Protecting Americans’ Savings Act
- Sponsor
- Rep. Nunn, Zachary [R-IA-3]
- Committees
- Financial Services Committee (primary)
- Last action
- Apr 20, 2026
Bottom line
The bill aims to increase independent decision-making in proxy voting by institutional investors, reducing the influence of proxy advisory firms and clarifying voting obligations.
What it actually does
This bill amends the Securities Exchange Act of 1934 to prohibit institutional investors from automatically voting proxies based on proxy advisory firm recommendations without independent review, a practice termed 'robovoting'. It also restricts institutional investors from outsourcing voting decisions to entities other than SEC-registered investment advisers or broker-dealers with fiduciary duties. Furthermore, it clarifies that no person is required to cast proxy votes unless a fiduciary duty or specific SEC rule mandates it.
Proponents argue
Proponents argue that this bill protects Americans' savings by ensuring that institutional investors, who manage significant retirement and investment funds, exercise independent judgment rather than blindly following proxy advisory firm recommendations. They contend that 'robovoting' can lead to uniform, potentially misguided, corporate governance decisions that do not always align with long-term shareholder value, and that the bill promotes greater accountability and thoughtful engagement in corporate elections.
Opponents contend
Opponents contend that this bill imposes unnecessary burdens on institutional investors and could reduce efficient shareholder oversight. They argue that proxy advisory firms provide valuable, cost-effective research and recommendations, enabling institutional investors to fulfill their fiduciary duties across vast portfolios. Critics suggest that restricting their use could lead to less informed voting, reduced shareholder engagement, and potentially empower corporate management by weakening independent checks.
The bill text is very short and straightforward, making it accessible for a quick read and easy to understand its core provisions.
Section 2, Subsection (l) of the Securities Exchange Act of 1934 (15 U.S.C. 78n)
Prohibition on Robovoting
This provision directs the Securities and Exchange Commission (SEC) to create rules that ban 'robovoting'. Robovoting is defined as the automatic casting of votes in corporate proxy or consent solicitations based on recommendations from a proxy advisory firm, or using their electronic platform, without the institutional investor conducting their own independent review and analysis of the proposals.
Supporters argue
Supporters argue that prohibiting robovoting ensures institutional investors make thoughtful, independent decisions that are truly in the best interest of their beneficiaries, rather than relying on a 'one-size-fits-all' approach from proxy advisory firms. This promotes better corporate governance and protects long-term investment value.
Critics contend
Opponents contend that 'robovoting' is a mischaracterization, and that institutional investors often use proxy advisory firm recommendations as a starting point for their own informed decisions. They argue that requiring extensive independent review for every vote across thousands of portfolio companies is impractical and costly, potentially leading to less engagement or higher operational expenses for investors.
Tradeoffs
This provision balances the desire for independent, thoughtful voting decisions by institutional investors against the practical challenges and costs associated with conducting extensive, in-house analysis for every proxy vote. It also creates tension between the perceived efficiency of proxy advisory services and concerns about their concentrated influence.
Section 2, Subsection (m) of the Securities Exchange Act of 1934 (15 U.S.C. 78n)
Prohibition on Outsourcing Voting Decisions by Institutional Investors
This provision prevents institutional investors from delegating their proxy voting decisions to any third party, with a specific exception. They can only outsource these decisions to an investment adviser or a broker-dealer that is registered with the SEC (or exempt from registration) and has a fiduciary duty or 'best interest' obligation to the institutional investor.
Section 2, Subsection (n) of the Securities Exchange Act of 1934 (15 U.S.C. 78n)
No Requirement To Vote
This provision clarifies that no individual or entity is legally compelled to cast votes related to proxy or consent solicitation materials, unless they are specifically obligated to do so by a pre-existing fiduciary duty or by SEC Rule 206(4)-6. This rule generally requires investment advisers to vote client proxies in the client's best interest.