Toomey to SEC: Don’t Restrict Investor Freedom Under the Guise of Investor Protection
Washington,
D.C.
– U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) is urging the
Securities and Exchange Commission (SEC) not to impose new regulations on
digital trading technologies that restrict investor freedom under the guise of
investor protection. After the GameStop trading frenzy earlier
this year and the rise of Robinhood’s mobile trading app, the SEC solicited
public comments on digital trading technologies.
In
a new letter
to SEC Chairman Gary Gensler, Senator Toomey reiterated that it is not the
government’s role to tell retail investors what they can and cannot purchase,
including through restrictions on digital platforms. Moreover, federal
securities laws do not authorize the SEC to act as a merit regulator and limit
the choices of investors in the absence of fraudulent or manipulative conduct.
“While I appreciate the SEC’s review
of digital trading technology, I urge the SEC to proceed cautiously and avoid
the temptation to pursue paternalistic regulations that restrict investor
freedom under the guise of investor protection,”
Toomey wrote.
New
innovations like user-friendly mobile apps, commission free-trading, no minimum
account balances, and low-fee mutual and exchange-traded funds have empowered
millions of Americans to share in the tremendous wealth gains generated by the
stock market.
“It has never been easier, cheaper,
or more convenient for a person of modest means to invest in—and share in the
gains of—the stock market,” Toomey continued.
“That is why I am concerned by suggestions in the SEC’s request that ‘digital
engagement platforms’ . . . may harm retail investors by encouraging strategies
that carry additional risk, such as frequent trading, options trading, trading
on margin, or other kinds of trading in complex securities products.”
To
read Ranking Member Toomey’s full letter, click
here.
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