[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4685 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 4685
To require the Government Accountability Office to carry out a study on
the impact of the gamification, psychological nudges, and other design
techniques used by online trading platforms, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 26, 2021
Mr. Casten (for himself and Mr. Foster) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To require the Government Accountability Office to carry out a study on
the impact of the gamification, psychological nudges, and other design
techniques used by online trading platforms, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. GAO STUDY ON THE GAMIFICATION OF INVESTING.
(a) Study.--The Comptroller General of the United States shall
carry out a study on the impact of the gamification, psychological
nudges, and other design techniques of online trading platforms,
including the following:
(1) How, and to what extent gamification, psychological
nudges, and other design techniques are being used by online
platforms in ways that are detrimental to investors.
(2) How, and to what extent gamification, psychological
nudges, and other design techniques are being used by online
platforms in ways that empower, inform, and educate investors.
(3) The various ways brokers use gamification,
psychological nudges, and other design techniques in marketing
strategies that target or include retail customers.
(4) The various ways investment advisers, ``robo-
advisers'', or financial planners use gamification,
psychological nudges, and other design techniques in marketing
strategies that target or include retail customers.
(5) The various ways in which brokers, investment adviser,
``robo-advisers'', or financial planners incorporate ``game-
like'' features and designs in their online trading
applications used by retail customers.
(6) Whether certain platform use of gamification,
psychological nudges, and other design techniques, including
``game-like'' features, may constitute investment advice or
recommendations under Federal securities laws and regulations,
including Regulation Best Interest (17 C.F.R. 240.15l-1).
(7) A comparison between the investment activity, habits,
and risk tolerance of--
(A) retail customers of firms that use
gamification, psychological nudges, and other design
techniques in marketing, or that incorporate ``game-
like'' features and designs in their online trading
applications; and
(B) retail customers of firms that do not use, or
have limited use of, gamification, psychological
nudges, and other design techniques in marketing and
that do not incorporate ``game-like'' features and
designs in their online trading applications.
(8) How, and how prominently, brokers, investment advisers,
``robo-advisers'', or financial planners that use gamification,
psychological nudges, and other design techniques in marketing
strategies that target or include retail investors, or that
incorporate ``game-like'' features and designs in their online
trading applications, are disclosing the risks associated with
leverage, complex products, or excessive or frequent trading.
(9) The average customer demographic (including age and
investment experience) of brokers, investment advisers, ``robo-
advisers'', or financial planners that use gamification,
psychological nudges, and other design techniques in marketing
strategies that target or include retail investors, or that
incorporate ``game-like'' features and designs in their online
trading applications.
(10) The relationship between (and any correlation between)
zero commission trading and gamification or investor
susceptibility to ``game-like'' features.
(11) The degree to which the types of retail trading
activity that is incentivized by gamification (including the
specific asset classes promoted via gamification) benefits,
harms, or otherwise affects other market participants, and an
analysis thereof.
(12) The degree to which Securities and Exchange
Commission's Form BD and Form ADV can be revised to help the
Commission better identify which registered firms use
gamification, psychological nudges, and other design
techniques.
(13) Any data or legal challenges (e.g., so-called
proprietary practices) that the Comptroller General encounters
in preparing the report.
(b) Investor Testing Authority.--The Investor Advocate of the
Securities and Exchange Commission is authorized to carry out investor
testing as part of the study required under subsection (a).
(c) GAO Report.--Not later than the end of the 270-day period
beginning on the date of enactment of this Act, the Comptroller General
shall issue a report to the Securities and Exchange Commission and the
Congress containing all findings and determinations made in carrying
out the study required under subsection (a).
(d) Required Consultation.--In carrying out the study required
under subsection (a), the Comptroller General shall actively consult
with--
(1) the Securities and Exchange Commission;
(2) the Investor Advocate of the Commission;
(3) the Office of Investor Education and Advocacy of the
Commission;
(4) the North American Securities Administrators
Association;
(5) the Financial Industry Regulatory Authority;
(6) academics; and
(7) investor advocacy organizations and experts.
(e) Gamification Defined.--In this section, the term
``gamification'' means tactics or strategies used to engage customers
and incentivize or nudge them to transact and spend time on an
investment platform, including increased use of notifications, prizes,
use of ladders and leader boards, psychological tools, and design
elements to incentivize customers to spend more time on an investment
platform, to increase rapid trading, and to increase the number of
trades.
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