Increased funding for the Securities and Exchange Commission is likely on its way. After repeated pleas by SEC Chairman Mary Schapiro that the agency get a funding boost to handle the deluge of new responsibilities under Dodd-Frank, Republican lawmakers who’ve sought to curtail funding for the agency are changing their minds.
Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee, said during a hearing on Thursday to examine ways to reform the SEC, that “my personal view is that an increase in funding is necessary as part of the reform process.”
During her remarks at the hearing, which was called “Fixing the Watchdog: Legislative Proposals to Improve and Enhance the Securities and Exchange Commission,” Schapiro reiterated her stance that the SEC “cannot operationalize the Dodd-Frank rules without additional resources.”
Schapiro also said that even though the agency is looking for ways to be more efficient, as recommended by the Boston Consulting Group, because the SEC must now take on oversight of derivatives and hedge funds, “without additional resources even if [the agency] becomes more efficient, at the end of the day there is a gap.”
In July, Republican House appropriators approved a bill that would maintain the SEC’s current budget level of $1.185 billion. Schapiro said that appropriation would not be sufficient for the SEC to do its job. On Wednesday, the Senate Appropriations Committee, under the FY12 Financial Services & General Govt. Appropriations Bill, approved appropriations of $1.407 billion for the SEC, an increase of $222 million (19%) above the FY11 enacted level.
Schapiro also told members of the House Financial Services Committee that she has “significant concerns” about the two bills put forth by the two leading House Republicans on the committee regarding reforming the SEC, and that, in lieu of more funding for the agency, a self-regulatory organization (SRO) for advisors must be “very seriously” considered.
Besides delving into SEC reforms recommended by the Boston Consulting Group, the hearing focused on bills introduced by Rep. Scott Garrett, R-N.J., chairman of the House Financial Services Capital Markets Subcommittee, and full committee chairman Bachus.