Senate subcommittee gives SEC full funding request

Action contrasts with House panel vote last week, which gave agency $300 million less

Jun 24, 2014 @ 2:38 pm

By Mark Schoeff Jr.

securities and exchange commission, budget, congress, senate, house, advisers, exams
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A Senate subcommittee approved the Securities and Exchange Commission's full budget request on Tuesday, citing in part the agency's need to examine more investment advisers.

In a voice vote, the Senate Appropriations Subcommittee on Financial Services and General Government reported a bill that would give the SEC a $350-million budget increase for fiscal 2015. The agency's overall spending would rise to $1.7 billion from its current level of about $1.32 billion.

The SEC provision is part of a $22.7-billion bill that also funds the Department of Treasury, the Internal Revenue Service, more than two dozen other federal agencies and the federal judicial system.

The bill sharply contrasts with legislation approved by a Republican-led House Appropriations subcommittee last week that gives the SEC only a $50-million budget increase. That bill is expected to be voted on by the full House Appropriations Committee later this week.

Republicans on the Senate subcommittee objected to the bill and were officially recorded as “no' votes.

Sen. Richard Shelby, R-Ala., and ranking member of the full Senate Appropriations Committee, expressed concern about funding in the bill that would implement the Dodd-Frank financial reform law. He also said that it failed to address “serious management lapses at agencies.”

Republicans will try to change the bill in the full appropriations committee, if they are given a chance under the rules for the committee vote, Mr. Shelby said.

“It seems to me this bill is ripe for amendments,” Mr. Shelby said.

Overcoming Senate Republican resistance is just part of the challenge for Senate Democrats. In recent years, the final SEC budget approved by Congress hewed to the Republican-majority House funding levels rather than the more generous levels approved by the Democratic-majority Senate.

The Senate measure addresses several subcommittee priorities, such as “protecting investors by overseeing the inspections of securities firms, brokers, investment advisers and rating agencies,” Sen. Tom Udall, D-N.M., chairman of the subcommittee, said during a panel meeting.

“The SEC has been engaged in the development of critical new rules to better protect investors and hold Wall Street accountable for its actions,” he added.

The agency has told Congress that its funding request would allow it to hire 240 new investment-adviser examiners and step up oversight of the sector. The SEC currently examines annually about 9% of the approximately 11,000 registered investment advisers.

For now, Mr. Udall is hopeful.

“This is the first step for funding [the SEC] well,” he told reporters.

A bill written by Rep. Maxine Waters, D-Calif., and ranking member of the House Financial Services Committee, that would allow the SEC to charge advisers user fees to increase adviser examinations has gained little support. A companion bill in the Senate has not been introduced.

The SEC's budget is funded by fees it collects from securities transactions, but Congress sets the agency's overall spending level.

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