1. Short title This Act may be cited as the INvestor Democracy is EXpected Act or the INDEX Act . 2. 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: 208A. Requirement with respect to proxy voting of passively managed funds (a) Definitions In this section— (1) 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) the term passively managed fund means a qualified fund that— (A) is designed to track, or is derived from, an index of securities or a portion of such an index; (B) discloses that the qualified fund is a passive fund or an index fund; (C) allocates not less than 40 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; or (D) discloses that an allocation described in subparagraph (C) follows an investment strategy that is passive or based on an index of securities; (3) the term qualified fund means— (A) an investment company, as that term is defined in section 3 of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3 ); (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) an 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