SEC Would Add 83 Examiners With Budget Boost

The Securities and Exchange Commission would use its 2024 budget boost in a Senate appropriations bill to add 83 additional full-time examiners, SEC Chairman Gary Gensler told senators Wednesday.

The Appropriations Committee appropriated $2.4 billion to the SEC, $194 million more than the fiscal year 2023 enacted level and close to $73 million less than the budget request. That cut back on the agency’s ability to add about 170 additional positions, Gensler said.

The agency’s fiscal 2024 request would help the SEC Examinations Division grow to 1,144 full-time examiners, “allowing it to keep pace with the market challenges of the last decade,” Gensler told the senators during a Senate Appropriations Financial Services and General Government hearing, held Wednesday.

“The majority of this increase relates to full-year funding for those staff positions authorized and hired in FY 2023,” Gensler told the senators.

The “SEC is 3% larger than it was in 2017,” he said.

Meanwhile, from 2017 through 2022, “the number of clients of registered investment advisers grew nearly 70% from 34 million to 57 million,” he said. “During that same period, average daily trading in the equity markets more than doubled from more than 30 million transactions to more than 77 million.”

He pointed out that “such growth and rapid change also mean more possibility for wrongdoing. As the cop on the beat, we must be able to meet the match of bad actors. Thus, it makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets.”

Chart of SEC full-time employees. Source: SEC

In FY 2022, the SEC conducted more than 3,000 exams across the agency’s “tens of thousands of registrants, from investment advisers to broker-dealers to exchanges,” Gensler said.

Advisor numbers, he reiterated, have grown significantly in the last five years, with RIAs growing by 20% — to about 15,000, up from approximately 12,500 in 2017, Gensler reported.

Real Estate Footprint

Gensler told the lawmakers that another “important part” of the budget is for offices and leases.

The agency has offices in Washington, D.C., and 11 other regional offices across the country, with the total cost in fiscal 2023 being 5% of the agency’s budget.

The SEC, Gensler said, is preparing to vacate one of its three headquarters buildings in Washington by the end of this fiscal year, “resulting in a reduction of 210,000 square feet of space and approximately $14 million per year in savings.”

The agency has also secured a new lease to move the SEC headquarters in Washington to another building, Gensler said, and to shed “another 30,000 rentable square feet in our San Francisco and Fort Worth regional offices.”

Further, Gensler said, the separate fiscal 2024 request of $39.6 million “would support [General Service Administration's] GSA’s work on buildout and move-related costs for this effort and for the replacement lease for our Atlanta office. The SEC proposes to offset these costs with fee collections and return any unused amounts to fee payers or the Treasury after project completion.”