Gary Gensler, chairman of President Joe Biden to chair the Securities and Exchange Commission, said he hoped to oversee cryptocurrency regulation, the “gamification” of equity trading and diversity of advice if confirmed to lead the top regulator. of Wall Street.
Gensler, who testified before the Senate Banking Committee on Tuesday, found out if he would consider paying for the flow of orders and gambling tactics used by some online brokers to help attract customers to their platforms.
Both subjects have received attention on Capitol Hill for the past two months after the wild January trading on GameStop, AMC Entertainment and other stocks.
Senators, including Massachusetts Democrat Elizabeth Warren, asked Gensler in the virtual audience his thoughts on Robinhood Markets, which operates one of the most popular online trading apps.
Critics of Robinhood say the company is trying to attract young or inexperienced customers to trade features of its trading platform that mimic gaming applications, such as virtual confetti when performing an operation.
The SEC candidate pledged to analyze the increase in the “gamification” of stock trading and intervene if necessary.
He also pointed to possible problems with the current order flow payment structure, a common practice on Wall Street whereby commercial companies, such as Citadel Securities, pay companies like Robinhood to send them execution orders from their customers.
“We’ll see the market structure in equity markets around paying for order flow when frankly only a couple (a handful) of financial firms buy most of the retail flow in the United States,” Gensler said Tuesday .
The former Goldman Sachs partner and former head of the Commodity Futures Trading Commission also raised questions about cryptocurrency, blockchain and bitcoin. As a professor at MIT’s Sloan School of Management, Gensler teaches classes on digital currencies and blockchain.
Asked how the SEC should monitor these emerging technologies, he replied that the responsibility could fall on the entire government depending on the classification of assets such as bitcoin.
“To the extent that someone offers an investment contract or a guarantee under the jurisdiction of the SEC and they have stock exchanges that operate there, we need to make sure that there is protection for investors,” he said.
“If it’s not that, and it’s a commodity, as Bitcoin has been considered, it’s a question for Congress … or it’s possibly a question for the Commodity Futures Trading Commission,” he added.
Other lawmakers, such as committee chairman Sen. Sherrod Brown, D-Ohio, asked Biden to decide 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 them,” Gensler said of climate-friendly investments. “They want to see the disclosures about climate risk. I think issuers would benefit from this guidance.”
Ranking Sen. Pat Toomey, R-Pa., Asked Gensler’s views on the Nasdaq push to increase diversity on business boards.
He and other Republicans have denied a recent plan presented by the exchange operator to the SEC that would require thousands of companies listed on its stock exchange to include women, racial minorities and LGBT people on its boards.
Toomey asked Gensler if he believes “advice should be forced or pressured to meet some sort of quota with respect to race, gender, or sexual orientation.”
Gensler responded by presenting the benefits of diversity more broadly and among the ranks of the SEC.
“I think diversity on boards of directors and diversity on senior executives … benefits decision-making and it’s something I’m committed to with the SEC and leadership,” he said. “It’s a positive step forward in the leadership of the SEC that, if confirmed, I will take on.”