Gary Gensler, President Joe Biden’s election to lead the Securities and Exchange Commission, said he hoped to oversee cryptocurrency regulation, share “gamification” of stock trading and the diversity of boards if he was confirmed to lead the main Wall Street regulator.
Gensler, who testified before the Senate Banking Committee on Tuesday, was interested in examining payment for the order flow and gambling tactics used by some online brokerages to attract customers to their platforms.
Both subjects received attention on Capitol Hill in the last two months after the January wild trading in GameStop, AMC Entertainment and other stocks.
Senators, including Massachusetts Democrat Elizabeth Warren, asked Gensler in the virtual session his thoughts on Robinhood Markets, which operates one of the most popular online trading applications.
Critics of Robinhood say the company is trying to attract young or inexperienced customers to trade with features on its trading platform that mimic gaming applications, such as virtual confetti when executing a transaction.
The SEC candidate promised to consider increasing the “gamification” of stock trading and to intervene, if necessary.
He also noted potential problems with the current payment structure for the order flow, a common practice on Wall Street whereby commercial firms such as Citadel Securities pay companies such as Robinhood to send orders to their enforcement customers.
We will “look at the market structure of the stock markets around payment for order flow when, frankly, only a couple – a handful – of financial firms buy most of America’s retail flow,” he said. said Gensler on Tuesday.
Former Goldman Sachs partner and former head of the future commodity trading commission asked questions about cryptocurrency, blockchain and bitcoin. As a professor at MIT’s Sloan School of Management, Gensler teaches digital currency and blockchain.
Asked how the SEC should monitor such emerging technologies, he replied that the responsibility could lie with the government depending on how assets such as bitcoin are classified.
“To the extent that someone offers an investment contract or a guarantee that falls under the SEC and has exchanges that operate there, then we need to make sure that there is protection for investors,” he said.
“If that’s not the case and it’s a commodity, as bitcoin was considered, then it’s either a question for Congress … or it’s a question for the Commodity Futures Trading Commission,” he added.
Other lawmakers, such as committee chairman Sen. Sherrod Brown of D-Ohio, have called for Biden’s choice to lead the SEC on how he believes the regulator should prioritize climate change.
“Increasingly, investors really want to see tens of billions of dollars of assets behind it,” Gensler said of green investments. “They want to see the revelations on climate risk. I think issuers would benefit from such guidance. “
Senator Pat Toomey, a member of the rank, asked Gensler’s thoughts on the Nasdaq’s pressure to increase diversity on boards.
He and other Republicans have denounced a recent plan submitted by the exchange operator to the SEC, which would require thousands of listed companies to include women, racial minorities and LGBT people on their boards.
Toomey asked Gensler if he believed the panels should be “forced or pressured to respect some kind of quota in terms of race, sex or sexual orientation.”
Gensler responded by promoting the benefits of diversity more widely and among the ranks of the SEC.
“I think diversity on boards and diversity in senior management … benefits from decision-making and is something that I commit to the SEC and the leadership there,” he said. “It’s a positive step forward in leading the SEC that, if confirmed, I will.”