President Barack Obama’s last budget request to Congress, released Tuesday, is a $4.1 trillion plan for fiscal 2017 that would double funding for the Securities and Exchange Commission and the Commodity Futures Trading Commission by 2021, with the SEC getting an 11% increase to $1.8 billion in 2017.
The SEC would use the 11% increase above the enacted 2016 level to hire 250 additional staffers, including 127 new examination staffers, of which 102 would be added to examine investment advisors and investment companies.
(The CFTC would get a 32% increase to $330 million in 2017.)
The 102 additional IA/IC examiners would be in addition to the 100 examiners that the agency is looking to shift from broker-dealer exams to advisor exams. With the additional examiners, the SEC hopes to increase its advisor exam rate — which currently stands at 10% of advisors per year — to 12%.
The SEC hopes to bolster frequency of advisor exams closer to broker-dealer coverage, which is about 50% per year between SEC and the Financial Industry Regulatory Authority exams.
Third-party advisor exams, which the agency is expected to propose this spring, will complement SEC exams.
Other hires under the Obama budget would include 52 enforcement personnel to study emerging risks, 24 new positions to bolster market oversight, and 47 positions in the areas of information technology, general counsel and investor education.
Obama’s plan — which Republican chairmen of the Senate and House budget committees refused to hold hearings on, in a break with a decades-long tradition — also pushes for new retirement, tax, climate change and college planning initiatives, directs $19 billion toward cybersecurity-related improvements and also creates a Cybersecurity National Action Plan to advance near- and long-term protections.
Obama’s budget, for the fiscal year beginning Oct. 1, projects revenue to increase by $308 billion in 2017 and spending to increase by $196 billion. The plan seeks to raise $2.6 trillion over the next decade through tax law changes, which includes eliminating some benefits for high-income individuals.
In releasing the budget, Obama said that cybersecurity is one of the nation’s “most important national security challenges.” As the economy becomes “increasingly digital, more sensitive information is vulnerable to malicious cyber activity. This challenge requires bold, aggressive action.”