GameStop’s commercial obsession has prompted US regulators to consider new rules for everything from short-selling to options-gamification, indicating that regulators are just beginning to respond to the market turmoil.
D-Mass. In a letter to Senator Elizabeth Warren, Alison Heren Lee, the current chair of the Securities and Exchange Commission, outlined a number of changes to the rules that the regulator must “take seriously.” These include tightening requirements for brokers offering options trading, new requirements for brokers selling their clients’ stock orders to other firms, tightening disclosure standards for hedge funds, and other stocks trading against stocks.
At the same time, the regulator of the financial industry, which controls the brokers, said that it is reviewing whether its rules properly address the potential risks posed by the commercial applications of smartphones, which may encourage investors to continue trading with technology tips. Warren on Tuesday released the answers of Lee և FINRA CEO Robert Cook.
The astronomical growth of GameStop և other shares, which contribute to the growing messages on social networks, has captured the attention of Capitol Hill. The Senate Banking Committee held a hearing Tuesday with academics and market experts at a previous session of the House Financial Services Committee that featured some of the drama’s key players, including Robinhood Markets CEO Vlad Tenn, founder of Citadel Ken Grief. :
The GameStop Rally is reviving to $ 249.85 during Tuesday’s video game retail trading. The stock market has grown by about 80% this week.
Warren asked SEC և FINRA executives about their plans to respond to GameStop, including possible investigations by regulators. Some notable moments of their answers include:
- The SEC examines stock prices that deviate from their basic principles. GameStop underscored that concern as it grew, despite expectations of not making a profit for years.
- Lee says the agency is checking for holes in the SEC’s market manipulation rules.
- Both the SEC and FINRA said their agencies were investigating any crimes, but declined to give specifics.
- Finra noted that gamification could “increase the risks to customers if it is not addressed with the appropriate considerations, raising potential regulatory issues.”
- Finra said that Robin Hood has some features that “can be seen as game features”.
- Finra added that the question is whether the nudes and tips used by the apps are equivalent to stock offers, which impose stricter rules on brokers that require them to act in the best interests of their clients. The regulator also asked if the rules should be revised to make it clear that components like the app make recommendations for investors to buy certain stocks.
- None of the regulators provided a timetable for the changes.