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Sustainable bonds and loans: can we achieve more?

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Sustainable bonds and loans: can we achieve more?

The transition to a sustainable global economy requires real and immediate efforts regarding the financing of investments that provide environmental and social benefits.

Bond markets are playing a key part through the emergence of new instruments such as green, social and sustainability bonds whilst the loan market, through banks and professional associations, is also playing an essential role in attracting capital to finance these global needs.

The targets that we need to reach in terms of sustainability are far better understood than ever before, with sustainable finance now growing at a fast pace.

The rules imposed on issuers or borrowers have not received much attention, yet with adequate incentives to drive the emergence of a sustainable economy forward, its development would be significantly boosted.

Looking back

The Sustainable Development Goals[1] (SDGs) were born at the United Nations Conference on Sustainable Development in Rio de Janeiro in 2012, and are a universal call to action by the UN Development Program (UNDP) to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.

The objective was to produce a set of goals that meet the urgent environmental, political and economic challenges our world is facing.

The SDGs were built on the Millennium Development Goals issued in 2000, and have expanded to include additional critical matters such as gender equality, life underwater and on land, peace, justice and strong institutions.

Meeting the SDGs target is going to be costly, and will require the involvement of the public, but also of the private sector. The UN Conference on Trade and Development (UNCTAD) says achieving the SDGs will require no less than five to seven trillion US dollars in annual investments[2].

ESG in asset management

The investment community has become increasingly active and vocal on sustainable issues that consider environmental, social and governance factors in portfolio management, predominantly in the equity space. The fixed income market via the green bond market and, more recently, social and sustainability bonds and green and sustainable loans have gained strong momentum.

On these particular segments, less attention is paid by investors to the monitoring of how debt issuers and borrowers comply with their undertakings under green social and sustainability bonds or loans.

Green, social and sustainability bonds as well as green or sustainable loans, are any type of debt instrument where the proceeds will be exclusively applied to environmental and/or social projects. These products do not differ from standard instruments and the regulations applying to them are the same as for other fixed income instruments.

However they are attractive for different reasons. Bonds have historically been the remit of the asset management community and institutional investors, who in particular are starting to realise the high-risk posed by climate change to social and financial stability. Green and sustainability loans are traditionally made by banks, and may stand to benefit from regulatory capital relief to further incentivise financial institutions to grant them in the future.

In order to be eligible for their target investors, issuers and borrowers must follow certain rules, aiming at uniting the green, social and sustainability market.

The purpose of the below is to advocate for additional efforts and stricter rules to be applied towards issuers and borrowers to ensure that these instruments really meet their goals.

 The emergence of social and sustainability bonds alongside green bonds

The purpose of a green bond is to dedicate the proceeds towards green projects. These projects are described in the prospectus governing the relevant bond and all designated green projects should, according to the Green Bonds Principles[3] released by the International Capital Market Association (ICMA), provide clear environmental benefits. Social bonds are less well known than green bonds, but at least equally inspiring. They operate on a similar principle and are intended for specific target populations. This includes those who are living below the poverty line, excluded, marginalised populations, communities, unemployed persons, vulnerable groups, people with disabilities, migrants and/or displaced people, undereducated or in need of access to essential goods and services.

There are currently several types of social bonds, ranging from plain vanilla social bonds, which contain standard recourse provisions against the issuer and the proceeds of which are used in social projects, to securitised and covered bonds that are collateralised by one or more specific social projects. This latter category includes covered bonds, asset backed notes, mortgage backed securities and other structures, in which the first source of repayment is generally the cash flows and/or the assets of a given social project.

Projects eligible for social bond treatment can be affordable basic infrastructure, access to essential services, affordable housing, employment generation, microfinance, food security, socioeconomic advancement and empowerment.

Lastly, the proceeds of sustainability bonds, which are arguably the least well-known of all, are exclusively applied to finance, or re-finance, a combination of both green and social projects.

Sustainability bonds are aligned with the core components of both green and social bonds. The purpose of creating a hybrid category is because certain social projects also have environmental co-benefits, and certain green projects may have social co-benefits.

A framework for green and sustainable loans

It is worth noting that a new set of principles has emerged in 2018, the green loans principles, under which the Loan Market Association (the leading professional association of banks) released the green loan principles. These principles aim at creating a framework for the green loan market, particularly by establishing the conditions in which a loan can be labelled green[4]. They were followed in March 2019 by the sustainability loan standards.

