[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4685 Reported in House (RH)]
<DOC>
Union Calendar No. 165
117th CONGRESS
2d Session
H. R. 4685
[Report No. 117-231]
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
January 20, 2022
Additional sponsors: Mrs. Axne and Ms. Underwood
January 20, 2022
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on July
26, 2021]
_______________________________________________________________________
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,
SEC. 1. SHORT TITLE.
This Act may be cited as the ``Trading Isn't a Game Act''.
SECTION 2. 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 attempt to attract retail customers.
(4) The various ways investment advisers or ``robo-
advisers'' 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 advisers,
or ``robo-advisers'' 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, including a comparison between the stated
preference of retail investors and their actual trading
activity, 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
or ``robo-advisers'' 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 various customer demographic categories (including
age, net worth, and investment experience) of brokers or
investment advisers, or ``robo-advisers'' 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) Whether gamification, psychological nudges, and other
design techniques have created investment activity or interest
in the capital markets by women and minority groups.
(14) Whether gamification, psychological nudges, and other
design techniques have targeted women and minority groups or
created particular risks for them.
(15) 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, the
Investor Advocate of the Commission, and the Congress containing all
findings and recommendations made in carrying out the study required
under subsection (a).
(d) Consultation.--In carrying out the study required under
subsection (a), the Comptroller General shall consult with--
(1) the Securities and Exchange Commission;
(2) the Investor Advocate of the Commission;
(3) the Director of 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, including gamification and behavioral
psychology experts; and
(7) investor advocacy organizations and experts.
(e) Report and Recommendations of the Investor Advocate.--Not later
than the end of the 90-day period beginning on the date that the
Investor Advocate of the Commission receives the report issued under
subsection (c), the Investor Advocate shall--
(1) review the report; and
(2) issue a report to the Congress containing any
regulatory (including rules and policies of Financial Industry
Regulatory Authority and the Municipal Securities Rulemaking
Board) or legislative recommendations the Investor Advocate may
have.
(f) 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.
Union Calendar No. 165
117th CONGRESS
2d Session
H. R. 4685
[Report No. 117-231]
_______________________________________________________________________
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.
_______________________________________________________________________
January 20, 2022
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed