H.R. 8286

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8286 Reported in House (RH)]

<DOC>

Union Calendar No. 618
119th CONGRESS
2d Session
H. R. 8286

[Report No. 119-712]

To amend the Federal securities laws with respect to the materiality of 
disclosure requirements, to establish the Public Company Advisory 
Committee, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 15, 2026

Mr. Steil (for himself and Mrs. Wagner) introduced the following bill; 
which was referred to the Committee on Financial Services

June 24, 2026

Additional sponsor: Mr. Meuser

June 24, 2026

Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed 
in italic]
[For text of introduced bill, see copy of bill as introduced on April 
15, 2026]

_______________________________________________________________________

A BILL

To amend the Federal securities laws with respect to the materiality of 
disclosure requirements, to establish the Public Company Advisory 
Committee, 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; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Protecting 
Americans' Retirement Savings From Politics Act''.
(b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

TITLE I--MANDATORY MATERIALITY REQUIREMENT

Sec. 101. Limitation on disclosure requirements.

TITLE II--PUBLIC COMPANY ADVISORY COMMITTEE

Sec. 201. Public Company Advisory Committee.

TITLE III--PROTECTING U.S. BUSINESS SOVEREIGNTY

Sec. 301. Study on detrimental impact of the Corporate Sustainability 
Due Diligence Directive and Corporate 
Sustainability Reporting Directive.

TITLE IV--CORPORATE GOVERNANCE EXAMINATION

Sec. 401. Study of certain issues with respect to proxy advisory firms 
and the proxy process.

TITLE V--REGISTRATION OF PROXY ADVISORY FIRMS

Sec. 501. Registration of proxy advisory firms.

TITLE VI--LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL 
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS

Sec. 601. Liability for certain failures to disclose material 
information or making of material 
misstatements.

TITLE VII--DUTIES OF INVESTMENT ADVISERS, ASSET MANAGERS, AND PENSION 
FUNDS

Sec. 701. Duties of investment advisers, asset managers, and pension 
funds.

TITLE VIII--PROTECTING AMERICANS' SAVINGS

Sec. 801. Requirements related to proxy voting.

TITLE IX--EMPOWERING SHAREHOLDERS

Sec. 901. Proxy voting of passively managed funds.

TITLE X--BEST INTEREST BASED ON PECUNIARY FACTORS

Sec. 1001. Protecting retail investors' savings.

TITLE I--MANDATORY MATERIALITY REQUIREMENT

SEC. 101. LIMITATION ON DISCLOSURE REQUIREMENTS.

(a) Securities Act of 1933.--Section 2(b) of the Securities Act of 
1933 (15 U.S.C. 77b(b)) is amended--
(1) in the subsection heading, by inserting ``; Limitation 
on Disclosure Requirements'' after ``Formation'';
(2) by striking ``Whenever'' and inserting the following:
``(1) In general.--Whenever''; and
(3) by adding at the end the following:
``(2) Limitation.--
``(A) In general.--Whenever pursuant to this title 
the Commission is engaged in rulemaking regarding 
disclosure obligations of issuers, the Commission shall 
expressly provide that an issuer is only required to 
disclose information in response to such disclosure 
obligations to the extent the issuer has determined 
that such information is material with respect to a 
voting or investment decision regarding the securities 
of such issuer.
``(B) Applicability.--Subparagraph (A) shall not 
apply with respect to the removal of any disclosure 
requirement with respect to an issuer.
``(C) Rule of construction.--For the purposes of 
this paragraph, information is considered material with 
respect to a voting or investment decision regarding 
the securities of an issuer if there is a substantial 
likelihood that a reasonable investor would view the 
failure to disclose that information as having 
significantly altered the total mix of information made 
available to the investor.''.
(b) Securities Exchange Act of 1934.--Section 3(f) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(f)) is amended--
(1) in the subsection heading, by inserting ``; Limitation 
on Disclosure Requirements'' after ``Formation'';
(2) by striking ``Whenever'' and inserting the following:
``(1) In general.--Whenever''; and
(3) by adding at the end the following:
``(2) Limitation.--
``(A) In general.--Whenever pursuant to this title 
the Commission is engaged in rulemaking regarding 
disclosure obligations of issuers, the Commission shall 
expressly provide that an issuer is only required to 
disclose information in response to such disclosure 
obligations to the extent the issuer has determined 
that such information is material with respect to a 
voting or investment decision regarding the securities 
of such issuer.
``(B) Applicability.--Subparagraph (A) shall not 
apply with respect to the removal of any disclosure 
requirement with respect to an issuer.
``(C) Rule of construction.--For the purposes of 
this paragraph, information is considered material with 
respect to a voting or investment decision regarding 
the securities of an issuer if there is a substantial 
likelihood that a reasonable investor would view the 
failure to disclose that information as having 
significantly altered the total mix of information made 
available to the investor.''.

TITLE II--PUBLIC COMPANY ADVISORY COMMITTEE

SEC. 201. PUBLIC COMPANY ADVISORY COMMITTEE.

The Securities Exchange Act of 1934 is amended by inserting after 
section 40 (15 U.S.C. 78qq) the following:

``SEC. 40A. PUBLIC COMPANY ADVISORY COMMITTEE.

