US HB3402

Institutional investment managers using proxy advisory firms must file annual reports with the SEC disclosing how they voted on shareholder proposals, the percentage of votes consistent with proxy advisory firm recommendations, and how those recommendations influenced voting decisions

Managers must certify that all voting decisions were based solely on the best economic interest of shareholders, defined as maximizing investment returns consistent with fund objectives and risk profiles

Investment managers with at least $100 billion in assets under management face additional requirements, including performing economic analysis before voting against board recommendations and informing customers that shareholders are not required to vote on every proposal

Annual reports must disclose how frequently votes were changed due to errors or new issuer information, and the degree to which investment professionals were involved in proxy voting decisions

Proxy advisory firms are defined as entities primarily engaged in providing proxy voting advice, research, analysis, ratings, or recommendations that constitute a solicitation under securities law