FinReg + Policy Watch
November 5, 2021

SEC’s Gensler Shines Additional Light on Agency’s Focus


The SEC has been increasingly focused on digital engagement practices (DEPs) and gamification in the marketplace.  In August, for example, the SEC solicited public comment on broker-dealer and investment adviser DEPs and potential regulatory approaches in this area.  In October, SEC staff produced a report on “meme” stock events and related market structure considerations, which focused partially on increased retail participation in the markets and firms’ use of DEPs.

SEC Chairman Gensler’s recent remarks at the SIFMA Annual Meeting shined some additional light on what the industry might see in 2022 in the way of guidance or proposed rulemaking in this area.  In particular, Gensler noted that there may be two potential DEP-focused rulemakings—one for investment advisers and a second for broker-dealers.  Both will likely focus on conflicts of interest and, for broker-dealers, payment for order flow and exchange rebates.  The agency will also likely take a closer look at “dark patterns”—what it considers to be user interface design choices that are knowingly designed to confuse users, make it difficult for users to express their actual preferences, or manipulate users into taking certain actions.

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