10/18, 11:17 PM (Source: TeleTrader)
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SEC warns about 'game-like' features in trading

The United States Securities and Exchange Commission (SEC) released on Monday a report on "meme stock" trading, focusing on events surrounding the GameStop Corp. shares earlier this year. The SEC warned of the possibility that "game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise." In addition, it stated that "payment for order flow and the incentives it creates may cause broker-dealers to find novel ways to increase customer trading, including through the use of digital engagement practices."

The SEC also highlighted trading restrictions in individual stocks, as well as GME stock trading off-exchange and through wholesalers, reducing transparency. The SEC called for improved reporting of short sales, which would "allow regulators to better track the interplay between shorting and price dynamics."

Breaking the News / DJ