``(a) Establishment and Purpose.--
``(1) Establishment.--There is established within the 
Commission the Public Company Advisory Committee (referred to 
in this section as the `Committee').
``(2) Purpose.--The Committee shall--
``(A) provide the Commission with advice on the 
rules, regulations, and policies of the Commission with 
regard to the Commission's mission of protecting 
investors, maintaining fair, orderly, and efficient 
markets, and facilitating capital formation, as they 
relate to--
``(i) existing and emerging regulatory 
priorities of the Commission;
``(ii) issues relating to the public 
reporting and corporate governance of public 
companies;
``(iii) issues relating to the proxy 
process for shareholder meetings held by public 
companies;
``(iv) issues relating to trading in the 
securities of public companies; and
``(v) issues relating to capital formation;
``(B) not provide any advice with respect to any 
policies, practices, actions, or decisions concerning 
the Commission's enforcement program; and
``(C) submit to the Commission such findings and 
recommendations as the Committee determines are 
appropriate, including recommendations for proposed 
regulatory and legislative changes.
``(b) Membership.--
``(1) In general.--The membership of the Committee shall be 
not fewer than 10, and not more than 20, members appointed by 
the Commission from among individuals who--
``(A) are officers, directors, or senior officials 
of public companies registered with the Commission 
under the Securities Act of 1933 and this Act, except 
for those public companies that own asset management, 
fixed income, investment advisory, broker-dealer, or 
proxy services businesses;
``(B) are executives or other individuals with 
senior managerial responsibility in business, 
professional, trade, and industry associations that 
represent the interests of such public companies; and
``(C) are professional advisers and service 
providers to such public companies (including 
attorneys, accountants, investment bankers, and 
financial advisers).
``(2) Qualifications.--At least 50 percent of the Committee 
membership shall be drawn from individuals who would qualify 
for membership under paragraph (1)(A).
``(3) Term.--Each member of the Committee appointed under 
paragraph (1) shall serve for a term of 4 years. Vacancies 
among the members, whether caused by the resignation, death, 
removal, expiration of a term, or otherwise, shall be filled 
consistent with the Commission's procedures then in effect.
``(4) Staggered terms.--The members of the Committee shall 
serve staggered terms, with half of the initial members of the 
Committee each serving for 2 years and half serving for 4 
years.
``(5) Members not on other advisory committees.--Public 
companies and other organizations that are currently 
represented on any other Commission Advisory Committee are not 
eligible to have representatives also serve on the Public 
Company Advisory Committee.
``(6) Members not commission employees.--Members appointed 
under paragraph (1) shall not be considered to be employees or 
agents of the Commission solely because of membership on the 
Committee.
``(c) Chair; Vice Chair; Secretary; Assistant Secretary.--
``(1) In general.--The members of the Committee shall 
elect, from among the members of the Committee--
``(A) a Chair;
``(B) a Vice Chair;
``(C) a Secretary; and
``(D) an Assistant Secretary.
``(2) Term.--Each member elected under paragraph (1) shall 
serve for a term of 2 years in the capacity the member was 
elected under paragraph (1).
``(3) Subcommittees.--The Chair may create subcommittees 
that hold public or non-public meetings and provide 
recommendations to the full Committee.
``(d) Meetings.--
``(1) Frequency of meetings.--The Committee shall meet--
``(A) not less frequently than twice annually, at 
the call of the chair of the Committee; and
``(B) from time to time, at the call of the 
Commission.
``(2) Notice.--The Chair of the Committee shall give the 
members of the Committee written notice of each meeting, not 
later than 2 weeks before the date of the meeting.
``(e) Staff.--The Commission shall make available to the Committee 
such staff as the Chair of the Committee determines are necessary to 
carry out this section.
``(f) Review by Commission.--The Commission shall--
``(1) review the findings and recommendations of the 
Committee; and
``(2) each time the Committee submits a finding or 
recommendation to the Commission, promptly issue a public 
statement--
``(A) assessing the finding or recommendation of 
the Committee; and
``(B) disclosing the action, if any, the Commission 
intends to take with respect to the finding or 
recommendation.
``(g) Committee Findings.--Nothing in this section shall require 
the Commission to agree to or act upon any finding or recommendation of 
the Committee.
``(h) Nonapplicability of the Federal Advisory Committee Act.--
Chapter 10 of part I of title 5, United States Code, shall not apply to 
the Committee and the activities of the Committee.''.

TITLE III--PROTECTING U.S. BUSINESS SOVEREIGNTY

SEC. 301. STUDY ON DETRIMENTAL IMPACT OF THE CORPORATE SUSTAINABILITY 
DUE DILIGENCE DIRECTIVE AND CORPORATE SUSTAINABILITY 
REPORTING DIRECTIVE.

(a) Study.--The Securities and Exchange Commission shall conduct a 
study to examine and evaluate--
(1) the detrimental impact and potential detrimental impact 
of each of the Directives on--
(A) United States companies, consumers, and 
investors; and
(B) the economy of the United States;
(2) the extent to which each of the Directives aligns with 
international conventions and declarations on human rights and 
environmental obligations; and
(3) the legal basis for the extraterritorial reach of each 
of the Directives.
(b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Securities and Exchange Commission shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate, the 
Committee on Financial Services of the House of Representatives, the 
Secretary of State, the Secretary of Commerce, and the United States 
Trade Representative a report that includes--
(1) the results of the study conducted under this section; 
and
(2) recommendations for policymakers and relevant 
stakeholders on potential mitigating measures, alternative 
approaches, or modifications to each of the Directives that 
would address any concerns identified in the study.
(c) Access to Information.--The Securities and Exchange Commission 
may request from private entities such relevant data and information as 
the Securities and Exchange Commission determines necessary to carry 
out the study required under this section and such private entities 
shall provide such requested data and information to the Securities and 
Exchange Commission.
(d) Directives Defined.--In this section, the term ``Directives'' 
means--
(1) Directive (EU) 2024/1760 of the European Parliament and 
of the Council of 13 June 2024 on corporate sustainability due 
diligence;
(2) Directive (EU) 2022/2464 of the European Parliament and 
of the Council of 14 December 2022 on corporate sustainability 
reporting; and
(3) any directive of the European Parliament and of the 
Council that amends, supplements, replaces, or otherwise 
modifies a directive described in paragraph (1) or (2), 
including Directive (EU) 2026/470 of the European Parliament 
and of the Council of 26 February 2026.

