SEC Seeks Budget Boost to Restore Staff

The Securities and Exchange Commission on Monday requested a $1.66 billion budget for fiscal year 2019, a 3.5% increase over the agency’s 2018 request, which would allow the securities regulator to restore 100 positions lost during the 2017 hiring freeze.

The agency’s annual appropriations has remained essentially flat from 2016 to 2018, at $1.6 billion. However, during the same period, securities trading has grown by more than $3 trillion, assets under management by investment advisors has jumped more than $5 trillion, and there’s been a 17% growth in ETFs and mutual funds.

The securities regulator has not yet received its 2018 appropriations.

SEC Chairman Jay Clayton said the FY 2019 budget request “reflects our top priorities of protecting investors and making sure we continue to have the most vibrant and well-functioning capital markets in the world, With the exceptional work and commitment of dedicated staff, the SEC will continue striving to maintain and expand an environment conducive to capital formation while ensuring investor protection.”

The SEC’s FY 2019 budget request would support 4,628 positions.

The agency expects to end 2018 with 4,528 positions. To stay within the SEC budget level of $1.6 billion, the agency imposed a hiring freeze at the beginning of FY 2017 that will continue throughout FY 2018.

Because the SEC permits “few exceptions to the hiring freeze,” the overall staffing level is declining and is expected to drop to 4,528 positions by the end of FY 2018.

The FY 2019 budget request boost would support the hiring of four additional staff positions to expand the agency’s cybersecurity protections, particularly with regard to incident management and response, advanced threat intelligence monitoring, and enhanced database and system security.

The added positions would be information system security officers who can focus on the security of specific systems or programs.

In 2018, the SEC plans to set up a new chief risk officer position to oversee the agency’s enterprise risk program.

The FY 2019 request, according to the agency, would permit it to hire two additional staff positions under the chief risk officer to strengthen and advance the agency’s risk management capabilities.

The agency would also use $45 million of the FY 2019 funds for IT enhancements, and $37 million would be used for a potential relocation of the agency’s New York office.

Forty-one positions would also be restored in the agency’s enforcement division as well as its Office of Compliance Inspections and Examinations.

OCIE has requested to add 24 individuals, of which 13 would be dedicated to investment advisor and investment company exams.

The FY 2019 request would restore 17 positions to enforcement to support key enforcement priorities and provide resources to support and expand the work of two newly created groups–The Cyber Unit and the Retail Strategy Task Force.

Seven staff positions would also be restored under the FY 2019 budget request within the Division of Investment Management.