Part of the US Securities and Exchange Commission’s (SEC) promised crackdown on compliance, investment entities, and other businesses will be integrated with the allotted budget for the SEC’s fiscal year for 2015. SEC Chair Mary Jo White just testified before a subcommittee of the House Committee on Appropriations to support President Obama’s budget request for fiscal 2015 for the regulatory body — part of her testimony relating to the necessary tightening of examination and investigation on financial groups that the SEC must perform over the coming years.

The SEC’s fiscal year budget for 2014 is $1.35 billion — an allotted amount that Chair White claims is insufficient to perform the regulatory missions the body must act on in order to increasingly ensure that investment and financial organizations are in compliance. She emphasized that technology plays a huge role in what the SEC hopes to accomplish, and that President Obama’s proposed $1.7 billion fiscal year budget for the SEC will greatly assist those aims. 

Her testimony relays that the SEC will be able to hire 639 new staff members and enhance the Commission’s information technology standards to improve upon monitoring “today’s high-tech, high-speed markets,” as Compliance Week reports. Chair White’s official statement published by the SEC on April 1 includes describing how the 2013 budget of $1.321 billion insufficiently enabled the body to regulate financial organizations as the need for compliance has become stronger:

“There is an immediate and pressing need for significant additional resources to permit the SEC to increase its examination coverage of registered investment advisers so as to better protect investors and our markets.  During FY 2013, due to significant resource constraints, the SEC examined only about 9 percent of these advisers, comprising approximately 25 percent of the assets under management.” 

And the SEC certainly has plans to continue tightening its monitoring of investment and financial institutions with increased crackdown on compliance — thereby heightening the role of the compliance officer as a whole in US business. As the SEC looks to gain more staff and monitoring power through its forward-looking budget, compliance will definitely be a more forefront factor for US financial companies.


Further reading:

SEC hearing calls to cut down 10-day stock reporting window

SEC generates fewer enforcement actions, brings in record $3.4B in sanctions

SEC commissioner calls for SEC changes in dealing with activist investors