TITLE IV--CORPORATE GOVERNANCE EXAMINATION

SEC. 401. STUDY OF CERTAIN ISSUES WITH RESPECT TO PROXY ADVISORY FIRMS 
AND THE PROXY PROCESS.

Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is 
amended by adding at the end the following:
``(k) Study of Certain Issues With Respect to Proxy Advisory Firms 
and the Proxy Process.--
``(1) In general.--Not later than 180 days after the date 
of the enactment of this subsection, and every 5 years 
thereafter, the Commission shall conduct a comprehensive study 
on proxy advisory firms and the proxy process.
``(2) Scope of study.--The studies required under paragraph 
(1) shall cover--
``(A) the previous 10 years, with respect to the 
initial study; and
``(B) the previous 5 years, with respect to each 
other study.
``(3) Contents.--Each study required under paragraph (1) 
shall address the following issues:
``(A) The financial and other incentives and 
obligations of all groups involved in the proxy 
process.
``(B) A consideration of whether financial and 
other incentives have created a process that no longer 
serves the economic interests of retail investors.
``(C) An analysis of whether regulations and 
financial incentives have created and protected the 
outsized influence of proxy advisors or a duopoly in 
proxy advice, and if so, what are the benefits and 
costs of that outsized influence or duopoly.
``(D) The costs incurred by issuers in responding 
to politically-, environmentally-, or socially-
motivated shareholder proposals.
``(E) An analysis of the impact that shareholder 
proposals have on discouraging private companies from 
going public.
``(F) A thorough assessment of the economic 
analysis, if any, conducted by proxy advisory firms and 
institutional shareholders when recommending or voting 
in favor of shareholder proposals.
``(G) A review of the extent to which institutional 
investors, who owe fiduciary duties, rely on proxy 
advisory firm recommendations.
``(H) An assessment of whether, in light of their 
significant influence on corporate actions and vote 
outcomes, proxy advisors are subject to sufficient and 
effective regulation to ensure that their policies and 
recommendations are accurate, free of conflicts, and 
benefit the best economic interest of shareholders at 
large.
``(4) Report.--At the completion of each study required 
under paragraph (1), the Commission shall issue a report to the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
Representatives that includes the results of the study.''.

TITLE V--REGISTRATION OF PROXY ADVISORY FIRMS

SEC. 501. REGISTRATION OF PROXY ADVISORY FIRMS.

(a) Amendment.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15G the following new 
section:

``SEC. 15H. REGISTRATION OF PROXY ADVISORY FIRMS.

