Gary Gensler hopes to oversee cryptocurrency regulation, the “gamification” of equity trading and board diversity if confirmed to lead Wall Street’s chief regulator.
On Tuesday Gensler testified before the Senate Banking Committee. Senators including Massachusetts Democrat Elizabeth Warren asked Gensler for his thoughts on Robinhood Markets. The critics of Robinhood say that it attracts young or inexperienced trader with features mirror gaming apps, such as virtual confetti when they execute a trade. Gensler promised to analyze the rise of “gamification” of stock trading and intervene if necessary.
We will “look at market structure in the equity markets around payment for order flow. Order flow is a common practice on Wall Street whereby trading firms, like Citadel Securities, pay companies like Robinhood to send them their customers’ orders for execution.
Gensler noted that "frankly just a couple – a handful – of financial firms are buying most of the retail flow in America.”
Gensler also fielded questions about cryptocurrency, blockchain and bitcoin. Gensler is a professor at MIT’s Sloan School of Management and teaches on digital currencies and blockchain.
“To the extent that somebody is offering an investment contract or security that’s under the SEC’s remit, and they have exchanges that operate there, then we have to make sure there’s investor protection,” he said.
“If it’s not that, and it’s a commodity, as bitcoin has been deemed to be, then it’s either a question for Congress ... or it’s possibly a question for the Commodity Futures Trading Commission.,” he added.
Other lawmakers, such as , asked about how he thinks the regulator should prioritize climate change.
He responded to question from Committee Chairman Sen. Sherrod Brown, D-Ohio about climate change saying “Increasingly, investors really want to see tens of trillions of dollars of assets behind it,” Gensler said. “They want to see climate-risk disclosures. I think issuers would benefit from such guidance.”
Ranking member Sen. Pat Toomey, R-Pa., asked Gensler if he thinks boards should be “forced or pressured to comply with some sort of quota with respect to race, gender or sexual orientation.”
“I think diversity in boards and diversity in senior leadership ... benefits decision-making and it’s something that I’m committed to at the SEC and the leadership there,” he said. “It’s a positive step forward in the leadership of the SEC that, if confirmed, I’m going to take on.”