[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