File photo: The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst
Gensler said in prepared testimony that new trading rules being considered include: greater disclosure of "short-selling," a strategy that hedge funds and other big investors use to bet a stock will fall; increasing transparency around securities lending, which underpins short-selling; and new reporting rules for the "total return" equity swaps that felled Archegos.
Gensler also said he has asked SEC staff to draft a request for public input into how trading apps entice retail customers using game-like features such as points, rewards and competitions - a tactic known as "gamification." He added that he has directed staff to draft a proposal on expediting the two-day trade settlement process to reduce system risks.
Shares of GameStop soared in January after retail investors congregating on Reddit and trading on low-cost brokerage platforms bought shares in the video game retailer, causing big losses for hedge funds that had shorted the stock.
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