Gary Gensler, President Joe Biden’s choice to head the Securities and Exchange Commission, said he hopes to oversee the regulation of cryptocurrencies, the “gamification” of stock trading and the diversity of the board if confirmed to lead the chief regulator of Wall Street. .
Gensler, who testified before the Senate Banking Committee on Tuesday, was asked whether he would examine the payment for the order flow and gambling tactics used by some online brokers to help attract customers to their platforms.
Both subjects have received attention on Capitol Hill in the past two months, after wild negotiations in January with GameStop, AMC Entertainment and other actions.
Senators, including Massachusetts Democrat Elizabeth Warren, asked Gensler in the online audience for his views on Robinhood Markets, which operates one of the most popular online trading apps.
Critics of Robinhood say the company tries 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 trade.
The SEC nominee has promised to analyze the increase in 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 for which trading firms, such as Citadel Securities, pay companies like Robinhood to send their clients’ orders to them. execution.
Let’s “look at the stock market structure around the order payment flow when, frankly, only a couple – a handful – of financial companies are buying most of the retail flow in America,” said Gensler on Tuesday. market.
The former Goldman Sachs partner and former head of the Commodity Futures Trading Commission also answered questions about cryptocurrency, blockchain and bitcoin. As a professor at MIT’s Sloan School of Management, Gensler teaches digital currencies and blockchain.
Asked how the SEC should oversee these emerging technologies, he replied that the responsibility could lie with the government, depending on how assets like bitcoin are classified.
“As long as someone is offering an investment contract or bond that is under the responsibility of the SEC, and they have exchanges that operate there, then we have to ensure that there is investor protection,” he said.
“If it is not that, and it is a commodity, as bitcoin has been considered, then it is either an issue for Congress … or it is possibly an issue for the Commodity Futures Trading Commission.”, He added.
Other lawmakers, such as committee chairman Senator Sherrod Brown, D-Ohio, called for Biden to be chosen to lead the SEC over how he thinks the regulator should prioritize climate change.
“Increasingly, investors really want to see tens of trillions of dollars in assets behind this,” said Gensler of climate-friendly investments. “They want to see climate risk disclosures. I think emitters would benefit from this guidance.”
Ranking member Senator Pat Toomey, R-Pa., Asked about Gensler’s views on Nasdaq’s effort to increase diversity on corporate boards.
He and other Republicans condemned a recent plan submitted by the exchange operator to the SEC, which would require the thousands of companies listed on its stock exchange to include women, racial minorities and LGBT individuals on their boards.
Toomey asked Gensler if he thinks the councils should be “forced or pressured to meet some kind of quota with respect to race, gender or sexual orientation”.
Gensler responded by spreading the benefits of diversity more widely and across the SEC ranks.
“I think the diversity on the boards and the diversity in the senior leadership … it benefits decision making and it is something I am committed to at the SEC and the leadership there,” he said. “It is a positive step forward in the leadership of the SEC that, if confirmed, I will take over.”