
an investment adviser holds authority to vote a 
proxy solicited pursuant to section 14 of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78n) in con-
nection with any vote of covered securities held by 
a passively managed fund, and the voting authority 
held by that investment adviser with respect to those 
covered securities (when combined with the voting 
authority of other persons controlled by, or under 
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common control with, that investment adviser) is 
more than 1 percent of the voting authority of the 
outstanding securities of the registrant subject to 
the vote, the investment adviser shall vote propor-
tionate amounts of those covered securities in ac-
cordance with the voting instructions of— 
‘‘(A) in the case of a passively managed 
fund that issues securities, persons holding se-
curities in the passively managed fund, such 
that, solely for the purposes of that vote, the 
percentage of securities held by such a person 
shall be deemed to be the percentage of the cov-
ered securities beneficially owned by that per-
son; and 
‘‘(B) in all cases other than a case de-
scribed in subparagraph (A), persons holding 
economic interests in the passively managed 
fund, such that, solely for purposes of that vote, 
the percentage of economic interests held by 
such a person shall be deemed to be the per-
centage of the covered securities beneficially 
owned by that person. 
‘‘(2) PROHIBITION.—If paragraph (1) applies 
with respect to any vote of covered securities and the 
investment adviser to which that paragraph applies 
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does not receiving voting instructions from all per-
sons described in subparagraphs (A) and (B) of that 
paragraph, the investment adviser may not vote the 
proportion of the shares of the covered securities for 
which the investment adviser does not receive voting 
instructions. 
‘‘(c) PASSIVELY
MANAGED
FUND
AS
SECURITY 
HOLDER OF ANOTHER PASSIVELY MANAGED FUND.—If 
a passively managed fund (referred to in this subsection 
as the ‘holding fund’) holds securities of another passively 
managed fund (referred to in this subsection as the ‘held 
fund’), and there is a vote with respect to covered securi-
ties held by the held fund, the investment adviser of the 
holding fund shall obtain voting instructions from persons 
holding securities in the holding fund, or to persons hold-
ing economic interests in the holding fund, as applicable, 
with respect to that vote in the manner described in sub-
section (b). 
‘‘(d) PROHIBITIONS.— 
‘‘(1) REIMBURSEMENT.—No person may seek 
reimbursement from a registrant, or require any ex-
penses incurred to be paid by a registrant, with re-
spect to the obligations imposed under this section. 
‘‘(2) PARTIAL
COMPLIANCE.—An investment 
adviser may not solicit voting instructions from 
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some, but not all, voting persons under subsection 
(b)(1) or (c), as applicable. 
‘‘(e) EXCEPTIONS.— 
‘‘(1) VOTING ON ROUTINE MATTERS.—Notwith-
standing subsections (b)(1), (b)(2), and (d)(2), if an 
investment adviser chooses not to solicit voting in-
structions with respect to a vote described in sub-
section (b)(1) or (c), or, as of the date that is 10 
days before such a vote, the investment adviser has 
not received voting instructions from a person de-
scribed in subparagraph (A) or (B) of subsection 
(b)(1) or subsection (c), as applicable, the invest-
ment adviser may vote the covered securities for 
which the investment adviser has not received voting 
instructions with respect to a routine matter. 
‘‘(2) MIRROR VOTING EXCEPTION FOR MATTERS 
REQUIRING
APPROVAL
OF
A
MAJORITY
OF
OUT-
STANDING
SECURITIES.—Notwithstanding 
sub-
sections (b)(1), (b)(2), and (d)(2), if a matter to be 
considered at a meeting of a registrant requires the 
approval of a majority of the outstanding securities 
of the registrant entitled to vote on the matter, an 
investment adviser to which any such provision ap-
plies may, with respect to any covered securities for 
which voting instructions have not been received, as 
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of the date that is 10 days before that vote, vote the 
uninstructed covered securities in a manner that is 
proportionate to the votes submitted on the matter 
by all other security holders of the registrant. 
‘‘(f) DISSEMINATION OF INFORMATION.— 
‘‘(1) IN
GENERAL.—Any investment adviser 
subject to the requirements of subsection (b) or (c) 
shall, with respect to the dissemination of informa-
tion and other materials to a voting person, comply 
with the following requirements, unless the voting 
person affirmatively declines to receive that informa-
tion and other materials: 
‘‘(A) Provide to the voting person— 
‘‘(i) a proxy statement, other proxy 
soliciting material, or an information state-
ment; 
‘‘(ii) an annual report from the appli-
cable registrant; 
‘‘(iii) a form of voting instruction to 
return to the investment adviser; and 
‘‘(iv) any control or identification 
number that the voting person needs to re-
turn to the investment adviser the voting 
instruction provided under subparagraph 
(B). 
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‘‘(B) Provide the voting person with not 
less than 5 business days after the date on 
which the voting person receives the materials 
provided under paragraph (1) to return those 
materials to the investment adviser. 
‘‘(2) ELECTRONIC DELIVERY.—All, or any por-
tion, of the materials that an investment adviser is 
required to provide under paragraph (1)(A) may be 
provided electronically, including an internet web 
site address provided by the applicable registrant or 
a third party. 
‘‘(3) OPTION FOR INVESTMENT ADVISERS.—An 
investment adviser may provide recommendations to 
voting persons with the material provided under 
paragraph (1)(A), or after providing the material 
under that paragraph, if the investment adviser per-
mits voting recommendations to be provided to vot-
ing persons by third parties on a nondiscriminatory 
basis and on a wide range of views. 
‘‘(4) SATISFACTION OF REQUIREMENTS BY PAS-
SIVELY MANAGED FUND.—With respect to any re-
quirement applicable to an investment adviser under 
this subsection, the requirement may be satisfied by 
the applicable passively managed fund, which may 
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