The green loan principles set out a list of examples of green projects that include, for example: renewable energy projects, biodiversity conservation and wastewater management. Although these principles leave aside certain aspects of social and sustainability projects, compared to the green, social and sustainability bonds, they unite the criteria to be used by banking institutions and are a great way to incentivise them to be more active in green and sustainable finance.

These criteria and the duties of the borrower there under, closely track the green, social and sustainability bonds principles, as detailed below.

The responsibility of the issuer

Regarding disclosures, issuers of green, social and sustainability bonds are required under the various sets of principles to communicate to investors the sustainability objectives, the process by which they determine how the underlying projects fit within the eligible categories, the related eligibility criteria and the process applied to identify and manage potential environmental and social risks associated with the relevant project[5].

The Green, Social and Sustainable Bonds Principles also encourage issuers to position the information they provide to investors within the context of their general objectives, strategy, policy and processes relating to sustainability, and to disclose any green standards or certifications referenced in the project in which they deploy the capital they raise[6].

Regarding management of proceeds, the Green, social and Sustainability Principles provide that the net proceeds of the relevant issuance should be credited to a sub-account, moved to a sub-portfolio or otherwise tracked by the issuer in an appropriate manner, as well as attested by the issuer in a formal internal process linked to its operations for sustainable projects[7].

In terms of reporting, issuers are required to provide up to date information on the use of proceeds to be renewed annually until full allocation, and on a timely basis in case of material developments[8].

Transparency is of particular value in communicating the expected impact of green, social or sustainable projects[9]. For example, the Green Bonds Principles recommend the use of key performance indicators and, where feasible, quantitative measures such as energy capacity, electricity generation, greenhouse gas emissions reduced/avoided, number of people provided with access to clean power, decrease in water use, reduction in the number of cars required etc.

Regarding green and sustainable loans, according to the Green Loans Principles the relevant borrower should clearly communicate to its lenders its environmental and sustainability objectives and the process by which the relevant project fits these criteria. Similarly to green, social or sustainability bonds, proceeds of the loan should be credited to a dedicated account and appropriately tracked.

Borrowers are also encouraged under such principles to develop internal governance structures for tracking allocation of funds and should always maintain an appropriate level of information on the use of proceeds, including the expected or achieved impacts of the loan. Key performance indicators, measures and disclosure of underlying methodology are recommended.

As one can see, the above-described principles are certainly great steps forward, however, they still fail to be coercive.

Great principles. But what if?

There is a risk that funds raised under a green, social or sustainability bond or loan are not applied consistently, or that a given organisation represents its activities or policies as producing positive environmental outcomes when this is not the case. This practice is known as “green washing” and it is one of the main hurdles faced by the green and sustainable finance market.

The green bond principles make it clear that investors in green bonds are not responsible if issuers do not comply with their commitments or the use of the resulting net proceeds and that these bonds will not default if green bond recommendations are not followed.

The same is also true of for green loans, where no event of default is triggered by the failure to track use of funds or to observe any of the duties described above.

A breach of covenants related to use of proceeds, or meeting specified key performance indicators is generally also not considered as an event of default or even a circumstance that would cause the early repayment of the loan.

Many market participants are encouraging preferred capital treatment for banks that are more active than others in providing green or sustainable loans. This would be a great way to promote them.

However these instruments need to be clearly definable and must contain strict requirements to be efficient in reaching their objectives. If we want them to be attractive, appropriate incentives must be in place for both issuers (or borrowers) and underwriters.

If a default is still a step too far, failure to report or justify that the proceeds of a given bond or loan are used in accordance with the legal documentation, could justify an increase in the spread of the relevant instrument, or additional financial (or other) covenants or undertakings. The purpose of which, would be to compensate the fact that the relevant investment or instrument is no longer eligible for green, social or sustainable treatment.

This should be the price to pay for an issuer or a borrower to benefit from a privileged status, and the way for finance to contribute more than it presently does to the efficiency of green and sustainable development.

Sustainable bonds and loans: can we achieve more?

 The transition to a sustainable global economy requires real and immediate efforts regarding the financing of investments that provide environmental and social benefits.

Bond markets are playing a key part through the emergence of new instruments such as green, social and sustainability bonds whilst the loan market, through banks and professional associations, is also playing an essential role in attracting capital to finance these global needs.

