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WASHINGTON – U.S. Senator Kevin Cramer (R-ND) highlighted the importance of letting individuals have direct market access and control over their own assets during a Senate Banking Committee hearing today on recent stock market volatility caused by incidents involving companies GameStop and Robinhood.
“This whole hearing is fundamentally about the level of access that retail investors should have to own shares of companies. Some of you are positioning that the system is rigged,” said Senator Cramer. “Do you believe retail investors in the marketplace benefit from direct retail investor access to the market?”
The question was directed at Mike Piwowar, former Securities and Exchange Commission (SEC) Acting Chairman turned Executive Director of the Milken Center for Financial Markets; and Andrew Vollmer, retired securities lawyer and former SEC General Counsel who is now a senior scholar at the Mercatus Center. Both agreed with Senator Cramer and discussed finding the proper balance for market access.
“I think retail investors benefit hugely from direct access to direct ownership of the equities of operating companies,” Mr. Vollmer replied. “Yes, they ought to have direct access, but they ought to be smart about it and recognize their limitations.”
“I agree with what Mr. Vollmer just talked about,” said Mr. Piwowar. “I would add that it’s important for investors to have the chance to do both. They have access to indirect investments through low-cost professionally-managed funds, and investors have the opportunity to invest some of their money on their own. … I think it provides the opportunity to learn over time about the financial system.”
