House Appropriations Subcommittee Examines SEC FY 2017 Budget Request (with Delta Strategy Group Summary)
The House Appropriations Subcommittee on Financial Services and General Government examined the SEC's fiscal year 2017 budget request. The $1.781 billion request was an increase of $176 million, or 11%, over the budget for fiscal year 2016.
Those goals include:
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increasing the examination coverage of investment advisers and other key entities that interact with retail and institutional investors;
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leveraging cutting-edge technology;
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expanding and strengthening enforcement resources and capabilities;
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bolstering the SEC's economic and risk analysis functions; and
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hiring market experts and other experts in order to help fulfill the SEC's expanded rulemaking and oversight responsibilities.
In addition, Chair White described the "exponential" expansion of the size and complexity of entities regulated by the SEC:
From 2001 to 2015, assets under management of SEC-registered advisers more than tripled from approximately $21.5 trillion to approximately $66.8 trillion, and assets under management of mutual funds more than doubled from $7 trillion to over $15 trillion. Trading volume in the equity markets from 2001 through 2015 nearly tripled to over $70 trillion.
Chair White stressed that funding for the SEC is "deficit-neutral" and, therefore, would affect neither the deficit nor the available funding for other agencies.
House Subcommittee Chair Ander Crenshaw (R-FL) expressed support for the SEC funding of the Division of Economic and Research Analysis ("DERA"). Specifically, he supported the funding of DERA's growth, research on the macro and micro-economic effects of SEC rulemakings and other initiatives. However, he also voiced concern about (i) the transparency and flexibility of the designation process for systemically important financial institutions ("SIFIs"), and (ii) the cumulative effect of the Volker Rule, Basel III and other regulations on overall market liquidity. As a co-sponsor of the SEC Small Business Advocate Act (H.R. 3784), Representative Crenshaw called on the SEC to make small businesses and their capital formation top priorities.