The targets that we need to reach in terms of sustainability are far better understood than ever before, with  sustainable finance now growing at a fast pace.

The rules imposed on issuers or borrowers have not received much attention, yet with adequate incentives to drive the emergence of a sustainable economy forward, its development would be significantly boosted.

Looking back 

The Sustainable Development Goals[10] (SDGs) were born at the United Nations Conference on Sustainable Development in Rio de Janeiro in 2012, and are a universal call to action by the UN Development Program (UNDP) to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. The objective was to produce a set of goals that meet the urgent environmental, political and economic challenges our world is facing.

The SDGs were built on the Millennium Development Goals issued in 2000, and have expanded to include additional critical matters such as gender equality, life underwater and on land, peace, justice and strong institutions.

Meeting the SDGs target is going to be costly, and will require the involvement of the public, but also of the private sector. The UN Conference on Trade and Development (UNCTAD) says achieving the SDGs will require no less than five to seven trillion US dollars in annual investments[11].

 ESG in asset management 

The investment community has become increasingly active and vocal on sustainable issues that consider environmental, social and governance factors in portfolio management, predominantly in the equity space. The fixed income market via the green bond market and, more recently, social and sustainability bonds and green and sustainable loans have gained strong momentum.

On these particular segments, less attention is paid by investors to the monitoring of how debt issuers and borrowers comply with their undertakings under green social and sustainability bonds or loans.

Green, social and sustainability bonds as well as green or sustainable loans, are any type of debt instrument where the proceeds will be exclusively applied to environmental and/or social projects. These products do not differ from standard instruments and the regulations applying to them are the same as for other fixed income instruments.

However they are attractive for different reasons. Bonds have historically been the remit of the asset management community and institutional investors, who in particular are starting to realise the high-risk posed by climate change to social and financial stability. Green and sustainability loans are traditionally made by banks, and may stand to benefit from regulatory capital relief to further incentivise financial institutions to grant them in the future.

In order to be eligible for their target investors, issuers and borrowers must follow certain rules, aiming at uniting the green, social and sustainability market.

The purpose of the below is to advocate for additional efforts and stricter rules to be applied towards issuers and borrowers to ensure that these instruments really meet their goals.

The emergence of social and sustainability bonds alongside green bonds 

The purpose of a green bond is to dedicate the proceeds towards green projects. These projects are described in the prospectus governing the relevant bond and all designated green projects should, according to the Green Bonds Principles[12] released by the International Capital Market Association (ICMA), provide clear environmental benefits. Social bonds are less well known than green bonds, but at least equally inspiring. They operate on a similar principle and are intended for specific target populations. This includes those who are living below the poverty line, excluded, marginalised populations, communities, unemployed persons, vulnerable groups, people with disabilities, migrants and/or displaced people, undereducated or in need of access to essential goods and services.

There are currently several types of social bonds, ranging from plain vanilla social bonds, which contain standard recourse provisions against the issuer and the proceeds of which are used in social projects, to securitised and covered bonds that are collateralised by one or more specific social projects. This latter category includes covered bonds, asset backed notes, mortgage backed securities and other structures, in which the first source of repayment is generally the cash flows and/or the assets of a given social project[13].

Projects eligible for social bond treatment can be affordable basic infrastructure, access to essential services, affordable housing, employment generation, microfinance, food security, socioeconomic advancement and empowerment.

Lastly, the proceeds of sustainability bonds, which are arguably the least well-known of all, are exclusively applied to finance, or re-finance, a combination of both green and social projects.

Sustainability bonds are aligned with the core components of both green and social bonds. The purpose of creating a hybrid category is because certain social projects also have environmental co-benefits, and certain green projects may have social co-benefits.

 A framework for green and sustainable loans 

It is worth noting that a new set of principles has emerged in 2018, the green loans principles, under which the Loan Market Association (the leading professional association of banks) released the green loan principles. These principles aim at creating a framework for the green loan market, particularly by establishing the conditions in which a loan can be labelled green[14]. They were followed in March 2019 by the sustainability loan standards.

The green loan principles set out a list of examples of green projects that include, for example: renewable energy projects, biodiversity conservation and wastewater management. Although these principles leave aside certain aspects of social and sustainability projects, compared to the green, social and sustainability bonds, they unite the criteria to be used by banking institutions and are a great way to incentivise them to be more active in green and sustainable finance.

