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Cracking Down on the Controversial Buck

It might sound borderline irrational, but our ability to make something greater than ourselves is not only our strength, but it’s also our greatest weakness. When a human trudges the path of invention, he can easily go past the point of his own understanding. This is not essentially realized because of how fragmented these procedures can be, hence when all the steps come together to initiate a cumulative effect, the result often falls a cut above our shoulders. Now, it can be argued that this is pretty much how you can facilitate your own growth, but in some cases, our lack of complete understanding of something can easily turn the potential benefits into a bag full of complications. A perfect example of this would be the regulation & compliance industry. The idea of establishing certain regulatory measures was brought in to ensure fair practice and parity throughout the sectors, but this simple idea has grown more and more complex over time. It goes without saying that the said complexity has resulted in bogged down business operations, and even non-compliance. Nevertheless, once technology turned up around the corner, it became relatively easy, at least at the start. Companies and regulatory bodies have been able to correspond to each other’s needs in a more productive way, but this supposed breakthrough is now causing challenges of its own.

The controversial rise of online stock trading apps has finally become big enough to catch the attention of an authority like SEC. With growing cases of financial mismanagement on these platforms, the commission is getting ready to closely scrutinize their operations. To begin their process of properly regulating these platforms, the Securities and Exchange Commission of U.S. is planning to get the public view over these platforms using the gamification element to reel the user in. Apart from gamification, SEC wants to learn more about other digital engagement practices too that can include differential marketing and behavioral prompts. All these practices play a huge role in deciding the kind of experience a user can generate on these platforms, an experience which many claim can be misleading until it’s not.

“While new technologies can bring us greater access and product choice, they also raise questions as to whether we as investors are appropriately protected when we trade and get financial advice,” said the chief of SEC, Gary Gensler.

Currently, these online stock trading apps are understood to operate in a grey area of the market, so SEC would be aiming to discern the nature of financial advice provided on these platforms and bring it line with the industry standards. By doing so, commission hopes that it will be able to reduce cases like the one of Robinhood.

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