``(a) Conduct Prohibited.--It shall be unlawful for a proxy 
advisory firm to make use of the mails or any means or instrumentality 
of interstate commerce to provide proxy voting advice, research, 
analysis, ratings or recommendations to any client, unless such proxy 
advisory firm is registered under this section.
``(b) Registration Procedures.--
``(1) Application for registration.--
``(A) In general.--A proxy advisory firm shall file 
with the Commission an application for registration, in 
such form as the Commission shall require, by rule, and 
containing the information described in subparagraph 
(B).
``(B) Required information.--An application for 
registration under this section shall contain--
``(i) a certification that the applicant is 
able to consistently provide proxy advice based 
on accurate information;
``(ii) with respect to clients of the 
applicant that vote shares held on behalf of 
shareholders, a certification that the 
applicant--
``(I) will provide proxy voting 
advice only in the best economic 
interest of those shareholders;
``(II) has the requisite expertise 
to ensure that voting recommendations 
are in the best economic interest of 
those shareholders unless otherwise 
specified; and
``(III) does not violate State or 
Federal law;
``(iii) information on the procedures and 
methodologies that the applicant uses to ensure 
that proxy voting recommendations are in the 
best economic interest of the ultimate 
shareholders;
``(iv) information on the organizational 
structure of the applicant;
``(v) an explanation of whether or not the 
applicant has in effect a code of ethics, and 
if not, the reasons therefor;
``(vi) a description of any potential or 
actual conflict of interest relating to the 
provision of proxy advisory services, including 
those arising out of or resulting from the 
ownership structure of the applicant or the 
provision of other services by the applicant or 
any person associated with the applicant;
``(vii) the policies and procedures in 
place to publicly disclose and manage conflicts 
of interest under subsection (f);
``(viii) information related to the 
professional and academic qualifications of 
staff tasked with providing proxy advisory 
services; and
``(ix) any other information and documents 
concerning the applicant and any person 
associated with such applicant as the 
Commission, by rule, may prescribe as necessary 
or appropriate in the public interest or for 
the protection of investors.
``(2) Review of application.--
``(A) Initial determination.--Not later than 90 
days after the date on which the application for 
registration is filed with the Commission under 
paragraph (1) (or within such longer period as to which 
the applicant consents) the Commission shall--
``(i) by order, grant registration; or
``(ii) institute proceedings to determine 
whether registration should be denied.
``(B) Conduct of proceedings.--
``(i) Content.--Proceedings referred to in 
subparagraph (A)(ii) shall--
``(I) include notice of the grounds 
for denial under consideration and an 
opportunity for hearing; and
``(II) be concluded not later than 
120 days after the date on which the 
application for registration is filed 
with the Commission under paragraph 
(1).
``(ii) Determination.--At the conclusion of 
such proceedings, the Commission, by order, 
shall grant or deny such application for 
registration.
``(iii) Extension authorized.--The 
Commission may extend the time for conclusion 
of such proceedings for not longer than 90 
days, if the Commission finds good cause for 
such extension and publishes its reasons for so 
finding, or for such longer period as to which 
the applicant consents.
``(C) Grounds for decision.--The Commission shall 
grant registration under this subsection--
``(i) if the Commission finds that the 
requirements of this section are satisfied; and
``(ii) unless the Commission finds (in 
which case the Commission shall deny such 
registration) that--
``(I) the applicant has failed to 
certify to the Commission's 
satisfaction that it is able to 
consistently provide proxy advice based 
on accurate information and to 
materially comply with the procedures 
and methodologies disclosed under 
paragraph (1)(B) and with subsections 
(f) and (g); or
``(II) if the applicant were so 
registered, its registration would be 
subject to suspension or revocation 
under subsection (d).
``(3) Public availability of information.--Subject to 
section 24, the Commission shall make the information and 
documents submitted to the Commission by a proxy advisory firm 
in its completed application for registration, or in any 
amendment submitted under paragraph (1) or (2) of subsection 
(c), publicly available on the Commission's website, or through 
another comparable, readily accessible means.
``(c) Update of Registration.--
``(1) Update.--Each registered proxy advisory firm shall 
promptly amend and update its application for registration 
under this section if any information or document provided 
therein becomes materially inaccurate, except that a registered 
proxy advisory firm is not required to amend the information 
required to be filed under subsection (b)(1)(B)(i) by filing 
information under this paragraph, but shall amend such 
information in the annual submission of the organization under 
paragraph (2) of this subsection.
``(2) Certification.--Not later than 90 calendar days after 
the end of each calendar year, each registered proxy advisory 
firm shall file with the Commission an amendment to its 
registration, in such form as the Commission, by rule, may 
prescribe as necessary or appropriate in the public interest or 
for the protection of investors--
``(A) certifying that the information and documents 
in the application for registration of such registered 
proxy advisory firm continue to be accurate in all 
material respects; and
``(B) listing any material change that occurred to 
such information or documents during the previous 
calendar year.
``(d) Censure, Denial, or Suspension of Registration; Notice and 
Hearing.--The Commission, by order, shall censure, place limitations on 
the activities, functions, or operations of, suspend for a period not 
exceeding 12 months, or revoke the registration of any registered proxy 
advisory firm if the Commission finds, on the record after notice and 
opportunity for hearing, that such censure, placing of limitations, 
suspension, or revocation is necessary for the protection of investors 
and in the public interest and that such registered proxy advisory 
firm, or any person associated with such firm, whether prior to or 
subsequent to becoming so associated--
``(1) has committed or omitted any act, or is subject to an 
order or finding, enumerated in subparagraph (A), (D), (E), 
(H), or (G) of section 15(b)(4), has been convicted of any 
offense specified in section 15(b)(4)(B), or is enjoined from 
any action, conduct, or practice specified in subparagraph (C) 
of section 15(b)(4), during the 10-year period preceding the 
date of commencement of the proceedings under this subsection, 
or at any time thereafter;
``(2) has been convicted during the 10-year period 
preceding the date on which an application for registration is 
filed with the Commission under this section, or at any time 
thereafter, of--
``(A) any crime that is punishable by imprisonment 
for 1 or more years, and that is not described in 
section 15(b)(4)(B); or
``(B) a substantially equivalent crime by a foreign 
court of competent jurisdiction;
``(3) is subject to any order of the Commission barring or 
suspending the right of the person to be associated with a 
registered proxy advisory firm;
``(4) fails to furnish the certifications required under 
subsections (b)(2)(C)(ii)(I) and (c)(2);
