GameStop will be front and center Thursday during a hearing on Capitol Hill.
The SEC is considering measures to require big investors to disclose more about short positions, or bets that stocks will fall, and to protect small investors from trading apps that can boost risky trading activity.
The review was prompted by January's GameStop saga and the meltdown of Archegos Capital.
GameStop had a rollercoaster rally in January, fed by posts on Reddit, as retail investors trading on low-cost brokerage platforms, bought shares causing big losses for hedge funds that had shorted the stock.
"While entities such as GameStop, Melvin Capital, Reddit, and Robinhood have garnered a significant amount of attention, the policy issues raised by this winter’s volatility go beyond those companies," said Gensler in prepared remarks. "Instead, I think these events are part of a larger story about the intersection of finance and technology."
Gensler will point out the risks those events might have placed on the entire financial system.
He'll touch on the impact a company can have if it doesn't have sufficient liquidity to meet margin calls.
Gensler will detail that several hedge funds lost significant money during these events, and how market makers or brokers at a clearinghouse may increase potential system-wide risks if one with significant size or market share fails.
"Whenever there are major market events, it's a good idea to consider what risks they might have placed on the entire financial system," Gensler will tell lawmakers.