Restoring Shareholder Transparency Act of 2022
Bill: S.3945 | Sponsor: Sen. Hagerty, Bill (R-TN)
Policy area: Finance and Financial Sector

Summary:
Restoring Shareholder Transparency Act of 2022
This bill limits corporate shareholder proposals and revises proxy voting protocols for shareholders. Current shareholder proposal rules address who is eligible to submit shareholder proposals for a vote and the dissemination of information to voters through a proxy statement.
Under the bill, a company is not required to comply with these shareholder proposal rules. Instead, a company may opt-in to these rules.
The bill also revises these rules to require a shareholder hold at least 1% of the market value of the company's securities in order to submit a shareholder proposal. Under current rules, a shareholder's ability to submit a proposal depends upon the dollar amount of shares held and the length of time the shares have been held. It also revises these rules to provide that a company's allowed bases for exclusion of a proposal apply without regard to whether the proposal relates to a significant social policy issue. Under current guidance, a shareholder proposal may overcome a company's exclusion if the proposal is of social policy significance.
Finally, the bill generally prohibits proxy voting advice furnished by a person who provides such advice for a fee.

To amend the Securities Exchange Act of 1934 to address the 
    solicitation of proxy with respect to securities, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Restoring Shareholder Transparency 
Act of 2022''.

SEC. 2. PROXIES.

    Section 14(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78n(a)) is amended by adding at the end the following:
    ``(3) For the purposes of this subsection, soliciting any proxy or 
consent or authorization in respect of a security--
            ``(A) includes the furnishing of a form of proxy or other 
        communication to a holder of the security under circumstances 
        reasonably calculated to result in the procurement, 
        withholding, or revocation of a proxy, including any proxy 
        voting advice that--
                    ``(i) makes a recommendation to the security holder 
                as to the vote, consent, or authorization of the 
                security holder on a specific matter for which the 
                approval of the security holder is solicited; and
                    ``(ii) is furnished by a person that--
                            ``(I) markets the expertise of the person 
                        as a provider of such proxy voting advice, 
                        separately from other forms of investment 
                        advice; and
                            ``(II) sells such proxy voting advice for a 
                        fee; and
            ``(B) does not include the furnishing of any proxy voting 
        advice by a person that furnishes such advice only in response 
        to an unprompted request.''.

SEC. 3. SHAREHOLDER PROPOSALS.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended--
            (1) in section 6(b) (15 U.S.C. 78f(b)), by adding at the 
        end the following:
            ``(11) The rules of the exchange do not require an issuer 
        to be in compliance with section 240.14a-8 of title 17, Code of 
        Federal Regulations, or any successor regulation, as a 
        condition of having a security of the issuer listed on the 
        exchange.''; and
            (2) in section 14 (15 U.S.C. 78n), by adding at the end the 
        following:
    ``(k) Shareholder Proposals.--Notwithstanding any other provision 
of law or regulation, beginning on the date of enactment of this 
subsection, no issuer shall be subject to the requirements of section 
240.14a-8 of title 17, Code of Federal Regulations, or any successor 
regulation, unless the issuer agrees to be subject to those 
requirements.''.
    (b) Bases for Exclusion.--Not later than 1 year after the date of 
enactment of this Act, the Securities and Exchange Commission shall 
amend section 240.14a-8(i) of title 17, Code of Federal Regulations, or 
any successor regulation, to provide that all of the bases for 
exclusion of a proposal under that provision shall apply without regard 
to whether the proposal relates to a significant social policy issue.
    (c) Market Value.--Not later than 30 days after the date of 
enactment of this Act, the Securities and Exchange Commission shall 
amend section 240.14a-8(b)(1) of title 17, Code of Federal Regulations, 
or any successor regulation--
            (1) by amending clause (i) to read as follows: ``(i) You 
        must hold at least 1 percent of the market value of the 
        company's securities.''; and
            (2) by striking clause (vi).
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