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SEC Chair Makes Case for Larger SEC Budget

SEC Chair Mary Jo White recently testified before Congress in support of the $1.781 billion 2017 budget request for the SEC.  She stated that the amount “is necessary for the SEC to continue to fulfill its critical responsibilities to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.”  In her testimony, she outlined the entities that the SEC oversees – including 2,000 investment advisers, almost 11,000 mutual funds and exchange-traded funds, over 4,000 broker-dealers, and over 400 transfer agents.  White also cited the growth “in size and complexity” of the entities that the SEC regulates, noting, for example, that the assets under management for the mutual fund industry expanded from $7 trillion to $15 trillion between 2001 and 2015.  She also reminded the Sub-Committee that the SEC’s budget is revenue neutral and that any amount appropriated will be offset by “modest transaction fees.”

According to White, personnel and technology would receive significant boosts as a result of the budget increase.  The examinations and enforcement staff would receive a bulk of the new personnel, with 127 and 52, respectively.  However, she also noted that the budget accounted for an additional seven positions in the Division of Investment Management, primarily to “conduct ongoing data analysis, including new data that would be submitted to the SEC as part of the investment company reporting modernization initiative. In addition, they would monitor issues related to asset management risks (including those related to liquidity, derivatives, stress testing and transition planning rulemaking initiatives), provide interpretive advice, and respond to exemptive applications.”  The technology initiatives that she outlined included re-designing EDGAR to improve access to filings, improving information security, and expanding data analytics tools.