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Chairman Schapiro Explains How SEC Would Use $1.407 Billion Budget Requested for FY 2012

Bruce Carton | May 4, 2011

SEC Chair Mary Schapiro is testifying this morning before the U.S. Senate Appropriations Committee in support of the SEC's $1.407 billion budget request for fiscal year FY 2012. The SEC submitted the request in February, which seeks an increase of approximately $222 million beyond the $1.185 billion Congress recently agreed to allocate to the SEC for FY 2011.

In her prepared testimony, Schapiro pointed out that in Dodd-Frank, Congress has handed the SEC a host of new responsibilities on top of what was previously on its plate, including the tasks of promulgating more than 100 new rules, creating five new offices, and producing more than 20 studies and reports.  The law also assigns the SEC considerable new responsibilities that will increase its workload going forward, including oversight of the over-the-counter (OTC) derivatives market and hedge fund advisers, the creation of a new whistleblower program and much more.

Schapiro provided some specific details on what the agency would do with the $1.407 billion requested:

  • Add about 780 positions by the end of FY 2012 to improve base operations and implement the agency's new responsibilities. Schapiro stated that about 40% of the 780 new positions would strengthen and support core SEC operations, "including protecting investors, maintaining orderly and efficient markets, and facilitating capital formation." The remaining 60 percent of the new positions would be used to implement the Dodd-Frank Act.  
  • Schapiro estimated that the total FY 2012 costs to implement the Dodd-Frank Act through new positions and technology investments will be approximately $123 million. 
  • A $78 million investment in FY 2012 on information technology improvements.
  • Improvements to management infrastructure, including strengthening of the newly-established Office of the Chief Operating Officer and the operational risk management program, and the build-out of a data management program. 
  • Addressing material weaknesses in internal controls identified in a GAO audit by migrating the agency's financial system to the Department of Transportation.  Schapiro said that this will be a "significant undertaking."