SEC Creates New Risk Division

The Securities and Exchange Commission has formed a new unit, the Division of Risk, Strategy and Financial Innovation, with University of Texas School of Law Professor Henry T.C. Hu in charge as director.

The division combines the Office of Economic Analysis, the Office of Risk Assessment and other functions to combine economic, financial and legal disciplines.

“This new division will enhance our capabilities and help identify developing risks and trends in the financial markets,” said SEC Chairman Mary Schapiro. “By combining economic, financial and legal analysis in a single group, this new unit will foster a fresh approach to exchanging ideas and upgrading agency expertise.”

Commenting on his new position, Hu said the financial markets are in a “seminal time” and added, “The derivatives revolution, the risk of hedge funds and institutional investors, technological change and other factors have transformed both capital markets and corporate governance.”

With the creation of this new division, the SEC now has five divisions, including: the Division of Corporation Finance, the Division of Enforcement, the Division of Investment Management and the Division of Trading and Markets.