These criteria and the duties of the borrower there under, closely track the green, social and sustainability bonds principles, as detailed below. 

The responsibility of the issuer

 Regarding disclosures, issuers of green, social and sustainability bonds are required under the various sets of principles to communicate to investors the sustainability objectives, the process by which they determine how the underlying projects fit within the eligible categories, the related eligibility criteria and the process applied to identify and manage potential environmental and social risks associated with the relevant project[15].

The Green, Social and Sustainable Bonds Principles also encourage issuers to position the information they provide to investors within the context of their general objectives, strategy, policy and processes relating to sustainability, and to disclose any green standards or certifications referenced in the project in which they deploy the capital they raise[16].

Regarding management of proceeds, the Green, social and Sustainability Principles provide that the net proceeds of the relevant issuance should be credited to a sub-account, moved to a sub-portfolio or otherwise tracked by the issuer in an appropriate manner, as well as attested by the issuer in a formal internal process linked to its operations for sustainable projects[17].

In terms of reporting, issuers are required to provide up to date information on the use of proceeds to be renewed annually until full allocation, and on a timely basis in case of material developments[18].

Transparency is of particular value in communicating the expected impact of green, social or sustainable projects[19]. For example, the Green Bonds Principles recommend the use of key performance indicators and, where feasible, quantitative measures such as energy capacity, electricity generation, greenhouse gas emissions reduced/avoided, number of people provided with access to clean power, decrease in water use, reduction in the number of cars required etc.

Regarding green and sustainable loans, according to the Green Loans Principles the relevant borrower should clearly communicate to its lenders its environmental and sustainability objectives and the process by which the relevant project fits these criteria. Similarly to green, social or sustainability bonds, proceeds of the loan should be credited to a dedicated account and appropriately tracked.

Borrowers are also encouraged under such principles to develop internal governance structures for tracking allocation of funds and should always maintain an appropriate level of information on the use of proceeds, including the expected or achieved impacts of the loan. Key performance indicators, measures and disclosure of underlying methodology are recommended.

As one can see, the above-described principles are certainly great steps forward, however, they still fail to be coercive. 

Great principles. But what if?

 There is a risk that funds raised under a green, social or sustainability bond or loan are not applied consistently, or that a given organisation represents its activities or policies as producing positive environmental outcomes when this is not the case. This practice is known as “green washing” and it is one of the main hurdles faced by the green and sustainable finance market.

The green bond principles make it clear that investors in green bonds are not responsible if issuers do not comply with their commitments or the use of the resulting net proceeds and that these bonds will not default if green bond recommendations are not followed.

The same is also true of for green loans, where no event of default is triggered by the failure to track use of funds or to observe any of the duties described above.

A breach of covenants related to use of proceeds, or meeting specified key performance indicators is generally also not considered as an event of default or even a circumstance that would cause the early repayment of the loan.

Many market participants are encouraging preferred capital treatment for banks that are more active than others in providing green or sustainable loans. This would be a great way to promote them.

However these instruments need to be clearly definable and must contain strict requirements to be efficient in reaching their objectives. If we want them to be attractive, appropriate incentives must be in place for both issuers (or borrowers) and underwriters.

If a default is still a step too far, failure to report or justify that the proceeds of a given bond or loan are used in accordance with the legal documentation, could justify an increase in the spread of the relevant instrument, or additional financial (or other) covenants or undertakings. The purpose of which, would be to compensate the fact that the relevant investment or instrument is no longer eligible for green, social or sustainable treatment.

This should be the price to pay for an issuer or a borrower to benefit from a privileged status, and the way for finance to contribute more than it presently does to the efficiency of green and sustainable development.

Investing

Wall Street Week Ahead: Investors weigh new stock leadership as broader market wobbles

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Wall Street Week Ahead: Investors weigh new stock leadership as broader market wobbles 1

By Lewis Krauskopf

NEW YORK (Reuters) – A shakeup in stocks accelerated by the past week’s surge in Treasury yields has investors weighing how far a recent leadership rotation in the U.S. equity market can run, and its implications for the broader S&P 500 index.

Moves this week further spurred a shift that has seen months-long outperformance for energy, financial and other shares expected to benefit from an economic recovery, while a climb in Treasury yields weighed on the technology stocks that have led markets higher for years.

