Good morning. Bob [Schwartz], thank you for that generous introduction. It is a great pleasure to be back at Baruch College for another conference with a rich agenda that blends industry and academic perspective in expert fashion. My first panel at Baruch was in May 2004, and the conference was titled “Electronic vs. Floor Based Trading.” Venues and trading tools have clearly come a long way since then, but spirited debate on core issues – such as achieving best execution, enhancing liquidity, and promoting efficient price discovery – continues and remains vibrant today. It is a privilege to be part of today’s program.
Please understand that I speak today in my official capacity as the Commission’s Director of the Division of Trading and Markets. These remarks do not necessarily reflect the views of the Commission, the Commissioners, or my Division colleagues.
I first met Bob roughly thirty years ago, before he came to Baruch from NYU. I worked for Dean Furbush, Nasdaq’s Chief Economist, who set up a meeting to discuss one of Bob’s favorite topics: call markets. At the time, Nasdaq did not have a formal process to open or close its market, and Dean wanted to explore the idea of an electronic auction. (Nasdaq would go on to launch opening and closing crosses in January and April 2004, respectively.)
The meeting took place in Lower Manhattan on a Fall night. In addition to Dean, Bob, and me, three or four heads of major Nasdaq trading desks joined, as well as Steve Wunsch, founder of the Arizona Stock Exchange, an early call market. The discussion was ultimately inconclusive and exposed the wide gap between theory and practice. But everyone came away a bit smarter. I’ll never forget Bob explaining to the group that it was “well-known” that market orders are simply limit orders to buy at infinity or sell at zero. I’m not sure what the Wall Street folks thought, but the elegance and importance of theory in market design made a deep impression on me.
In addition to Bob and Baruch’s Center for Trading and Financial Markets Research, another academic setting with profound influence on industry was built by Hans Stoll. Hans taught at Vanderbilt University and was the first to formulate options put-call parity.1In 1987, he started the Financial Market Research Center, which held an annual conference for many years. Bill Christie and Paul Schultz sparked controversy, and then fundamental reform, in the Nasdaq marketplace by presenting research on quoting behavior at Hans’ conference in 1995. As with Baruch, Vanderbilt’s conference was a valued forum for industry and academia to discuss and debate important and timely market issues. Unfortunately, Dean, Steve, and Hans are no longer with us. But programs like today’s conference keep their influence and spirit alive and meaningful.
Policy makers also benefit from the results of rigorous engagement between academics and practitioners. Commissioner Michael Piwowar served our agency from August 2013 to July 2018, including a stint as Acting Chairman. He is one of three Commissioners in our history to be a Ph.D. economist. On the role of economists and lawyers at the SEC, he noted:
“Good law and good economics are twin pillars of a healthy society. Both tend to promote efficient outcomes. Both modes of analysis are at their best when they hew closely to evidence and faithfully employ deductive logic. And straying from these principles leads to bad economics and bad law, with negative consequences for society. Economists and lawyers are fellow travelers on the road to a freer, more prosperous world.”2
A friend tells me that Brian Armstrong, Founder and CEO of Coinbase, is fond of saying that “action produces information.” By that axiom, the dynamic pace of change of today’s markets makes the environment for novel research incredibly fertile. Trading is going 24x7. New vehicles to gain exposures, such as tokenized securities and perpetual futures, are coming to market. The upcoming implementation of central clearing in the treasury market will introduce competition. Proposals to reform core aspects of the National Market System are under consideration. Retail investors and passive managers play outsized roles relative to historical norms.
Paired with this abundance of challenging problems is a ubiquity of data. Historically, access to differentiated data was the primary constraint to original research. Now, the substantial resources needed to handle ever-growing datasets may be the bigger lift. Researchers increasingly turn to tools driven by super intelligence to answer questions.
And while our Division adds to the growing pile of interesting questions, my friend and colleague Josh White, SEC Chief Economist and Director of the Division of Economic and Risk Analysis, or “DERA,” is in the business of finding answers. In addition to spearheading the Commission’s efforts to make good use of super intelligence, Josh is reinvigorating our engagement with the academic community. In particular, he has recently restarted DERA’s Distinguished Visiting Scholars Program. I know he would welcome outreach from this community.
Thank you for your time and attention. I hope you enjoy today’s program – and find as much value from engagement with Bob and his colleagues as I have over these many years. I look forward to your questions.
- 1Stoll, Hans R., “The Relationship Between Put and Call Option Prices,” The Journal of Finance, vol. 24(5), pages 801-824, December 1969.
- 2SEC.gov | Reflections of an Economist Commissioner.
Last Reviewed or Updated: Nov. 13, 2026