The Empowering Shareholders Act of 2026 amends federal investment law to change how investment advisers vote shares on behalf of passively managed funds like index funds. Under the bill, investment advisers managing these funds must allow individual investors to direct how their shares are voted on corporate matters, follow the company's board recommendations, abstain from voting, or mirror the votes of other shareholders—rather than making voting decisions independently. The law applies to a wide range of investment vehicles including mutual funds, pension plans, 401(k) plans, and retirement accounts. The bill includes protections for investment advisers from liability when voting according to these new requirements and exempts foreign companies if their voting policies are clearly disclosed to investors. The law takes effect one year after enactment, giving investment advisers time to establish systems for collecting voting instructions from shareholders within a required five-business-day timeframe.
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