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S.P. Kothari to Conclude Tenure As SEC Chief Economist and Division of Economic and Risk Analysis Director


Washington D.C., Dec. 21, 2020 —

The Securities and Exchange Commission today announced that S.P. Kothari, Chief Economist and Director of the SEC’s Division of Economic and Risk Analysis, will conclude his tenure by the end of January.

Since joining the SEC in March 2019, Dr. Kothari led the Division’s cadre of economists, data scientists, and other professionals in advancing the Commission’s mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation through sound economic analysis and rigorous data analytics. Under his leadership, DERA engaged across the entire range of the agency’s mission areas, including rulemaking, examination, and enforcement. Its multi-disciplinary analyses helped the Commission identify, analyze, and respond to economic and market issues, including those related to new financial products, investment and trading strategies, systemic risk, and fraud.

“As Chief Economist, S.P. has raised the profile of the SEC, both domestically and internationally, on a range of topics affecting investors and our markets, including within the President’s Working Group on Financial Markets, the Financial Stability Oversight Council, and the Financial Stability Board,” said SEC Chairman Jay Clayton. “S.P. achieved this by providing that rare combination of sophisticated macroeconomic analysis and market pragmatism as well as a knack for making complicated economic and market commentary accessible to everyone.  He is also a pleasure to work with.  These invaluable skills were on full display during the COVID-19 related market stress of March and April 2020, in his subsequent work leading our Interconnectedness Initiative, and through his and the Division’s many accomplishments.  S.P. has my profound thanks and respect for his leadership and service.”

“I have been honored to lead the Division of Economic and Risk Analysis over the last two years,” said Dr. Kothari.  “I am thankful for the Division’s talented staff and the support of the Chairman and others at the Commission.  Working with everyone here has been a great privilege and tremendously rewarding.”

“S.P. treated all of the Division’s issues and concerns with care and respect.  We will greatly miss his genuine warmth and enthusiasm,” said DERA Deputy Director Chyhe Becker.

Under Dr. Kothari’s leadership, the Division of Economic and Risk Analysis engaged in projects that affected a broad cross-section of our markets.

Response to COVID-19 Market Stresses

Dr. Kothari chaired the internal COVID-19 Market Monitoring Group, which was formed to assist the Commission and its various divisions and offices in (1) developing Commission and staff analyses and actions related to the effects of COVID-19 on markets, issuers and investors – including in particular long-term Main Street investors, and (2) responding to requests for information, analyses, and assistance from fellow regulators and other public sector partners on market matters arising from the effects of COVID-19.  One of the COVID-19 Market Monitoring Group’s initial initiatives was to explore whether credit assessments and credit rating agency downgrades – and market anticipation of, and responses to, those ratings actions – contributed to negative procyclicality in certain circumstances and had implications for financial stability.  The SEC published its observations on this topic in July 2020.

Under the leadership of Dr. Kothari, DERA engaged in additional work related COVID-19 and its impact on the securities markets.  In October 2020, SEC staff published the report U.S. Credit Markets: Interconnectedness and the Effects of the COVID-19 Economic Shock which focused on the origination, distribution and secondary market flow of credit across U.S. credit markets. The report also addressed how the related interconnections in the credit markets operated as the effects of the COVID-19 pandemic took hold. 

Market and Risk Analysis

During Dr. Kothari’s tenure, DERA assessed economic issues and market risk by conducting its own risk assessments and by working collaboratively with other agencies and organizations, both domestic and international, to assess global economic risks and threats facing the markets.  A centerpiece of these efforts was the publication of the DERA Economic and Risk Outlook, which examines economic and risk indicators to provide the Commission and the public with key information related to the securities markets.  DERA published the inaugural edition of the Outlook in December 2019 and has since completed quarterly editions.

Dr. Kothari was also active in international risk monitoring work, co-chairing the Financial Stability Board’s (FSB) Non-Markets Experts Group and its working group on interconnectedness mapping.  He also represented the SEC on IOSCO’s Committee on Emerging Risk and the FSB’s Surveillance Framework Group.

Rulemaking and Enforcement Support

In the last two years, DERA provided economic analyses for over 50 Commission rules as well as numerous SRO matters and new products.  These rules included Regulation Best Interest, rules to modernize the collection, consolidation and dissemination of equity market data, and rules to modernize and improve the efficiency and integrity of the proxy process.  DERA also provided economic expertise in investigations, settlement negotiations, and litigation matters, directly supporting the Commission’s essential enforcement mission.  

Data Analytics

Over the last two years, DERA’s data scientists have used artificial intelligence and other advanced methods to develop a data centric risk analytics infrastructure supporting a broad range of risk, compliance, and research needs at the Commission.  In recognition of the increased role of data science and analytics at the Commission and within DERA, Dr. Kothari created the new Office of Data Science and Innovation within DERA to provide the Commission and its staff with expertise on data analytics, risk assessment, and structured disclosure

Dr. Kothari joined the SEC from the Sloan School of Management at the Massachusetts Institute of Technology (MIT), where he was a professor of accounting and finance and a former Deputy Dean.  Dr. Kothari spent nearly two decades at MIT, both as a professor and as an administrator. Dr. Kothari has served as the Co-Chair of the Board of Governors Asia School of Business, Kuala Lumpur, faculty director of the MIT-India Program, and editor of the academic publication Journal of Accounting & Economics. In 2008, he served as global head of equity research for Barclays Global Investors, where he was responsible for research supporting the firm’s active equity strategies.

In 2020, he was a recipient of the Padma Shri award – one of the highest honors given by the government of India.  In 2019, the London Business School bestowed an Honorary Doctorate to Dr. Kothari. 

Upon Dr. Kothari’s departure, Dr. Chyhe Becker, currently the Deputy Director of the Division, will assume the role of Acting Director.


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