Mary Schapiro, chairman of the Securities and Exchange Commission, told a congressional appropriations panel on Tuesday that the Obama administration’s proposal to increase the SEC’s budget in 2013 to $1.566 billion, which is an 18.5% increase over the SEC’s 2012 appropriation, would help the agency add 676 staff positions–including 191 positions to the SEC’s enforcement division and 222 to the agency’s exam division–as well as revamp the agency’s outdated EDGAR system.
Schapiro told members of the House Subcommittee Financial Services and General Government Committee on Appropriations that the added resources requested for FY 2013 would allow the SEC to achieve four “high-priority” initiatives: (1) adequately staff mission-essential activities to protect investors; (2) prevent regulatory bottlenecks as new oversight regimes become operational and existing ones are streamlined; (3) strengthen oversight of market stability; and (4) expand the agency’s information technology systems to better fulfill our mission.
Rep. Jo Ann Emerson, R-Mo., chairman of the subcommittee, asked Schapiro why the agency needs a spending increase of $245 million over 2012’s level when the agency’s budget in 2011 also saw a $200 million increase over the previous year. “Most agencies haven’t received increases like the SEC,” Emerson said. “How have investors benefited from such large increases?” she asked Schapiro.
Schapiro replied that the agency recognizes “we are close to unique compared to other federal agencies” in its increased budget levels, but the SEC “was underfunded for years,” and the agency needs a boost in funds to deal with complex markets and financial transactions. Since the Bernard Madoff Ponzi scheme, “we have successfully restructured the enforcement program to focus on risky practices” and the agency’s exam program is now using a more risk based approach.
A central focus for the SEC in updating its outmoded technology, Schapiro said, would be to improve its EDGAR system of public company filings, which was last modernized in 2001. By modernizing it, the SEC could “decrease the cost of operating and maintaining that system dramatically,” Schapiro said.