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Gary Gensler, President Joe Biden's election to lead the Securities and Exchange Commission, said he hoped to oversee cryptocurrency regulation, stock trading "gamification" and board diversity if confirmed he was Wall Street's primary regulator directs.
Gensler, who testified before the Senate Banking Committee on Tuesday, was asked if he would check the payment for order flow and playful tactics used by some online brokers to attract customers to their platforms.
Both of these topics have caught attention in the past two months following the wild trading of GameStop, AMC Entertainment, and other stocks on Capitol Hill in January.
Senators including Massachusetts Democrat Elizabeth Warren asked Gensler for his thoughts on Robinhood Markets, one of the most popular online trading apps, in the virtual hearing.
Robinhood's critics say the company is trying to lure young or inexperienced customers into trading with features on its trading platform that mimic gaming apps like virtual confetti when they execute a trade.
The SEC candidate promised to analyze the rise in the "gamification" of stock trading and to intervene if necessary.
He also pointed to potential problems with the current order flow payment structure, a common Wall Street practice where trading companies like Citadel Securities pay companies like Robinhood to send them their clients' orders for execution.
We're going to "examine the structure of the stock markets in terms of paying the flow of orders when, frankly, only a few – a handful – financial firms are buying most of the retail flow in America," Gensler said Tuesday.
The former partner of Goldman Sachs and former head of the Commodity Futures Trading Commission also asked questions about cryptocurrency, blockchain and bitcoin. As a professor at MIT's Sloan School of Management, Gensler teaches digital currencies and blockchain.
When asked how the SEC should oversee such emerging technologies, he replied that responsibility could rest with the government depending on how assets such as bitcoin are classified.
"To the extent that someone offers an investment contract or security that falls within the purview of the SEC and operates exchanges there, we need to ensure that investors are protected," he said.
"If it isn't, and it's a commodity like Bitcoin was believed to be, then it's either a question for Congress … or possibly a question for the Commodity Futures Trading Commission," he added.
Other lawmakers, like committee chairman Senator Sherrod Brown, D-Ohio, asked Biden to lead the SEC on how he believes the regulator should prioritize climate change.
"Increasingly, investors really want to see tens of trillion dollars in assets behind them," said Gensler of climate-friendly investments. "They want to see information on climate risk. I think issuers would benefit from such guidelines."
Senior Member Sen. Pat Toomey, R-Pa., Asked for Gensler's thoughts on Nasdaq's drive to increase diversity on corporate boards.
He and other Republicans have opposed a recent plan tabled by the SEC's stock exchange operator to require thousands of publicly traded companies to include women, ethnic minorities and LGBT people on their boards of directors.
Toomey asked Gensler if he thought boards "should be forced or pressured to adhere to a certain race, gender, or sexual orientation quota".
Gensler responded by promoting the benefits of diversity more generally and within the ranks of the SEC.
"I think that diversity on the board of directors and diversity in the executive level … benefits decision-making, and that is something I am committed to with the SEC and its leadership," he said. "It is a positive step forward in SEC leadership that I will take if confirmed."