Obama seeks 12% budget increase for SEC

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President Barack Obama is seeking a 12% budget increase for the Securities and Exchange Commission. 

The request to Congress includes nearly $1.3 billion for the SEC in the budget year starting October 1, 2010.    This proposal would allow for 390 hires, which would increase total staff to 4,190 from the current 3,800 at the traditionally low-profile agency, which was heavily criticized in the aftermath of the Madoff’s Ponzi scheme.   This proposal would also include $419 million for more than 100 new enforcement staff to work on the agency’s growing cases on fraud and market manipulation.

With the hires, the SEC estimates it could start 75 additional inquiries, conduct 314 additional formal investigations, file charges in 70 additional civil or administrative cases and conduct 50 additional exams of investment advisors, 25 additional mutual fund exams and 75 examinations of newly registered fund advisors. 

Of the roughly $1.3 billion requested for the SEC, $24 million is tied to the enactment by Congress of a sweeping overhaul of financial regulation. The overhaul would give the SEC new oversight of hedge funds and derivatives, the complex instruments widely blamed for hastening the crisis in the fall of 2008.

The SEC derives its funding from fees that companies pay to register new stock – an estimated $1.7 billion in the 2011 budget year – but the agency is subject to the congressional budget process in the same way as other federal departments.

The 12 percent budget increase for the SEC is significant because the administration’s record $3.83 trillion budget proposes spending cuts in some programs outside of defense and homeland security in order to keep overall non-defense spending frozen for three years. 

It was the first budget proposed for the agency under SEC Chairman Mary Schapiro, who led the agency through its most expansive restructuring in at least 30 years.   “If enacted, the president’s request will do a great deal to help the SEC keep pace with the continuing growth of the markets and provide necessary resources to support important regulatory initiatives in 2011”  Schapiro noted.

Anna Timone (195 Posts)

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