``(5) has engaged in one or more prohibited acts enumerated 
in paragraph (1);
``(6) fails to maintain adequate financial and managerial 
resources to consistently offer advisory services to clients 
that vote shares held on behalf of shareholders consistent with 
the best economic interest of those shareholders, including by 
failing to comply with subsections (f) or (g);
``(7) fails to maintain adequate expertise to ensure that 
proxy advisory services for clients that vote shares held on 
behalf of shareholders are tied to the best economic interest 
of those shareholders; or
``(8) engages in a prohibited act enumerated in subsection 
(j).
``(e) Termination of Registration.--
``(1) Voluntary withdrawal.--A registered proxy advisory 
firm may, upon such terms and conditions as the Commission may 
establish as necessary in the public interest or for the 
protection of investors, which terms and conditions shall 
include at a minimum that the registered proxy advisory firm 
will no longer conduct such activities as to bring it within 
the definition of proxy advisory firm in section 3(a)(82), 
withdraw from registration by filing a written notice of 
withdrawal to the Commission.
``(2) Commission authority.--In addition to any other 
authority of the Commission under this title, if the Commission 
finds that a registered proxy advisory firm is no longer in 
existence or has ceased to do business as a proxy advisory 
firm, the Commission, by order, shall cancel the registration 
under this section of such registered proxy advisory firm.
``(f) Management of Conflicts of Interest.--
``(1) Organization policies and procedures.--Each 
registered proxy advisory firm shall establish, maintain, and 
enforce written policies and procedures reasonably designed, 
taking into consideration the nature of the business of such 
registered proxy advisory firm and associated persons, to 
publicly disclose and manage any conflicts of interest that 
arise or would reasonably be expected to arise from such 
business.
``(2) Commission authority.--The Commission shall, within 
one year of the date of enactment of this section, issue final 
rules to prohibit, or require the management and public 
disclosure of, any conflicts of interest relating to the 
offering of proxy advisory services by a registered proxy 
advisory firm, including, without limitation, conflicts of 
interest relating to--
``(A) the manner in which a registered proxy 
advisory firm is compensated by the client, any 
affiliate of the client, or any other person for 
providing proxy advisory services;
``(B) business relationships, ownership interests, 
or any other financial or personal interests between a 
registered proxy advisory firm, or any person 
associated with such registered proxy advisory firm, 
and any client, or any affiliate of such client;
``(C) the formulation of proxy voting policies;
``(D) the execution, or assistance with the 
execution, of proxy votes if such votes are based upon 
recommendations made by the proxy advisory firm in 
which a person other than the issuer is a proponent; 
and
``(E) any other potential conflict of interest, as 
the Commission deems necessary or appropriate in the 
public interest or for the protection of investors.
``(3) Disclosure on factors influencing recommendations.--
Each registered proxy advisory firm shall annually disclose to 
the Commission and make publicly available the economic and 
other factors that a reasonable investor would expect to 
influence the recommendations of such proxy advisory firm, 
including the ownership composition of such proxy advisory firm 
and any meetings with, or feedback received from, outside 
entities.
``(g) Reliability of Proxy Advisory Firm Services.--
``(1) In general.--Each registered proxy advisory firm 
shall--
``(A) have staff and other resources sufficient to 
produce proxy voting recommendations that are based on 
accurate and current information and designed for 
clients that vote shares held on behalf of shareholders 
to advance the best economic interest of those 
shareholders unless otherwise specified;
``(B) implement procedures that permit issuers that 
are the subject of proxy voting recommendations--
``(i) access in a reasonable time to data 
and information used to make recommendations; 
and
``(ii) a reasonable opportunity to provide 
meaningful comment and corrections to such data 
and information, including the opportunity to 
present (in person or telephonically) details 
to the person responsible for developing such 
data and information prior to the publication 
of proxy voting recommendations to clients;
``(C) employ an ombudsman to receive complaints 
about the accuracy of information used in making 
recommendations from the companies that are the subject 
of the proxy advisory firm's voting recommendations and 
seek to resolve those complaints in a timely fashion 
and prior to the publication of proxy voting 
recommendations to clients; and
``(D) if the ombudsman is unable to resolve a 
complaint to a company's satisfaction prior to the 
publication of proxy voting recommendations to clients, 
include in the final report of the firm to clients--
``(i) a statement detailing the company's 
complaints, if requested in writing by the 
company; and
``(ii) a statement explaining why the proxy 
voting recommendation is in the best economic 
interest of shareholders.
``(2) Definitions.--In this subsection:
``(A) Data and information used to make 
recommendations.--The term `data and information used 
to make voting recommendations'--
``(i) means the financial, operational, or 
descriptive data and information on an issuer 
used by proxy advisory firms and any contextual 
or substantive analysis impacting the 
recommendation; and
``(ii) does not include the entirety of the 
proxy advisory firm's final report to its 
clients.
``(B) Reasonable time.--The term `reasonable 
time'--
``(i) means not less than 1 week before the 
publication of proxy voting recommendations for 
clients; and
``(ii) shall not otherwise interfere with a 
proxy advisory firm's ability to provide its 
clients with timely access to accurate proxy 
voting research, analysis, or recommendations.
``(h) Private Right of Action With Respect to Illegal 
Recommendations.--Any proxy advisory firm that endorses a proposal that 
is not supported by the issuer but is approved and subsequently found 
by a court of competent jurisdiction to violate State or Federal law 
shall be liable to the applicable issuer for the costs associated with 
the approval of such proposal, including implementation costs and any 
penalties incurred by the issuer, and any issuer seeking to enforce 
such liability may sue at law or in equity in any court of competent 
jurisdiction.
``(i) Designation of Compliance Officer.--Each registered proxy 
advisory firm shall designate an individual who reports directly to 
senior management as responsible for administering the policies and 
procedures that are required to be established pursuant to subsections 
(f) and (g), and for ensuring compliance with the securities laws and 
the rules and regulations thereunder, including those promulgated by 
the Commission pursuant to this section.
``(j) Prohibited Conduct.--
``(1) Prohibited acts and practices.--Not later than one 
year after the date of enactment of this section, the 
Commission shall issue final rules to prohibit any act or 
practice relating to the offering of proxy advisory services by 
a registered proxy advisory firm that the Commission determines 
to be unfair, coercive, or abusive, including any act or 
practice relating to--
``(A) advisory or consulting services (offered 
directly or indirectly, including through an affiliate) 
related to corporate governance issues; or
