The Securities and Exchange Commission said its Strategic Hub for Innovation and Financial Technology, commonly referred to as FinHub, will become a stand-alone office, according to a news release.

FinHub was established in 2018 within the Division of Corporation Finance to serve as a resource for public engagement on the SEC's fintech-related issues and initiatives.

Valerie A. Szczepanik, who has been overseeing the unit, will continue to lead FinHub as its first director and will report directly to SEC Chairman Jay Clayton. She will coordinate the analysis of emerging financial innovations and technologies across the SEC's divisions and offices and with global regulators and will advise the commission and SEC staff as they develop and implement policies in this area, the release said.

The release noted that FinHub has spearheaded agency efforts to encourage responsible innovation in the financial sector, including evolving areas such as distributed ledger technology and digital assets, automated investment advice, digital marketplace financing, and artificial intelligence and machine learning. It has also enabled market and technology innovators, as well as domestic and international regulators, to engage with SEC staff on new approaches to capital formation, trading and other financial services within the parameters of the federal securities laws, the release said.

Clayton said the decision to establish FinHub as a stand-alone office furthers the agency’s commitment to facilitating the introduction of new technologies for the benefit of investors and the efficiency and resiliency of their markets. “The agency is fortunate to benefit from Val's expertise and deep knowledge in the areas of innovation, financial technology and investor protection, and I’m pleased she will continue to lead FinHub as its first director,” he said in a statement.

Szczepanik, who served as assistant director in the Division of Enforcement's Cyber Unit before joining the Division of Corporation Finance, said that as technology evolves, the scope and complexity of FinHub's work has continued to evolve and expand. “This organizational shift will facilitate the agency's agility and flexibility to work with market participants and regulators worldwide, and to encourage leading-edge innovation that will shape the intersection between the federal securities laws and technology,” she added.

The move to beef up FinHub's role in leading and coordinating policy across all SEC divisions and offices will benefit market innovators and strengthen investor protection, said Bill Hinman, director of the Division of Corporation Finance.