SEC's Schapiro: Extra Funding Will Support New Staff, Oversight of Credit Ratings, Derivatives

Mary Schapiro, chairman of the Securities and Exchange Commission (SEC), told a Senate Appropriations Subcommittee on Wednesday that the agency would use the recent $74 million funding boost that it received under the FY2011 continuing resolution to fill vacancies “to meet key strategic needs, perform tasks required by the Dodd-Frank Act, and continue to improve agency operations.”

The funding boost, Schapiro told the Subcommittee on Financial Services and General Government, which is chaired by Sen. Dick Durbin, D-Ill., will allow the SEC to “address important staffing needs,” particularly within the Division of Trading and Markets, Division of Enforcement, and Office of Compliance Inspections and Examinations (OCIE). Schapiro said the agency will use the funds to revitalize “core programs such as enforcement and inspections activities, as well as addressing new responsibilities such as enhancing oversight of credit rating agencies and adding staff with expertise in critical areas such as derivatives.”

In the last five months of FY 2011, Schapiro said that the SEC will also use some of the additional funds to modernize and enhance the agency’s outdated technology. “We will be making key investments in general IT infrastructure modernization, including refreshing old technology and system hardware and software,” Schapiro said.

The SEC’s $1.41 billion funding request for FY 2012, an increase of $222 million over the new FY 2011 appropriation level, if enacted, would allow the SEC to add about 780 positions by the end of FY 2012, Schapiro said. Forty percent (or 312 positions) would be used to “strengthen and support core SEC operations,” while 60% (or 468 positions) would be used to implement the Dodd-Frank Act.