Empowering Shareholders Act of 2026

This bill amends the Investment Advisers Act of 1940 to introduce new requirements for how investment advisers handle proxy voting for passively managed funds . Specifically, it mandates that an investment adviser holding proxy authority for covered securities in such funds must vote in one of four ways: according to the beneficial owner's instructions, following the issuer's board recommendations, abstaining from the vote, or mirror voting to reflect other shareholders' elections. This ensures that the voting power associated with passively managed investments is exercised in a more defined and transparent manner. These new voting requirements do not apply to routine matters , which include proposals related to director elections, executive compensation, auditor selection, or declassification. The legislation also establishes a safe harbor , protecting investment advisers from liability when they adhere to these specified voting methods, thereby encouraging compliance without undue risk. Furthermore, the bill requires investment advisers to disseminate information to voting persons, including a form to select a published voting policy , allowing at least five business days for its return. This information can be provided electronically. The legislation defines a "passively managed fund" as one designed to track an index and committed to refraining from exercising control over an issuer through voting or investment authority.