SEC chairman pitches budget boost to Congress

WASHINGTON Tue Mar 6, 2012 10:16am EST

Mary Schapiro, Chairman of the Securities and Exchange Commission, testifies before the Senate Agriculture, Nutrition and Forestry hearing on Continuing Oversight of the Wall Street Reform and Consumer Protection Act on Capitol Hill in Washington, December 1, 2011. REUTERS/Yuri Gripas

Mary Schapiro, Chairman of the Securities and Exchange Commission, testifies before the Senate Agriculture, Nutrition and Forestry hearing on Continuing Oversight of the Wall Street Reform and Consumer Protection Act on Capitol Hill in Washington, December 1, 2011.

Credit: Reuters/Yuri Gripas

WASHINGTON (Reuters) - The chairman of the U.S. Securities and Exchange Commission asked Congress for a big budget hike on Tuesday, pledging to use the extra funds to improve outdated technologies and hire more examiners, economists and other market experts.

"The rapidly expanding size and complexity of the markets presents enormous oversight challenges," SEC Chairman Mary Schapiro said in prepared testimony before the House appropriations panel that oversees the agency's budget.

"In FY 2013, the SEC will need to hire specialists in a number of areas to strengthen our oversight of the markets, protect against known risks, and best enable our markets to facilitate economic growth."

For fiscal 2013, which starts in October of this year, the SEC is requesting an 18.5 percent boost from its current fiscal 2012 budget of $1.32 billion.

The SEC's ability to convince lawmakers to agree to such a large funding increase remains in doubt.

Although the SEC's budget is deficit-neutral and offset by fees imposed on the industry, many of the Republicans who control the House have been reluctant to support raising the agency's funding amid concerns over the implementation of the 2010 Dodd-Frank financial reform law.

The SEC has faced criticism in the past over whether it is accurately judging any potential economic harm that may come from its rules, an area that some lawmakers have focused on in their efforts to slow down Dodd-Frank.

Last year, a federal appeals court overturned a Dodd-Frank rule that would have made it easier for shareholders to nominate directors to corporate boards. In its ruling, a three-judge panel sided with the business groups challenging the rule and said the SEC had failed to properly weigh the rule's economic impact.

In an effort to convince lawmakers to boost the SEC's funding, Schapiro pledged on Tuesday to use some of the extra money toward bringing more economists on board.

"As the commission undertakes additional rulemaking and evaluates existing rules, continued access to robust, data-driven economic analyses is necessary to develop efficient rules and evaluate the effectiveness of our existing regulations," she said.

She also said more experts would be needed to carry out new responsibilities under the Dodd-Frank law, particularly in the area of over-the-counter derivatives.

"New staff also will be needed to help conduct risk-based supervision of registered security-based swap dealers and participants, including by using newly available data to identify excessive risks or other threats to security-based swap markets and investors," she added.

(Editing by Lisa Von Ahn)

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