INDEX Act

The INDEX Act requires investment advisers managing passively managed funds (like index funds) to follow voting instructions from the fund's actual investors for non-routine corporate proposals (e.g., major mergers, governance changes). It applies when an adviser controls over 1% of a company's voting shares through such funds, mandating they distribute voting materials and wait 5 business days for instructions. Advisers may still vote freely on routine matters (e.g., board elections) or use a "mirror voting" exception for majority-approved proposals. This directly affects retail investors in index funds and the advisers managing them, ensuring investor preferences shape votes on significant corporate issues.