WASHINGTON — The Securities and Exchange Commission's Office of Municipal Securities will spend the coming months implementing the final municipal advisor rule and reviewing MA rule filings by the Municipal Securities Rulemaking Board, but the commission needs more resources to meet its expanded responsibilities under the Dodd-Frank Act, SEC chairman Mary Jo White told a Senate panel Thursday.
White appeared before the Senate Committee on Banking, Housing, and Urban Affairs along with other federal regulators to provide an update on her agency's progress in meeting its federal mandates on financial oversight, including the Dodd-Frank Act's requirement that the SEC establish an independent muni office reporting directly to the chairman and provide regulatory oversight of municipal advisors.
The SEC approved its muni rule last year and it becomes effective July 1 with a phased in compliance period for registration for using the final forms from that day through Oct. 31. In addition to providing interpretive guidance on the rule and working with the MSRB on its proposals, the muni office will also stay abreast of hot topics in the market, she testified.
"OMS also continues to monitor current issues in the municipal securities market (such as pension disclosure, accounting, and municipal bankruptcy issues) and to assist in considering further recommendations to the commission with respect to disclosure, market structure, and price transparency in the municipal securities markets," White said in written testimony.
But the SEC will be challenged to succeed if it does not get additional funding, she warned.
"Since fiscal 2012, the SEC has not received a significant increase in resources to permit the agency to bring on the additional staff needed to adequately carry out our mission," White testified. These new responsibilities cannot be handled appropriately with the agency's existing resource levels without undermining the agency's other core duties, particularly as we turn from rule writing to implementation and enforcement of those rules. Additional resources will be vital. We need additional staff experts to focus on enforcement, examinations, and regulatory oversight."
The SEC is to receive $1.35 billion under Congress' 2014 omnibus spending agreement, which is $324 million below President Obama's budget request.
White also said the SEC and bank regulators have formed an interagency working group that is meeting regularly to discuss implementation and coordination of compliance and enforcement of the Volcker Rule.
