Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exchange leaders say GameStop saga highlights regulatory challenges

Stock MarketsMar 16, 2021 04:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A GameStop store is pictured in New York

By John McCrank

NEW YORK (Reuters) - The recent trading frenzy around GameStop Corp (NYSE:GME) and other so-called "meme" stocks highlights shortcomings and challenges in the U.S. markets as retail investors become a bigger presence, exchange leaders said on Tuesday.

"The regulatory structure of the U.S. equity markets, in my mind, is flawed," Jeff Sprecher, chief executive of New York Stock Exchange owner Intercontinental Exchange (NYSE:ICE) Inc, said on a panel at the Future Industry Association's virtual FIA Boca conference.

Regulators have focused on competition between market intermediaries, like brokers and exchanges, rather than between buyers and sellers seeking to get the best prices, and the GameStop event exposed issues with that structure, he said.

In January, retail investors coordinated through social media forums in an attempt to punish hedge funds by buying shares of GameStop and other heavily shorted names, driving up their prices and forcing short sellers to close out positions at big losses.

At the height of the trading mania, several retail brokers restricted the buying of GameStop after collateral requirements needed to clear the trades spiked, angering many traders.

The saga has sparked congressional hearings, regulatory probes and put short selling under scrutiny.

"I'm hoping that in the future regulators will roll back some of the punitive rules and allow the market itself to deal with the intermediary structure," Sprecher said.

The challenge now is to determine what constitutes unacceptable trading behavior as retail traders coordinate online, said Singapore Exchange (OTC:SPXCY) CEO Loh Boon Chye.

Market manipulation, when it comes to retail investors' online activity, has not been defined, which is "concerning," said CME Group (NASDAQ:CME) CEO Terry Duffy.

He pointed to the legalization of gambling and marijuana in most U.S. states as examples of regulators taking a more hands-off approach.

"People want to be in charge of their own destiny," he said.

Exchange leaders say GameStop saga highlights regulatory challenges
 

Related Articles

Canada's Shopify records Black Friday sales up 21%
Canada's Shopify records Black Friday sales up 21% By Reuters - Nov 27, 2021

(Reuters) - Canadian e-commerce company Shopify (NYSE:SHOP) Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Chris Fon
Chris Fon Mar 17, 2021 10:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When millions of individuals want to buy a stock and the price soars, that is not market manipulation but just free market. period. When a small group of conniving financial firms do it at expense of the average citizen, that is market manipulation
Nicolas Houin
Nicolas Houin Mar 17, 2021 4:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what about the big sell last Wednesday .1 billions value from 6 sellers at the same time and very low under the price market???is not a coordinate sell from by money funds???
Joe McKela
Joe McKela Mar 16, 2021 5:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lol, The problem is not some retail investors "coordination" but rather illegal naked shorting and the miniscule sanctions for large entities that are knowingly and intentionally braking the rules, since the fines that follow are tiny next to the profits.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email