Federal securities and commodities regulators said on Wednesday they need big budget boosts to police the vast derivatives market and to catch the next Bernard Madoff. Fresh from getting modest budget increases for the current fiscal year, the Securities and Exchange Commission and Commodity Futures Trading Commission told a Senate appropriations panel they need hundreds of millions of dollars more to be effective post-financial crisis regulators.
Republicans seeking to weaken last year's Dodd-Frank financial oversight law, and rein in federal spending, are trying to block big funding increases. "We are all aware of our budget deficit and fiscal constraints that will require all agencies to make decisions for how to allocate resources," said Republican Senator Jerry Moran of Kansas. "Simply increasing (their budget) does not ensure the agency can successfully achieve its mission."
SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler said the funds are critical to finalise - and enforce - dozens of new rules required by Dodd-Frank as a July implementation deadline looms. In testimony, the regulators took great care to try to illustrate how they are working to save money and run more efficiently.
Schapiro said the agency is consolidating the functions of the Office of the Executive Director into the Office of the Chief Operating Officer. And in what she called a "quirky" example of cost-efficiency, she told lawmakers the SEC can save $375,000 a year on its alternative data center by making power changes. The agencies are jointly tasked with sweeping new responsibilities to police the nearly $600 trillion over-the-counter derivatives market. In addition, the SEC has also been given increased oversight in other areas including hedge funds and municipal advisers. The SEC is seeking a $222 million increase for its fiscal 2012 budget, beginning October 1, which would bring the total to $1.407 billion.
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