WASHINGTON (Reuters) – The pick of US President Joe Biden as the head of a key market regulator on Tuesday promised an in-depth look at the issues raised by the GameStop Corp stock market frenzy and suggested that companies may have to disclose their potential risks linked to climate change.

Gary Gensler, the chairman’s candidate for the Securities and Exchange Commission, said he would examine whether retail investors get the best prices when brokers are paid for their order flow and trading practices that encourage trading. negotiation.

He also said the agency could explore the potential issues raised when a handful of companies, such as Citadel Securities, dominate the order processing of retail traders.

“What if a business… concentrates and dominates an area? A company now owns 40-50% of the retail flow and what does that do to the pricing of capital in this country? He said during a confirmation hearing before the Senate Banking Committee.

Shares of video game retailer GameStop have rocked sharply in recent weeks as retail traders on social media site Reddit defended the stock against heavy bets from short sellers – who profit when stocks fall.

Wall Street is closely monitoring the movements of the Biden administration in the regulatory arena after four relatively easy years under former President Donald Trump.

Progressives see the SEC and the Consumer Financial Protection Bureau as key elements in advancing climate change and social justice policy priorities and expect Gensler and Rohit Chopra, whom Biden has appointed to lead the CFPB , take a hard line on Wall Street.

Republicans have warned that Gensler and Chopra, both seasoned corporate regulators, could take too heavy-handedly a private enterprise approach if confirmed in their positions.

As head of the Commodity Futures Trading Commission, Gensler has built a reputation as a strong operator ready to stand up to powerful Wall Street interests.

Gensler suggested he would pursue some sort of disclosure for state-owned companies regarding the risks posed by climate change. He said businesses shouldn’t be able to hide these risks and that investors rather than businesses should determine what information is disclosed. He also said the SEC should consider whether companies should disclose political spending, a long-standing priority for Democrats.

Gensler also said he may seek new regulatory clarity around cryptocurrencies, which he says can be a “catalyst for change” but pose investor protection concerns.

“It’s important for the SEC to provide guidance and clarity … sometimes it’s clarity that will be a thumbs-up, but even if it’s a thumbs-down, it’s important to provide it.”

PRIVACY OF CONSUMERS

Currently a commissioner at the Federal Trade Commission, where he campaigned for tougher privacy and law enforcement penalties, Chopra helped establish the CFPB, which was officially launched in 2011.

Democrats pushed Chopra to revive the agency after the Trump administration weakened the app and several rules, while Republicans warned the CFPB had overstepped its previously Democratic-controlled authority.

Chopra said one area he would like to focus on if confirmed would be the entry of big tech companies into financial services and what that could mean for consumer privacy.

He also said he would prioritize enforcing fair loan laws and monitoring the student loan market, adding that it was important to impose monetary penalties on companies that commit wrongdoing, both to reimburse aggrieved consumers and as a deterrent.