Press Releases

Today, the House Financial Services Committee is holding a Capital Markets Subcommittee hearing, led by Subcommittee Chairman Ann Wagner (MO-02), to examine the evolving relationship between active and passive investing and to assess whether the current regulatory framework keeps pace with market innovation.

Read Subcommittee Chairman Wagner's opening remarks as prepared for delivery:

"Good morning, and thank you all for joining us today.

"Today’s hearing will examine the changing dynamics between active and passive investing, and whether our regulations are keeping pace with market innovation.

"Whether saving for a child’s tuition, a first home, or retirement, Americans deserve investment opportunities that fit their unique circumstances and provide steady, long-term returns.

"We’re not here today to pick winners and losers. Our goal is to understand what these trends mean for retail investors and retirement savers. 

"Today, people can choose from a wide variety of investment products tailored to match their specific time horizons, risk tolerances, and financial goals.

"Americans can now pick from hundreds of types of index funds, ETFs, and mutual funds covering nearly every sector of the economy.

"Much of this investor choice can be attributed to actions taken by the SEC under the first Trump administration. The Commission’s 2019 ETF Rule modernized how these products come to market, speeding up timelines and eliminating red tape.

"After the rule’s enactment, the total number of ETFs grew significantly, with a 66 percent increase between 2020 and 2024. This demonstrates how sound regulation can promote innovation and competition.

"However, as passive investing continues to grow, we must understand how different investment strategies affect market dynamics.

"Healthy markets depend on effective price discovery—the process where investors evaluate information, assess risk, and determine the value of companies. Active investors play an important role in that process by researching companies, analyzing fundamentals, and incorporating new information into market prices.

"At the same time, passive investment products have delivered substantial benefits to investors by providing low-cost diversification and broad market exposure.

"Understanding how active and passive strategies interact is essential to ensuring our markets remain efficient, competitive, and resilient while continuing to deliver strong outcomes for investors.

"This conversation would not be complete without talking about the importance of capital formation. The role of active and passive funds ties directly into access to capital and public offerings.

"An initial public offering is, at its core, a price discovery event. While index inclusion remains a vital milestone for mature companies, our public markets are most vibrant when they also include smaller, high-growth companies.

"To keep America’s capital markets the envy of the world, we must ensure capital formation is supported across the full lifecycle of a public company, not merely when it has reached the size and scale necessary to attract significant index-based investment.

"To conclude, this hearing is first and foremost about improving the outcomes of individual investors.

"Understanding how and where Americans invest is crucial to crafting policies that support them.

"Today’s witnesses bring a wealth of experience in investments, markets, and fund management. Thank you all for your time and your expertise, and I look forward to our discussion."