SEC gets a boost in Obama budget
The federal budget proposed by President Barack Obama last week would increase Securities and Exchange Commission funding by…
The federal budget proposed by President Barack Obama last week would increase Securities and Exchange Commission funding by more than $250 million and allow it to hire hundreds of additional examiners to increase investment adviser oversight.
Under the proposal, the SEC’s budget would rise to $1.67 billion, from $1.42 billion. The SEC wants to use part of the money to beef up adviser exams.
In its budget request document, the SEC said it examined only about 8% of 11,000 registered advisers in fiscal 2012 and that 40% of advisers have never been examined.
The SEC said it wants to increase its examination rate to 45% to 55% annually, about the same rate as the approximately 4,600 broker-dealers examined each year by the Financial Industry Regulatory Authority Inc.
‘ADDITIONAL EXAMINERS’
“Therefore, under the fiscal year 2014 request, one of the SEC’s top priorities is to hire 250 additional examiners to increase the percentage of advisers examined each year, the rate of first-time examinations and the examination coverage of investment advisers and newly registered private fund advisers,” the SEC budget request states.
Overall, the $1.67 billion appropriation would allow the SEC to hire 676 additional staff members.
Part of the increased adviser oversight will center on private-equity and hedge funds. Private funds with more than $150 million in assets under management must register with the SEC per a mandate in the Dodd-Frank financial reform law.
“The SEC will increase the number of examination staff focused on the approximately 700 private-funds advisers managing thousands of pooled-investment vehicles who will register with the commission as a result of the act,” the White House budget document states.
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