SEC Announces Launch of Strategic Hub for Innovation and Financial Technology

On October 18, 2018, the Securities and Exchange Commission (SEC) launched its Strategic Hub for Innovation and Financial Technology (FinHub), designed to engage investors and market participants on FinTech issues and initiatives. 

Valerie A. Szczepanik, the SEC’s Senior Advisor for Digital Assets and Innovation and Associate Director in the SEC's Division of Corporation Finance, will lead FinHub, which will focus on topics such as distributed ledger technology (DLT) and digital assets, automated investment advice, digital marketplace financing, artificial intelligence and machine learning.  The SEC’s various divisions will assign staff with expertise in the FinTech space.  FinHub will replace and build on the efforts of several of the SEC’s internal FinTech working groups.

The SEC said that FinHub will provide a platform for market participants to engage directly with SEC staff on innovations and technological developments, publicize the SEC’s FinTech-related activity on the FinHub webpage, host FinTech events (including a forum on DLT and digital assets planned for 2019) and act as a resource for SEC staff to acquire and disseminate FinTech-related information within the agency.  Further, it will serve as the SEC’s liaison to domestic and global regulators in respect of innovations in financial, regulatory and supervisory systems.

In a press release announcing the launch, SEC Chairman Jay Clayton said that the FinHub will provide “a central point of focus for [the SEC’s] efforts to monitor and engage in innovations in the securities markets that hold promise, but which also require a flexible, prompt regulatory response,” and Szczepanik said that she hopes the platform will “provide a clear path for entrepreneurs, developers, and their advisers to engage with SEC staff, seek input, and test ideas.”

The launch of the FinHub represents another indication that the SEC is paying close attention to FinTech developments, and will provide market participants with another resource through which to engage with regulators on emerging technologies.  We will monitor the development of FinHub to see what role it will play in advancing the SEC’s efforts and how market participants can best engage with it. We will also continue to monitor any developments, publications and announcements from the FinHub, along with similar resources at other U.S. regulators, such as the Commodity Futures Trading Commission’s LabCFTC initiative.