The two-track market left the benchmark S&P 500 down for the week, and sparked questions about whether it could sustain gains going forward if the tech and growth stocks that account for the biggest weights in the index struggle.

So far this year, the S&P 500, which gives more influence to stocks with larger market values, is up 1.5%, while a version of the index that weights stocks equally is up 5%.

“That just tells us the gains are less narrow, more companies are participating, and I think that’s healthy,” said James Ragan, director of wealth management research at D.A. Davidson.

The focus on market leadership comes as investors are weighing whether the S&P 500 is due for a significant pullback after a 70% run since March, with the rise in long-dormant yields the latest sign of trouble for equities as it means bonds are more serious investment competition. The yield on the 10-year U.S. Treasury note this week jumped to a one-year peak of 1.6% before pulling back.

Economic improvement will be in focus in the coming weeks, including the monthly U.S. jobs report due next Friday, as will the country’s ability to ensure widespread coronavirus vaccinations, especially as new variants emerge.

Tech and momentum stocks helped drive returns in 2020 “when everyone was locked down and all they had was their computer,” said Jack Ablin, chief investment officer at Cresset Capital Management. “Now it seems with the vaccines, the stimulus and the prospect of reopening that we are looking out toward a recovery phase.”

The shift in the market this week is building on one that was fueled in early November, when Pfizer’s breakthrough COVID-19 vaccine news generated broad bets on an economic rebound in 2021.

Among the moves since that point: the S&P 500 financial and energy sectors are up 29% and 65%, respectively, against a nearly 9% rise for the benchmark index and 7% rise for the tech sector. The Russell 1000 value index has gained 16.5% against a 4.3% climb for its growth counterpart, while the smallcap Russell 2000 is up 34%.

“You definitely are seeing the reopening trade that has pretty much come alive here,” said Gary Bradshaw, portfolio manager of Hodges Capital Management.

Despite the gains, there remains “plenty of room for the reflation trade to run from a valuation perspective,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said in a report this week. RBC is “overweight” the financials, materials and energy sectors.

Rising rates tend to be favorable for more cyclical sectors, David Lefkowitz, head of Americas equities at UBS Global Wealth Management, said in a note, with financials, energy, industrials and materials showing the strongest positive correlations among sectors with 10-year Treasury yields.

Still, how long the market’s reopening trade lasts remains to be seen. Investors may be reluctant to stray from tech and growth stocks, especially with many of the companies expected to put up strong profits for years.

Any setbacks with the economy or with efforts to quell the coronavirus could revive the stay-at-home stocks that thrived for most of 2020.

And with a GameStop-fueled retail-trading frenzy taking hold this year, banks and other stocks in the reopening trade may fail to draw the same attention from amateur investors as stocks such as Tesla, said Rick Meckler, partner at Cherry Lane Investments.

“There isn’t the pizzazz to those stocks,” Meckler said. “There rarely is a potential for stocks to make the kind of moves that big tech growth stocks have made.”

(Reporting by Lewis Krauskopf; editing by Richard Pullin)

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Exclusive: European officials urge World Bank to exclude fossil-fuel investments

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Exclusive: European officials urge World Bank to exclude fossil-fuel investments 2

By Kate Abnett and Andrea Shalal

WASHINGTON (Reuters) – Senior officials from Europe have urged the World Bank’s management to expand its climate change strategy to exclude investments in oil- and coal-related projects around the world, and gradually phase out investment in natural gas projects, according to three sources familiar with the matter.

In the six-page letter dated Wednesday, World Bank executive directors representing major European shareholder countries and Canada, welcomed moves by the Bank to ensure its lending supports efforts to reduce carbon emissions.

But they urged the Bank – the biggest provider of climate finance to the developing world – to go even further.

“We … think the Bank should now go further and also exclude all coal- and oil-related investments, and further outline a policy on gradually phasing out gas power generation to only invest in gas in exceptional circumstances,” the European officials wrote in the letter, excerpts of which were seen by Reuters.

The officials took note of the World Bank’s $620 million investment in a multibillion-dollar liquified natural gas project in Mozambique approved by the Bank’s board in January, but did not call for its cancellation, one of the sources said.

The World Bank confirmed receipt of the letter but did not disclose all its contents. It noted that the World Bank and its sister organizations had provided $83 billion for climate action over the past five years.

