Extra bucks will go to bolster enforcement unit

The U.S. Securities and Exchange Commission is using a $74 million funding boost stemming from a congressional budget compromise to hire derivatives specialists, boost oversight of credit-rating and catch up on Dodd-Frank Act requirements, SEC Chairman Mary Schapiro told lawmakers. The money will partially address the agency's “capacity gap” by allowing hiring in its enforcement, inspections and trading and markets units, Schapiro said today in testimony prepared for a Senate Appropriations subcommittee hearing on fiscal year 2012 budgets for the SEC and the Commodity Futures Trading Commission. The two agencies -- which had been operating under their fiscal 2010 budget limits during a congressional stalemate over spending for the current fiscal year -- got additional funding under a compromise plan approved last month. Schapiro and CFTC Chairman Gary Gensler had said the impasse threatened to derail efforts to carry out new responsibilities imposed by Dodd-Frank. At today's hearing, Schapiro and Gensler will urge senators to approve President Barack Obama's 2012 budget requests of $1.4 billion for the SEC and $308 million for the CFTC. Gensler, in his prepared remarks, said the money could be used to hire additional employees to oversee an estimated 300 futures brokers and swap dealers, 20 clearinghouses and as many as 40 so-called swap execution facilities required by Dodd- Frank, the regulatory overhaul enacted last year. “It is essential that the CFTC have additional resources to reduce risk and promote transparency in the swaps markets,” Gensler said in his testimony. The CFTC got an additional $34 million for its current budget under last month's congressional compromise. Gensler said that money will let the agency “grow modestly to approximately 720 employees.” Schapiro said she will spend some of the $74 million her agency received to make investments in computer technology. --Bloomberg News--