The report examined gamification, or what Mr. Gensler calls “digital engagement” — how apps can manipulate trading behavior through design features. (Last year, for example, one such app, Robinhood, discontinued animated confetti, a feature that helped gamify investing.) Although the report did not propose new rules, it did suggest that they might be needed in the gamification-of-trading era. The agency put out a request for public comment and is considering next steps.
Mr. Gensler has also asked the S.E.C. staff to study market structure.
Improvements are imperative if the United States hopes to maintain global leadership, he said. “I think about how we at the agency update our rules ensuring that we remain the most efficient capital market in light of the technologies that are rapidly changing, and I think it’s also a geopolitical piece to it, too,” he said.
The agency is also thinking about tinkering with market plumbing, shortening the time it takes to settle a trade to one day from two and seeking more disclosure around short selling.
“Actually, Congress mandated that we have more disclosure around short selling 12 years ago in Dodd-Frank, and my predecessors had busy schedules and didn’t get to it,” Mr. Gensler said. “So we’re doing that.”
Sweeping changes to climate reporting
Companies have long reported climate-related information demanded by investors, though no mandatory standards existed. Without the standardization, Mr. Gensler said, investors have a hard time making meaningful comparisons and assessing progress.
New rules proposed last month could address that gap, he said.
In March, the S.E.C. gave initial approval to corporate disclosure rules on climate risks. Mr. Gensler points out that they are based on the input of investors, issuers and some academic experts, not government bureaucrats.
“Many companies are saying, ‘We plan to have less greenhouse gas emissions in the future by 2040 or 2050,’ or something,” Mr. Gensler said. “And, yes, today companies are making disclosures and investors are making decisions based on those disclosures, so we have the same role we’ve had for 90 years to help bring some efficiency to all of this. In this case, some consistency and comparability.”