SEC Chair Gensler Makes the Case for Significant Budget Increases

SEC Chair Gary Gensler testified before the House Appropriations Subcommittee on Financial Services in support of a 2024 budget request of $2.436 billion for the agency.

In his testimony, Mr. Gensler argued the following:

• Division of Enforcement. While the SEC received more than double the number of complaints and referrals from whistleblowers in FY 2022, Mr. Gensler said that the Division of Enforcement shrank in size by five percent. He stated that the Division also requires new tools and resources to address misconduct in new and emerging areas, such as crypto assets. He asserted that the budget request would grow the Division four percent from its FY 2016 size.
• Division of Examinations. Mr. Gensler stated that the new budget request would aid the Division of Examinations as the “first line of defense” for the investing public, in addressing emerging risks posed by crypto markets and cybersecurity, ensuring market resiliency. The budget would allow the SEC to add 198 full-time equivalents ("FTEs").
• Division of Corporation Finance. While the number of reporting companies the Division of Corporation Finance oversees has increased by 18 percent over the last three years, Mr. Gensler stated that staff is 17 percent smaller than what it was in FY 2016. The FY 2024 budget would allow the Division add 454 FTEs.
• Division of Investment Management. Mr. Gensler asserted that the assets managed just by private funds has surpassed the size of the entire U.S. Commercial banking industry. Due to the growth in these markets, Mr. Gensler said that the FY 2024 budget would allow the Division of Investment Management to add 238 FTEs.
• Division of Trading and Markets. Mr. Gensler said that in response to the increasing number of market transactions and volume of trade, the FY 2024 budget would be used to grow the Division by 309 FTEs.
• Division of Economic and Risk Analysis. Mr. Gensler underscored the importance of the work done by the Division of Economic and Risk Analysis, ranging from determining ill-gotten gains for enforcement actions to providing economic analyses in rulemaking releases. To help the Division continue its work, Mr. Gensler said the FY 2024 budget would be used to add 198 FTEs in this capacity.

Mr. Gensler said the SEC is also requesting $393 million to support its data analysis and cybersecurity needs. Mr. Gensler noted that this would assume the full deployment of an additional $50 million from the SEC Reserve Fund for ongoing IT projects and programs. Mr. Gensler argued that this amount of spending is “dwarfed by what some of the biggest market participants spend in a month on technology.”