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SEC's White Testifies Current Budget 'Not Sufficient,' Seeks 26% Increase

Bruce Carton | May 8, 2013

Yesterday, in her first testimony before Congress as SEC chairman, Mary Jo White made her case for why the SEC's budget should be increased to $1.674 billion in fiscal year 2014. The $1.674 billion budget request was proposed by President Obama last month, and reflects a more than 26 percent increase over the SEC's FY 2013 budget of $1.321 billion.

Like former SEC Chairman Mary Schapiro before her, White told Congress that the requested funds were necessary for the agency to do its job properly. White testified that "the current level of resources is not sufficient to permit the SEC to examine regulated entities and enforce compliance with the securities laws in a way that investors deserve and expect."

White stated that the requested funds would allow the SEC to address its "key priorities," which include:

  • the rulemaking mandates contained in the Dodd-Frank Act and JOBS Act.  White noted that certain Dodd-Frank rules and studies still need to be completed, and that the JOBS Act requires significant Commission rulemaking which has not yet been completed;
  • strengthening the core enforcement and examination functions of the SEC.  White stated that the agency's current level of resources in this area is insufficient; and 
  • investments in "much needed technology and expertise" to allow the agency to keep pace with the markets and permit it to "see around corners and anticipate issues that may arise."

Specifically, White testified, the requested budget for FY 2014 would permit the SEC to add approximately 676 new staff positions and provide additional funding for the following key areas:

  • expanding oversight of investment advisers and improving their regulation and compliance; 
  • bolstering enforcement; 
  • economic and risk analysis to support rulemaking and oversight; 
  • building oversight of derivatives and clearing agencies; 
  • enhancing reviews of corporate disclosures; 
  • leveraging technology; and  
  • enhancing training and development of SEC staff

With respect to bolstering enforcement, White said the agency's budget request would help it further refine its analysis of tips and leverage incoming data, and engage additional industry experts and proactive data analytics to better target industry practices that may harm investors.  She estimated that the funds would allow the Division of Enforcement to hire 131 staff members.