Retail transaction update
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US stock market regulators have asked the public to weigh the “gamification” of stock trading in response to concerns that some online applications will prompt investors to take risks that they do not fully understand.
The U.S. Securities and Exchange Commission issued a solicit opinions Online platforms such as Robinhood are used to maintain digital practices for customer transactions.
Gary Gensler Securities and Exchange Commission The chairman suggested that some of these practices can themselves be counted as stock market recommendations, thereby imposing stricter supervision on the trading platform.
“In the past few years, we have seen new brokerage applications and wealth management applications that provide us with investment advice and robotic advisory services,” he said in a video posted on his website. Twitter feed.
“Although these new technologies can bring us more opportunities and product choices, they also raise the question of whether we as investors are properly protected when trading and obtaining financial advice.”
In another statement, his agency asked the public to comment on the extent to which digital tips that encourage people to trade are considered recommendations or investment advice.
“In many cases, these features may encourage investors to trade more frequently, invest in different products or change their investment strategies,” Gensler said, warning of potential conflicts of interest between platform targets and investors.
The request for comment may be the first step towards tighter control over digital trading platforms, which have been censored due to frantic transactions by certain companies such as game retailer GameStop.
As traders using the online chat room Reddit encouraged each other to buy, the company’s stock price soared by more than 1,000% this year, which caused some hedge funds that sold short or were betting down to suffer severe losses.
But the dramatic volatility in the share prices of GameStop and other companies has raised concerns about whether certain online platforms encourage people to trade without adequately explaining the risks.
Robin Hood has repeatedly being attacked Gamification and user experience from regulators, including emojis and images sprinkled with confetti when investors execute transactions.
The company said it looks forward to communicating with the US Securities and Exchange Commission on the broker’s digital participation practices.
“Robinhood makes it possible for millions of Americans of different backgrounds and socioeconomic classes to invest for the first time and have the opportunity to accumulate wealth over the long term through a simple, easy-to-use and popular platform,” it said.
Gensler said he is interested in practice, such as different marketing to different users based on their personal data, and encouraging people to continue trading through certain prompts and notifications.
He has previously stated that he wants to review the so-called order flow payment, that is, the company can pay the trading platform for the right to complete the transaction. In recent years, this approach has proven profitable for online platforms.
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