Statement on Staff Report on Equity and Options Market Structure Conditions in Early 2021

Today, the staff of the Securities and Exchange Commission published a report on the “meme stock” events of winter 2021, and how these events affected individual investors. These meme stocks, including but not limited to GameStop, exhibited significant price volatility, trading volume, and attention in the markets in January.

January’s events gave us an opportunity to consider how we can further our efforts to make the equity markets as fair, orderly, and efficient as possible. Making markets work for everyday investors gets to the heart of the SEC’s mission.

In the report, staff raised a number of issues for additional consideration, including:  

• Events that may cause a brokerage to restrict trading, as well as matters related to clearing and settling.
• The use of digital engagement practices (DEPs), including predictive data analytics, differential marketing, and behavioral prompts.[1]
• Equity market structure and incentives, as well as the role of dark pools and wholesalers.
• The transparency and related market dynamics of short selling.

I would like to thank the staff for bringing their expertise to this important report, and for their ongoing work on to address the issues that January’s events raised: David Saltiel, Emily Westerberg Russell, Richard Holley, Roni Bergoffen, Meredith MacVicar, David Shillman, Jeff Mooney, Alex Jadin, Mark Donohue, Eli Kozminsky, David Cohen, Justin Pica, and Elizabeth Fitzgerald in the Division of Trading and Markets; Jessica Wachter, Lauren Moore, Amy Edwards, Chris Arnold, and Julia Reynolds in the Division of Economic Risk and Analysis; Tim Husson in the Division of Investment Management; Daniel Kahl, James Reese, Michael Hershaft, and Jennifer McCarthy in the Division of Examinations; Marie-Louise Huth, Robert Teply, Meredith Mitchell, Natalie Shioji, Robert Bagnall, Amy Scully, Ronesha Butler, Will Miller, Donna Chambers, Sean Bennett, Jeffrey Finnell, and Laura Jarsulic in the Office of General Counsel; Melissa Hodgman, Carolyn Welshhans, and Marc Johnson in the Division of Enforcement; and Heather Slavkin Corzo, Amanda Fischer, Adam Large, and Sai Rao in the Office of the Chair.

Their efforts speak to the spirit of collaboration, care, and dedication of the SEC’s talented staff.