``(B) modifying a voting recommendation or 
otherwise departing from its adopted systematic 
procedures and methodologies in the provision of proxy 
advisory services, based on whether an issuer, or 
affiliate thereof, subscribes or will subscribe to 
other services or product of the registered proxy 
advisory firm or any person associated with such 
organization.
``(2) Rule of construction.--Nothing in paragraph (1), or 
in any rules or regulations adopted thereunder, may be 
construed to modify, impair, or supersede the operation of any 
of the antitrust laws (as defined in the first section of the 
Clayton Act, except that such term includes section 5 of the 
Federal Trade Commission Act, to the extent that such section 5 
applies to unfair methods of competition).
``(k) Annual Report.--
``(1) In general.--Each registered proxy advisory firm 
shall, not later than 90 calendar days after the end of each 
fiscal year, file with the Commission and make publicly 
available an annual report in such form as the Commission, by 
rule, may prescribe as necessary or appropriate in the public 
interest or for the protection of investors.
``(2) Contents.--Each annual report required under 
paragraph (1) shall include, at a minimum, disclosure by the 
registered proxy advisory firm of the following:
``(A) A list of shareholder proposals the staff of 
the registered proxy advisory firm reviewed in the 
prior fiscal year.
``(B) A list of the recommendations made in the 
prior fiscal year.
``(C) The economic analysis conducted to determine 
that final recommendations provided in the prior fiscal 
year (other than recommendations relating to an issuer-
sponsored proposal or recommendations consistent with 
that of a board of directors composed of a majority of 
independent directors) delivered to clients that vote 
shares held on behalf of shareholders were in the best 
economic interest of those shareholders.
``(D) The staff who reviewed and made 
recommendations on such proposals in the prior fiscal 
year.
``(E) The qualifications of such staff to ensure 
that each of the recommendations for clients that vote 
shares held on behalf of shareholders were tied to the 
best economic interest of those shareholders.
``(F) The recommendations made in the prior fiscal 
year where the proponent of such recommendation was a 
client of or received services from the proxy advisory 
firm.
``(G) A certification by the chief executive 
officer, chief financial officer, and the primary 
executive responsible for overseeing the compilation 
and dissemination of proxy voting advice that the final 
recommendations (other than recommendations relating to 
an issuer-sponsored proposal or recommendations 
consistent with that of a board of directors composed 
of a majority of independent directors) delivered to 
clients that vote shares held on behalf of shareholders 
in the last fiscal year--
``(i) were based on internal controls and 
procedures that are designed to ensure accurate 
information and that such internal controls and 
procedures are effective; and
``(ii) were based on the best economic 
interest of those shareholders unless otherwise 
specified.
``(H) The economic and other factors that a 
reasonable investor would expect to influence the 
recommendations of such proxy advisory firm, including 
the ownership composition of such proxy advisory firm.
``(3) Report format.--Each annual report required under 
paragraph (1) shall be made available in a structured, machine-
readable format, consistent with existing electronic reporting 
standards.
``(l) Transparent Policies.--Each registered proxy advisory firm 
shall file with the Commission and make publicly available its 
methodology for the formulation of proxy voting policies and voting 
recommendations to clients that vote shares held on behalf of 
shareholders and how that methodology ensures that the firm's voting 
recommendations are in the best economic interest of those shareholders 
unless otherwise specified.
``(m) Rules of Construction.--Registration under and compliance 
with this section does not constitute a waiver of, or otherwise 
diminish, any right, privilege, or defense that a registered proxy 
advisory firm may otherwise have under any provision of State or 
Federal law, including any rule, regulation, or order thereunder.
``(n) Regulations.--
``(1) New provisions.--Such rules and regulations as are 
required by this section or are otherwise necessary to carry 
out this section, including the application form required under 
subsection (a)--
``(A) shall be issued by the Commission, not later 
than 180 days after the date of enactment of this 
section; and
``(B) shall become effective not later than 1 year 
after the date of enactment of this section.
``(2) Review of existing regulations.--Not later than 270 
days after the date of enactment of this section, the 
Commission shall--
``(A) review its existing rules and regulations 
which affect the operations of proxy advisory firms; 
and
``(B) amend or revise such rules and regulations in 
accordance with the purposes of this section, and issue 
such guidance as the Commission may prescribe as 
necessary or appropriate in the public interest or for 
the protection of investors.
``(o) Applicability.--This section, other than subsection (m), 
which shall apply on the date of enactment of this section, shall apply 
on the earlier of--
``(1) the date on which regulations are issued in final 
form under subsection (n)(1); or
``(2) 270 days after the date of enactment of this section.
``(p) Best Economic Interest Defined.--In this section, the term 
`best economic interest' means decisions that seek to maximize 
investment returns over a time horizon consistent with the investment 
objectives and risk management profile of the fund in which the 
shareholders are invested.''.
(b) Conforming Amendment.--Section 17(a)(1) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78q(a)(1)) is amended by inserting 
``proxy advisory firm,'' after ``nationally recognized statistical 
rating organization,''.
(c) Proxy Advisory Firm Definitions.--Section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended--
(1) by redesignating the second paragraph (80) (relating to 
funding portal) as paragraph (81); and
(2) by adding at the end the following:
``(82) Proxy advisory firm.--The term `proxy advisory 
firm'--
``(A) means any person that--
``(i) makes a recommendation to a security 
holder as to the security holder's vote, 
consent, or authorization on a specific matter 
for which security holder approval is 
solicited;
``(ii) markets the person's expertise as a 
provider of such proxy voting advice separately 
from other forms of investment advice; and
``(iii) sells such proxy voting advice for 
a fee; and
``(B) does not include--
``(i) a registered investment adviser; or
``(ii) any person that is exempt under law 
or regulation from the requirements otherwise 
applicable to persons engaged in such a 
solicitation.
``(83) Person associated with a proxy advisory firm.--With 
respect to a proxy advisory firm--
``(A) a person is `associated' with the proxy 
advisory firm if the person is--
``(i) a partner, officer, or director of 
the proxy advisory firm (or any person 
occupying a similar status or performing 
similar functions);
``(ii) a person directly or indirectly 
controlling, controlled by, or under common 
control with the proxy advisory firm;
``(iii) an employee of the proxy advisory 
firm; or
``(iv) a person the Commission determines 
by rule is controlled by the proxy advisory 
firm; and
``(B) a person is not `associated' with the proxy 
advisory firm if the person only performs clerical or 
ministerial functions with respect to a proxy advisory 
firm.''.

