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Committee Examines SEC Agenda and Budget


Washington, Nov 18 -

The Financial Services Committee held a hearing today to conduct oversight of the Securities and Exchange Commission (SEC) with SEC Chair Mary Jo White.

Committee members discussed the SEC’s budget, which has increased by 64 percent since Fiscal Year 2005, as well as capital formation for small and medium-sized businesses. Although promoting capital formation is a specific mandate in the SEC’s mission, it often receives a low priority from the SEC. Small and medium-sized companies are at the forefront of technological innovation and job creation, but they often face significant regulatory obstacles in accessing capital markets.

Members also asked Chair white about the proposed “fiduciary rule” from the Department of Labor that will make retirement advice unavailable or unaffordable for low and moderate income Americans. The SEC is the agency with the expertise to regulate the conduct of persons providing investment advice and effecting securities transactions, not the Department of Labor. The Department of Labor should not act to define how an investor receives financial advice.

“This Committee is committed to conducting vigorous oversight of the SEC because the SEC’s three-part mission is an important one as Americans continue to struggle through an economy that is under-performing. It is on their behalf that this Committee acts to ensure the SEC protects investors, maintains fair, orderly and efficient markets, and promotes capital formation – key ingredients in growing a healthy economy with more opportunity for all,” said Chairman Jeb Hensarling (R-TX) during his opening statement.

Key Takeaways:
  • The SEC continues to squander its resources on rulemakings that harm U.S. companies and investors rather than prioritize activities that fulfill the agency’s statutory mission to protect investors; ensure fair, orderly, and efficient markets; and facilitate capital formation. The SEC delayed completion of rules under the JOBS Act and instead expended resources on extraneous and sometimes highly politicized regulatory undertakings outside its mission and core competencies.
  • The SEC must reassert itself as the primary regulator of U.S. capital markets to fulfill its statutory mission and counterbalance harmful interventions by the Federal Reserve, the Financial Stability Oversight Council and the Department of Labor.
  • Congress has provided the SEC with ample resources to fulfill its statutory mission. The SEC’s current Fiscal Year 2016 budget of $1.5 billion represents an increase of almost 35 percent since the passage of the Dodd-Frank Act in 2010, and is 68 percent higher than a decade ago. Since 2000, the SEC’s budget has increased by almost 300 percent.