Citing the events of the GameStop run-up, SEC Commissioner Hester M. Peirce emphasized both (i) the constancy of the regulatory mission of the agency, particularly as technology continues to offer innovative solutions, and (ii) the need for regulators to adapt their rules, and even their attitudes, so that investors and society generally can benefit from improvements to technology.
In a speech at the George Washington University Law School's Regulating the Digital Economy Conference, Ms. Peirce stated that the reaction to GameStop should not be to take actions that serve only to protect the positions of incumbents in the financial markets, which are well adapted to existing rules and to established technologies. Rather, regulators should be "more proactive in embracing technology. . . ."
Commissioner Peirce stated: "we should welcome the new technology's potential to improve the way markets work and to make them work for more people. The payoff is high: a successful regulatory framework for the digital economy will unleash its ability to empower individuals to build better futures for themselves, their families, and their communities."
Commentary Steven Lofchie
Commissioner Peirce draws from the events of GameStop an important message: the manner in which retail investors interact with the markets and with their brokers, the sources from which they obtain information, and the means by which they trade have all changed. If the SEC's investigation of the GameStop events reveals significant misconduct, that should be punished. But it would be a disappointing outcome if the inclination to bring enforcement actions or to adopt prohibitive rules distracted the regulators from a more important goal: making information and education more accessible to retail investors, making markets work better for retail investors. (See GameStop: Regulators Should Focus Less on "Solving the Problem"; More on "Improving the Situation".)
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