TITLE VI--LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL 
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS

SEC. 601. LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL 
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS.

Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n) 
is amended by adding at the end the following:
``(l) False or Misleading Statements.--For purposes of subsection 
(a) and Rule 14a-9 (17 CFR 240.14a-9) and any successor rule, the 
failure to disclose material information (such as a proxy voting advice 
business's methodology, sources of information, or conflicts of 
interest) or the making of a material misstatement regarding proxy 
voting advice that makes a recommendation to a security holder as to 
the security holder's vote, consent, or authorization on a specific 
matter for which security holder approval is solicited, and that is 
furnished by a person that markets the person's 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.''.

TITLE VII--DUTIES OF INVESTMENT ADVISERS, ASSET MANAGERS, AND PENSION 
FUNDS

SEC. 701. DUTIES OF INVESTMENT ADVISERS, ASSET MANAGERS, AND PENSION 
FUNDS.

Section 13(f) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(f)) is amended by adding at the end the following:
``(7) Disclosures by institutional investment managers in 
connection with proxy advisory firms.--
``(A) In general.--Every institutional investment 
manager which uses the mails, or any means or 
instrumentality of interstate commerce in the course of 
its business as an institutional investment manager, 
which engages a proxy advisory firm, and which 
exercises voting power with respect to accounts holding 
equity securities of a class described in subsection 
(d)(1) or otherwise becomes or is deemed to become a 
beneficial owner of any security of a class described 
in subsection (d)(1) upon the purchase or sale of a 
security-based swap that the Commission may define by 
rule, shall file an annual report with the Commission 
containing--
``(i) an explanation of how the 
institutional investment manager voted with 
respect to each shareholder proposal;
``(ii) the percentage of votes cast on 
shareholder proposals that were consistent with 
proxy advisory firm recommendations, for each 
proxy advisory firm retained by the 
institutional investment manager;
``(iii) an explanation of--
``(I) how the institutional 
investment manager took into 
consideration proxy advisory firm 
recommendations in making voting 
decisions, including the degree to 
which the institutional investment 
manager used those recommendations in 
making voting decisions;
``(II) how often the institutional 
investment manager voted consistent 
with a recommendation made by a proxy 
advisory firm, expressed as a 
percentage;
``(III) how such votes are 
reconciled with the fiduciary duty of 
the institutional investment manager to 
vote in the best economic interests of 
shareholders;
``(IV) how frequently votes were 
changed when an error occurred or due 
to new information from issuers; and
``(V) the degree to which 
investment professionals of the 
institutional investment manager were 
involved in proxy voting decisions; and
``(iv) a certification that the voting 
decisions of the institutional investment 
manager were based solely on the best economic 
interest of the shareholders on behalf of whom 
the institutional investment manager holds 
shares.
``(B) Requirements for larger institutional 
investment managers.--Every institutional investment 
manager described in subparagraph (A) that has 
regulatory assets under management with an aggregate 
fair market value on the last trading day in any of the 
preceding twelve months of at least $100,000,000,000 
shall--
``(i) in any materials provided to 
customers and related to customers voting their 
shares, clarify that shareholders are not 
required to vote on every proposal;
``(ii) with respect to each shareholder 
proposal for which the institutional investment 
manager votes (other than votes consistent with 
the recommendation of a board of directors 
composed of a majority of independent 
directors) perform an economic analysis before 
making such vote, to determine that the vote is 
in the best economic interest of the 
shareholders on behalf of whom the 
institutional investment manager holds shares; 
and
``(iii) include each economic analysis 
required under clause (ii) in the annual report 
required under subparagraph (A).
``(C) Best economic interest defined.--In this 
paragraph, the term `best economic interest' means 
decisions that seek to maximize investment returns over 
a time horizon consistent with the investment 
objectives and risk management profile of the fund in 
which shareholders are invested.''.

TITLE VIII--PROTECTING AMERICANS' SAVINGS

SEC. 801. REQUIREMENTS RELATED TO PROXY VOTING.

Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n), 
as amended by section 601, is further amended by adding at the end the 
following:
``(m) Prohibition on Robovoting.--
``(1) In general.--The Commission shall issue final rules 
prohibiting the use of robovoting with respect to votes related 
to proxy or consent solicitation materials.
``(2) Robovoting defined.--In this subsection, the term 
`robovoting' means the practice of automatically voting in a 
manner consistent with the recommendations of a proxy advisory 
firm or on a proxy advisory firm's electronic voting platform 
with the proxy advisory firm's recommendations, in either case, 
without independent review and analysis.
``(n) Prohibition on Outsourcing Voting Decisions by Institutional 
Investors.--With respect to votes related to proxy or consent 
solicitation materials, an institutional investor may not outsource 
voting decisions to any person other than an investment adviser or a 
broker or dealer that is registered with the Commission, or is exempt 
from such registration, and has a fiduciary or best interest duty to 
the institutional investor.
``(o) No Requirement to Vote.--No person may be required to cast 
votes related to proxy or consent solicitation materials, unless 
obligated by their fiduciary duty or Rule 206(4)-6 (17 CFR 275.206(4)-
6).''.

TITLE IX--EMPOWERING SHAREHOLDERS

SEC. 901. 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. PROXY VOTING OF PASSIVELY MANAGED FUNDS.