“Many of the initiatives called for in the letter from our shareholders are already planned or in discussion for our draft Climate Change Action Plan for 2021-2025, which management is working to finalize in the coming month,” the Bank told Reuters in an emailed statement.

The Bank’s first climate action plan began in fiscal year 2016.

The United States, the largest shareholder in the World Bank, this month rejoined the 2015 Paris climate accord, and has vowed to move multilateral institutions and U.S. public lending institutions toward “climate-aligned investments and away from high-carbon investments.”

World Bank President David Malpass told finance officials from the Group of 20 economies on Friday that the Bank would make record investments in climate change mitigation and adaptation for a second consecutive year in 2021.

“Inequality, poverty, and climate change will be the defining issues of our age,” Malpass told the officials. “It is time to think big and act big in finding solutions,”

He said it was also launching new reviews to integrate climate into all its country diagnostics and strategies, a step initiated before the letter from the European officials, said one of the sources.

(Reporting by Andrea Shalal in Washington and Kate Abnett in Brussels; Additional reporting by Valerie Volcovici in Washington; Editing by Matthew Lewis)

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GameStop rally fizzles; shares still register 151% weekly gain

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GameStop rally fizzles; shares still register 151% weekly gain 3

By Aaron Saldanha and David Randall

(Reuters) – GameStop Corp closed 6% lower on Friday as an early rally fizzled but the stock finished the week 151% higher in a renewed surge that left analysts puzzled.

The video game retailer’s shares closed at $101.74 after retreating from a session high of $142.90. The weekly rocket ride higher came despite a broader market selloff that sent the benchmark S&P 500 <.SPX> down 2.5% over the same time.

Analysts have struggled to find a clear explanation, and some were skeptical the rally would have legs.

“You might be able to make some quick trading money and it could be a lot of money, but in the end, it’s the greater fool theory,” said Eric Diton, president and managing director at The Wealth Alliance in New York. The theory refers to buying stocks that are over-valued, anticipating a “greater fool” will buy them later at a higher price.

Analysts mostly ruled out a short squeeze like the one that fueled GameStop’s rally in January, when individual investors using Robinhood and other apps punished hedge funds that had bet against the stock, forcing them to unwind short positions. Many GameStop buyers took their cues from online investment forums on Reddit and elsewhere.

Short interest accounted for 28.4% of the float on Thursday, compared with a peak of 142% in early January, according to S3 Partners.

Options market activity in GameStop, which has returned to the top of the list in a social media-driven retail trading frenzy, suggested investors were betting on higher prices, higher volatility, or both.

Refinitiv data showed retail investors have been buying deep out-of-the-money call options, which have contract prices to buy far higher than the current stock price.

Many of those option contracts were set to expire on Friday, meaning handsome gains for those who bet on a further rise in GameStop’s stock price.

Call options, profitable for holders if GameStop shares hit $200 and $800 this week, have been particularly heavily traded, the data showed. GameStop’s stock traded this week as high as $184.54 on Thursday, far below the $483 intraday high it hit in January.

“The actors are looking to take advantage of everything they can to maximize their impact and the timing is important,” said David Trainer, chief executive officer of investment research firm New Constructs. “The options expiration will contribute to their strategy on how to push the stock as much as they can and maximize their profits.”

Bots on major social media websites have been hyping GameStop and other “meme stocks,” although the extent to which they influenced prices was unclear, according to analysis by Massachusetts-based cyber security company PiiQ Media.

The U.S. Securities and Exchange Commission (SEC) on Friday suspended trading in 15 companies because of “questionable trading and social media activity.” GameStop was not among them.

The 15 companies were in addition to six stocks it recently suspended due to suspicious social media activity.

Robinhood said it has received inquiries from regulators about temporary trading curbs it imposed during a wild rally in shorted stocks earlier this year.

Other Reddit favorites were also lower on Friday, with cinema operator AMC Entertainment down 3.4%, headphone maker Koss off 22.4% and marijuana company Sundial Growers down 2.9%.

(Reporting by Aaron Saldanha in Bengaluru; additional reporting by Caroline Valetkevitch in New York, and Devik Jain and Sruthi Shankar; Writing by David Randall; Editing by Alden Bentley, Shinjini Ganguli, Anil D’Silva, Dan Grebler and David Gregorio)

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