WASHINGTON, March 3, 2026 /PRNewswire/ — New analysis of recent survey results from the Investment Company Institute (ICI) finds that the US fund proxy system is increasingly inefficient, expensive, and ineffective. The growing costs involved are imposed on fund shareholders, and the Securities and Exchange Commission (SEC) should reform this system.
“Fund proxy campaigns are costing funds and their shareholders hundreds of millions of dollars unnecessarily. Smart, targeted reforms such as lowering quorum requirements while increasing the required affirmative vote to a supermajority would cut down on the time and money involved. This would reduce the expenses ultimately borne by investors and save them from a barrage of unwanted phone calls, paper packages, and emails. We encourage the SEC to move forward with investor-centric modernization of the proxy system,” said Eric Pan, ICI President and CEO.
ICI recently conducted a survey of 62 member firms representing approximately $38 trillion, or 85%, of US‑registered fund assets. The report covered fund proxy campaigns conducted between 2020 and 2025, finding that, using a conservative estimate, total campaign costs ranged from $675 million to $1.14 billion. Numerous campaigns cost tens of millions of dollars each. This is despite the fact that the vast majority of matters voted on are non‑controversial and ultimately approved by wide margins.
While reaching quorum is both difficult and expensive, voting shareholders overwhelmingly support fund‑sponsored proposals. For example, funds seeking changes to diversification status driven by increased equity market concentration saw average approval rates reach 85% of shares present. Yet many proposals still failed or required repeated adjournments of shareholder meeting dates due to quorum challenges.
As fund shareholders are largely retail investors who own their funds through intermediaries such as investment advisers or broker-dealers, it is difficult for funds to identify and communicate directly with them. Prolonged solicitations and adjournments increase costs further.
To address these problems, ICI urges the SEC to introduce reforms to modernize the fund proxy framework.
Key recommendations include:
- Creating a new approval mechanism with a lower quorum of more than one-third combined with a ‘supermajority’ affirmative vote of at least 75%.
- Allowing fundamental policy changes with board approval and advance shareholder notice.
- Permitting fund boards to appoint more independent directors without requiring a shareholder vote.
- Removing exchange‑mandated annual meeting requirements for listed closed-end funds and business development companies.
- Allowing funds to adopt retail voting programs like those the SEC has allowed for operating companies.
- Reforming shareholder communication and proxy processing fee rules to allow funds to contact shareholders more directly and reduce costs.
- Streamlining proxy disclosure through layered, more shareholder‑friendly formats.
Click here to read the report.
Contact: media@ici.org
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SOURCE Investment Company Institute
