Senate Appropriations Bill Would Keep SEC Funding at 2015 Level

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WASHINGTON - The Senate Appropriations Committee approved a bill Thursday that would provide $1.5 billion of funding for the Securities and Exchange Commission in fiscal year 2016, the same amount as the fiscal 2015 enacted level and $222 million less than the commission requested earlier this year.

"The bill targets funding toward critical information technology initiatives and includes increased transparency and reporting requirements on agency spending," the committee summary on the bill said about the portion related to the SEC.

The committee approved the financial services and general government appropriations bill by a vote of 16 to 14. The bill will now move to the Senate floor, though a date has not been set, according to an aide for committee chairman Thad Cochran, R-Miss.

"We believe the FY - 2016 proposed funding level reflects positively toward the personnel, professionalism, and production of the commission," National Association of Municipal Advisors president Terri Heaton said in a statement.

Bond Dealers of America general counsel and managing director of federal regulatory policy Jessica Giroux said BDA understands the "fiscal constraints at play as Congress sets its budget allocations for federal agencies." She added that the organization is "hopeful" that under the constraints of the committee's bill the SEC "will continue to rely on industry groups such as the BDA for insight and input as it assesses and sets goals for itself and the municipal bond market generally."

In its report on the bill, the Senate committee listed specific areas of focus it would like to see the SEC tackle in the upcoming year.

The commission is funded with money that can roll over into the next year if it is left unused. In fiscal 2014, $74 million was carried over. The committee said it was concerned about the lack of transparency the SEC showed in reporting its projected unobligated funds. It used the approved bill to include a requirement that the commission provide quarterly updates on current and future unobligated balances.

Other requirements in the approved bill include "a detailed spending plan for the allocation of appropriated funds" to be submitted within 30 days of the bill's enactment, a request for the SEC to set expectations for organizations to "manage cyber threats and mitigate the effects of cybersecurity incidents" as well as for the commission to curb its "unsustainable and unsupported" hiring rate.

"The committee will continue to closely monitor the agency's hiring rate, target FTE level, and unobligated balances to ensure it is appropriately and effectively utilizing available resources" the report said.

Republicans and Democrats on the committee were split over the bill. Cochran said the legislation "makes responsible choices to help insure that federal actions are helpful and not burdensome" but the committee's top Democrat, Barbara Mikulski of Maryland, said the "freeze" on SEC funding could limit "the ability of the SEC to administer and enforce federal securities laws that protect investors; maintain fair, honest and efficient markets; and promote capital formation."

The committee's financial services bill in its entirety is $1.1 billion below the fiscal 2015 financial services bill enacted level and almost $4 billion below the president's requested level for fiscal 2016, which begins Oct. 1.

 

 

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