U.S. SEC taps MIT finance professor Haoxiang Zhu to lead unit overseeing trading and markets

2:50 pm Friday, November 19th, 2021

By Katanga Johnson

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) named Haoxiang Zhu as head of the agency’s Division of Trading and Markets, where he is expected to help the regulator lead major new policies around equity market structure, among other priorities, the agency said on Friday.

Zhu, a professor of finance at the Massachusetts Institute of Technology, will begin at the SEC on Dec. 10, the agency said, adding that acting division head, David Saltiel, will serve as deputy to Zhu.

“The work of our Division of Trading and Markets links the investors in our capital markets with those companies seeking to raise money, hire employees, and grow,” said SEC chair, Gary Gensler.

“Haoxiang brings to the SEC deep expertise and commitment to the agency’s efforts to enhance and update our rules to continue to maintain markets that are the envy in the world.”

Zhu is taking up his role as the SEC contemplates a number of major equity market structure changes following January’s GameStop saga.

Gensler told Congress earlier this year that the agency would address short selling disclosures, game-like trading prompts used by brokers, and brokers’ practice of sending customer orders to wholesale market makers for a fee.

In October, the agency published a post-mortem into how amateur traders using commission-free retail brokerages drove shares in GameStop and other popular “meme” stocks to extreme highs, squeezing hedge funds that had bet against them.

Despite the extraordinary series of events, the SEC concluded that the basic plumbing of the market remained “sound.”

It did not address several outstanding questions, including whether bad actors manipulated social media to whip up positive sentiment in GameStop, or whether hedge funds tried to pressure retail brokers to restrict trading in GameStop, something that all parties concerned have denied.

(Reporting by Katanga Johnson in Washington; Editing by Chizu Nomiyama)