President Donald Trump’s budget would eliminate the key fund that the Securities and Exchange Commission uses to beef up cybersecurity measures and deter fraud.
The SEC’s budget request of $1.602 billion for fiscal year 2018, which the agency submitted Tuesday, would support 4,543 positions for the year. The agency states that its request is “essentially flat compared to the FY 2017 level and contemplates continued access to the Commission’s Reserve Fund” to fund long-term capital investments in information technology.
The Trump administration’s budget seeks to abolish the Reserve Fund, which was created by the Dodd-Frank Act.
The SEC was given authority to establish a Reserve Fund with the Treasury Department and deposit into the fund up to $50 million annually from registration fees collected from SEC registrants, with a fund balance limit of $100 million. The fund is separate from the agency’s annual appropriation.
The administration states in its budget that doing away with the fund would reduce the deficit by $50 million a year.
The SEC’s budget does not affect the federal deficit since, under Dodd-Frank, it collects fees from self-regulatory organizations to offset its costs.
The SEC said Tuesday that the agency plans to continue upgrading its technology with the help of the SEC’s Reserve Fund, “which has been critically important in our efforts to keep pace with the rapid technology advancements occurring in our regulatory areas as well as meeting the challenges of cybersecurity.”
The agency also hopes to use money from reserve funds to expand “data analytic tools” to integrate and analyze the large and “ever-increasing” volumes of financial data the agency receives to help it “detect fraud or suspicious behavior earlier.”
Such funds would also be used to help the agency redesign the Electronic Data Gathering, Analysis and Retrieval (EDGAR) system, which is “an ongoing, multiyear effort to simplify the financial reporting process, promote automation, reduce filer burdens, and provide improved access to better data.”
— Check out Following WannaCry, SEC Issues Ransomware Alert on ThinkAdvisor.