Blog: Reps. Huizenga, Luetkemeyer introduce INDEX Act – Financial Regulation News – Financial Regulation News

U.S. Reps. Blaine Luetkemeyer (R-MO) and Bill Huizenga (R-MI) introduced a bill in the House that would require investment advisors of index funds to vote proxies in accordance with the instructions of fund investors.

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The Investor Democracy is Expected (INDEX) Act would not leave the voting up to the adviser’s discretion. Simply put, the adviser would be responsible for passing through the proxies, collecting the instructions, and voting according to the investors’ wishes.

“The ‘Big 3’ investment advisors are the largest owners in 96 percent of the S&P 500 companies, which is an alarmingly high concentration of unchecked voting power,” Luetkemeyer, ranking member of the Subcommittee on Consumer Protection and Financial Institutions, said. “The INDEX Act will give investors – including anyone with a 401K, a pension plan, or who owns a mutual fund – a seat at the table and provide much-needed transparency in our corporate governance system.”

The proposed legislation is a companion bill to one already introduced in the U.S. Senate.

“Millions of retail investors are currently having their voices silenced. For too long, passive investors have lacked the ability to influence decisions made by publicly traded companies they own stock in. I am introducing the INDEX Act to restore voting power for retail investors,” Huizenga, ranking member of the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee, said. “Congress must act to hold asset management firms accountable for their politicized actions. The INDEX Act achieves this goal by increasing transparency and empowering retail investors.”

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