``(a) Investment Adviser Proxy Voting.--
``(1) In general.--An investment adviser that holds 
authority to vote a proxy solicited by an issuer pursuant to 
section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 
78n) in connection with any vote of covered securities held by 
a passively managed fund shall--
``(A) vote in accordance with the instructions 
(which may include the selection or default choice of a 
published voting policy) of the beneficial owner (or 
fiduciary or other designee with investment and proxy 
voting authority on their behalf) of a voting security 
of the passively managed fund;
``(B) vote in accordance with the voting 
recommendations of the board of directors (or similar 
governing body) of such issuer;
``(C) abstain from voting such securities but make 
reasonable efforts to be considered present for 
purposes of establishing a quorum; or
``(D) pursuant to rules issued by the Commission, 
instruct vote tabulators to make a reasonable effort to 
mirror vote shares to reflect the elections of the 
other shareholders in the covered security.
``(2) Exception.--Paragraph (1) shall not apply with 
respect to a vote on a routine matter.
``(b) Safe Harbor.--With respect to a routine or non-routine vote, 
voted in the manner required by subsection (a)(1), an investment 
adviser shall not be liable to any person under any law or regulation 
of the United States, any constitution, law, or regulation of any State 
or political subdivision thereof, or under any contract or other 
legally enforceable agreement (including any arbitration agreement), 
for any of the following:
``(1) Voting in accordance with the instructions of the 
beneficial owner (or that beneficial owner's designee with 
investment and proxy voting authority) of a voting security of 
the passively managed fund.
``(2) Not soliciting voting instructions from any person.
``(3) Voting in accordance with the voting recommendations 
of an issuer under subsection (a)(1)(B) with respect to such 
vote.
``(4) Abstaining from voting in accordance with subsection 
(a)(1)(C) with respect to such vote.
``(5) Instructing vote tabulators to make a reasonable 
effort to mirror vote shares to reflect the elections of the 
other shareholders in a covered security, pursuant to rules 
issued by the Commission described in subsection (a)(1)(D).
``(c) Foreign Private Issuers Exemption.--Subsection (a) shall not 
apply with respect to a foreign private issuer if the published voting 
policy of the investment advisor with respect to such foreign private 
issuer is fully and fairly disclosed to beneficial owners, including 
the extent to which such policy differs from the published voting 
policy for non-exempt issuers.
``(d) Dissemination of Information.--
``(1) In general.--Any investment adviser subject to the 
requirements of subsection (a)(1) shall, with respect to the 
dissemination of information and other material to a voting 
person, comply with the following requirements, unless the 
voting person affirmatively declines to receive that 
information and other material:
``(A) Provide the voting person (or the relevant 
intermediary with whom the investment adviser has 
access) with a form to select a published voting 
policy.
``(B) Provide the voting person with not less than 
5 business days after the date on which the voting 
person receives the form described under subparagraph 
(A) to return that form to the investment adviser.
``(2) Electronic delivery.--All, or any portion, of the 
materials that an investment adviser is required to provide 
under paragraph (1)(A) may be provided electronically, 
including through--
``(A) an internet website;
``(B) another digital, internet, or electronic-
based information repository; or
``(C) a mobile application.
``(e) Definitions.--In this section:
``(1) Covered security.--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 investment company under 
section 8 of the Investment Company Act of 1940 (15 
U.S.C. 80a-8).
``(2) Passively managed fund.--The term `passively managed 
fund' means a qualified fund--
``(A) that--
``(i) is designed to track, or is derived 
from, an index of securities or a portion of 
such an index;
``(ii) discloses that the qualified fund is 
a passive index fund; or
``(iii) allocates not less than 60 percent 
of the total assets of the qualified fund to an 
investment strategy that is designed to track, 
or is derived from, an index of securities or a 
portion of such an index fund; and
``(B) that commits to refrain from exercising 
control over an issuer through voting or investment 
authority.
``(3) Published voting policy.--The term `published voting 
policy' means--
``(A) a policy that--
``(i) articulates how proportionate shares 
would be expected to be voted in anticipated 
proxy voting matters; and
``(ii) is made available to investors, 
including via website or other electronic 
means; and
``(B) in the case of a policy of a passively 
managed fund or an investment adviser, a policy that 
does not--
``(i) seek to set the strategy or day-to-
day management decisions of the issuer;
``(ii) involve submitting shareholder 
proposals;
``(iii) seek to nominate directors; and
``(iv) coordinate votes with other index 
managers.
``(4) Qualified fund.--The term `qualified fund' means--
``(A) an investment company;
``(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) a trust, plan, account, or other 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 described 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;
``(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.
``(5) Routine matter.--The term `routine matter'--
``(A) includes a proposal that relates to--
``(i) an election with respect to the board 
of directors of a registrant;
``(ii) the compensation of management or 
the board of directors of a registrant;
``(iii) the selection of auditors; or
``(iv) declassification; and
``(B) does not include--
``(i) a proposal that is not submitted to a 
holder of covered securities by means of a 
proxy statement comparable to that described in 
section 240.14a-101 of title 17, Code of 
Federal Regulations, or any successor 
regulation; or
``(ii) a proposal that is--
``(I) the subject of a counter-
solicitation; or
``(II) part of a proposal made by a 
person other than the applicable 
registrant.''.
(b) Effective Date.--The amendment made by this section shall take 
effect 1 year after the date of enactment of this Act.

TITLE X--BEST INTEREST BASED ON PECUNIARY FACTORS

SEC. 1001. PROTECTING RETAIL INVESTORS' SAVINGS.

(a) Best Interest Based on Pecuniary Factors.--Section 211(g) of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-11(g)) is amended by 
adding at the end the following:
``(3) Best interest based on pecuniary factors.--
``(A) In general.--For purposes of paragraph (1), 
when providing personalized investment advice, the best 
interest of a customer shall be determined using 
pecuniary factors, which, subject to applicable law, 
may not be subordinated to or limited by non-pecuniary 
factors, unless--
``(i) the customer provides informed 
consent, whether by e-delivery or e-sign, that 
such non-pecuniary factors be considered; or
``(ii) the personalized investment advice 
is consistent with the customer's written 
investment profile information.
``(B) Disclosure of pecuniary effects.--If a 
customer provides a broker, dealer, or investment 
adviser with the informed consent to consider non-
pecuniary factors described under subparagraph (A), the 
broker, dealer, or investment adviser shall provide 
qualitative disclosure of the potential pecuniary 
effects to the customer of prioritizing non-pecuniary 
factors over pecuniary factors in making investment 
decisions.
``(C) Pecuniary factor defined.--In this paragraph, 
the term `pecuniary factor' means a factor that a 
fiduciary prudently determines is expected to have a 
material effect on the risk or return of an investment 
based on investment objectives, risk tolerance, and 
time horizon.''.
(b) Rulemaking.--Not later than the end of the 12-month period 
beginning on the date of enactment of this Act, the Securities and 
Exchange Commission shall revise or issue such rules as may be 
necessary to implement the amendment made by paragraph (1).
(c) Applicability.--The amendment made by paragraph (1) shall apply 
to a recommendation made by a broker or dealer and investment advice 
provided by an investment adviser beginning on the date that is 12 
months after the date of enactment of this Act.
Union Calendar No. 618

119th CONGRESS

2d Session

H. R. 8286

[Report No. 119-712]

_______________________________________________________________________

A BILL

To amend the Federal securities laws with respect to the materiality of 
disclosure requirements, to establish the Public Company Advisory 
Committee, and for other purposes.

_______________________________________________________________________

June 24, 2026

Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed