Photographer: Tiffany Hagler-Geard / Bloomberg
Photographer: Tiffany Hagler-Geard / Bloomberg
Online trading apps with game-like features are getting more scrutiny from the leading U.S. brokerage watchdog, adding regulatory headlines for Robinhood Markets and other companies that played key roles in frenzied buying on the market. last month Corp GameStop
The The Financial Industry Regulatory Authority outlined the positive focus on apps in its annual testing priorities, saying it would closely monitor and monitor potential breaches of potential risks. the buyers ’use of online trading tools, which have been adopted by investors’ sales armies during the coronavirus outbreak.
“This focus includes risks associated with app-based platforms with interactive or‘ game-like ’features aimed at influencing customers, the types of marketing co and the appropriateness of the activity they allow clients to undertake, ”Finra, which is funded by the bankruptcy industry, said in February 1 report.
The heightened attention comes as Robinhood’s popular trading platform draws strong criticism from consumer advocates and some lawyers about GameStop’s incredible rise and fall. Hackers argue that the nudges improperly inserted into apps encourage customers to keep trading and could cross the line of scrutiny. provide stock recommendations, which would give companies stricter rules.
Robinhood denies any suggestions. If Robinhood had offered advice, it would have stimulated a series of duties, including that the company would work for the good of its customers.
Robinood did not immediately respond to a request for comment.
The The Securities and Exchange Commission is also examining how breaches handled larger trading volumes during the January turmoil and company decisions to ban the purchase of GameStop and other stocks. The regulator checks whether breaches complied with regulations and were consistent in how they made disclosures to their clients.
Robinhood has reiterated that it was limiting some customer orders last week and seeking billions in dollars from its investors because the Investment & Clearing Corp. Trust. capital requirements significantly. The DTCC is responsible for overseeing the plumbing of stock trading.
Although Finra did not name any specific companies in its report, it did set out a number of considerations on whether breaks with interactive and “game-like” features should be considered, including:
- If communication with messengers comes to a “recommendation” and, if so, do companies work for the “good of the customer. ”
- Whether disclosure of risks, fees and charges is appropriate.
- Whether companies need to develop or create systems to monitor “game-like” communication with customers.
- Whether companies are doing enough to prevent false, misleading or exaggerated statements.
- Whether companies are appropriately monitoring customer options trading and opening new accounts.