Chance of sizable SEC budget boost gets dimmer

JUL 14, 2013
House lawmakers are poised to deny the Securities and Exchange Commission the budget increase the agency says is required to strengthen oversight of investment advisers. The House Appropriations Committee released on Tuesday its financial services budget proposal, which authorizes $1.371 billion in SEC spending. That's $303 million less than the $1.674 billion SEC budget request but $50 million more than the SEC's current $1.321 billion budget. In congressional testimony during her first three months in office, SEC Chairman Mary Jo White asserted that a substantial budget boost would allow the agency to put more muscle into adviser regulation. She said the agency currently examines annually about 8% of the nearly 10,000 registered advisers -- and 40% of them have never been examined. “Therefore, under the [fiscal year] 2014 request, one of the SEC's top priorities is to hire 250 additional examiners to increase the proportion of advisers examined each year, the rate of first-time examinations, and the examination coverage of investment advisers and newly registered private fund advisers,” Ms. White told the House Appropriations Subcommittee on Financial Services and General Government at a May 7 hearing. So far, it looks as if Ms. White's request has fallen on deaf ears. The House Appropriations subcommittee is scheduled to vote on the SEC's budget – and those of other agencies under its jurisdiction – on Wednesday. Passage by the panel and the full appropriations committee is certain. The bill would then move to the House floor for likely approval by the chamber, which is controlled by Republicans. The Senate Appropriations Committee, led by Democrats, is consistently more generous with the SEC budget. Over the last couple years, the House and Senate could not agree on a final federal budget and instead passed so-called continuing resolutions that kept agency funding flat – a scenario that could be repeated at the end of the federal fiscal year in late September. The House financial services appropriations bill totals $17 billion, or $4.3 billion below fiscal year 2013 levels and $3 billion less than current funding after sequestration cuts. The House's SEC allocation, although $50 million above current funding levels, effectively denies the agency more spending authority because it also prevents the SEC from utilizing money from its so-called reserve fund. The Dodd-Frank financial reform law allowed the agency to spend up to $50 million annually from that pot of money. The House budget bill also compels the SEC to spend at least $50 million on technology upgrades and to allocate at least $44.4 million to the Division of Economic and Risk Analysis. The SEC's total spending has no impact on the federal budget deficit because it is offset by fees the agency collects on securities transactions.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave