The United States SEC is “very concerned” about the gamification of stock trading for investors

The chief enforcement attorney for the US Securities and Exchange Commission says Wall Street’s main regulator is very concerned about digital engagement practices that brokerage firms may be using to encourage the buying and selling of stocks.

Though SEC Enforcement Director Gurbir Grewal has declined to discuss any investigations, his comments during a House Subcommittee hearing on Tuesday are the regulator’s latest signal that a crackdown is coming on practices critics have dubbed gamification of investing.

Last month, the SEC announced that it plans to propose new rules this year.

“Gamification is a big problem,” Mr. Grewal told lawmakers on the House Financial Services Committee’s Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.

“I worry when gamification crosses the line into recommendation.”

He added that the SEC could take action if companies that use digital nudges for customers fail to comply with rules that require them to act in the best interests of customers when making financial recommendations.

The SEC said last August it was concerned that game-like features put investors at risk by encouraging excessive trading.

Under SEC regulations, when a firm offers investment advice or recommends securities, it may be subject to standards of conduct that require putting clients’ interests first. The United States SEC is “very concerned” about the gamification of stock trading for investors

Fry Electronics Team

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