Steven Maijoor, the chair of the European Securities and Markets Authority, confirmed today his regulatory body is looking into zero-commission trading.
Addressing the Committee on Economic and Monetary Affairs of the European Parliament earlier today, Maijoor warned about the “gamification” of investing and stated that trading strategies designed to secure the price of a financial instrument at an “abnormal or artificial level” may represent market manipulation.
The regulator stated that buying shares where a large short position exists would not constitute “market abuse” but that “coordinated strategies to buy and sell at certain conditions” could constitute market manipulation.
Maijoor also spoke about Robinhood’s decision to exclude retail investors from trading GameStop shares.
He noted that Robinhood had admitted that its clearing house was in part responsible for the sudden cessation in retail trading due to higher margin calls.
A similar situation didn’t happen in the EU because the stocks that “followed a similar situation did not experience as much volatility and concentration as in the US.”
In his final remarks, he told the European Parliament that the ESMA will continue to monitor developments and may take further action where appropriate.