The Securities and Exchange Commission would receive $1.7 billion under President Barack Obama's fiscal 2015 budget plan, released Tuesday, a 26 percent increase over the 2014 enacted level of $1.35 billion.
The extra funds would be used to add 639 additional staffers; 316 would be added to the agency's Office of Compliance Inspections and Examinations, with 240 of those examiners devoted solely to overseeing advisors.
The 316 added staffers would boost the total number of SEC examiners to 1,283.
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In 2014, the SEC asked for funds to add 325 additional examiners, of which 250 would cover the advisory industry. While the 250 examiners were requested for FY 2014, the SEC lacked the funding to add them.
The enforcement division would get 126 new staff members, while 75 new staff members would be spread across the divisions of Corporation Finance, Investment Management and Trading and Markets.
The Division of Economic Risk and Analysis would get 14 new staff members.
Additional funds provided in the budget would also be used to boost investments in technology and enhance the agency's tips, complaints and referrals system.
The agency would also gauge whether to add new staff members to its new Office of Investor Advocate, which currently has five employees.
SEC Chairwoman Mary Jo White said in a Tuesday statement that she was "pleased that the President's FY 2015 Request recognizes the SEC's need for significant additional resources. The $1.7 billion requested will be critical for the SEC to fulfill its mission to investors and our markets. It is also important to remember that this funding comes from industry transaction fees and does not take money away from other priorities or contribute to the federal deficit."
The Obama administration requested $1.67 billion for the SEC in 2014, but Congress set the SEC's budget for the current fiscal year, which ends in September, at $1.35 billion.
However, Congress isn't likely to take action on any 2015 spending bills until after the midterm elections in November. This fact makes the president's budget "even more irrelevant than in most other years," says David Tittsworth, executive director of the Investment Adviser Association in Washington.
"Nonetheless, the president's budget reflects the administration's continuing support for Mary Jo White's priorities, which include hiring a lot of additional SEC examiners to inspect investment advisory firms," Tittsworth says.
The SEC announced in late February that it had started an exam sweep of about 4,000 never-examined advisors registered with the SEC for three or more years.
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
