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Corporate & Securities Law

: Jim Hamilton's World of Securities Regulation

SEC and CFTC Receive Funding Increase in House Resolution to Help Them Carry Out Dodd-Frank Mandates

By Jim Hamilton

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A continuing resolution passed by the House to fund the government in FY 2011 provides a boost in SEC and CFTC funding so that the agencies can carry out the mandates of the Dodd-Frank Act. The Senate has yet to act on the continuing resolution. The House Appropriations Committee says that the SEC and CFTC will be provided with the resources necessary to combat the financial fraud and excessive risk-taking that provoked the 2008 financial crisis. The CR also adjusts funding to allow the Internal Revenue Service to go after offshore tax evasion.

The SEC would be funded at $1,250 billion under the House CR. The President had requested a total of $1.258 billion for the SEC in FY 2011, a 12 percent increase over the FY 2010 funding level. In testimony earlier this year before the Senate Appropriations Committee, SEC Chair Mary Schapiro said that, if enacted, this request would permit the Commission to hire an additional 374 professionals, a 10 percent increase over FY 2010. That would bring the total number of staff to about 4,200.

In the Enforcement Division, the budget request would enable the SEC to add about 130 new full time employees so it can reinforce its investigations process, support more cases, and strengthen the intelligence analysis function. Similarly, in the Examinations unit, the budget request would allow the SEC to add about 70 staff to help begin closing the gap between the number of examiners and the growing number of registered firms the Commission must oversee. The request also will permit the SEC to continue expanding its investments in surveillance, risk analysis, and other technology, as well as in better training for SEC staff. The SEC Chair noted that the proposed increase in spending would be fully offset by the fees the Commission collects on transactions and registrations. In FY 2011, the SEC estimates that it will collect $1.7 billion, an increase of $220 million over FY 2010.

The President had requested $261 million for the CFTC in his fiscal year 2011 budget, this included $216 million and 745 full-time employees for pre?Dodd-Frank authorities and $45 million to provide half of the staff estimated at that time needed to implement Dodd-Frank. The House matched the President?s request with a $261 million appropriation for the CFTC.
At recent hearings, CFTC Chair Gary Gensler told the Senate Banking Committee that the CFTC requires additional resources to enhance its surveillance program, prevent market disruptions, and implement the Dodd-Frank Act. He said that the CFTC will require approximately 400 additional staff over the level needed to fulfill its pre-Dodd-Frank mission.

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Full post as published by Jim Hamilton's World of Securities Regulation on December 09, 2010 (boomark / email).