By Sarah N. Lynch
WASHINGTON (Reuters) – Wall Street’s top two U.S. regulators will urge Congress on Tuesday to approve budgets for fiscal 2018 that are at or above their current funding levels.
U.S. Securities and Exchange Commission Chairman Jay Clayton, in his first appearance before a congressional committee since his confirmation hearing in the spring, plans to push for adequate funding for the agency’s enforcement and examination functions, as well as a $240 million investment in information technology, for the fiscal year beginning on Oct. 1.
“The $240 million that the SEC plans to spend on information technology in FY 2018 is quite modest, by way of comparison, to the amounts that the major Wall Street firms spend on their own information technology systems,” Clayton said in prepared testimony before a U.S. Senate appropriations subcommittee.
“In 2016, one large financial institution alone spent more than $9.5 billion on technology firm-wide,” he added.
The SEC is asking Congress to keep its budget flat at about $1.6 billion, the same amount that White House also proposed in May.
By contrast, the Commodity Futures Trading Commission is asking Congress to approve a $281.5 million budget. That is slightly more than the White House’s proposal, which called for keeping the regulator’s budget flat at $250 million.
“The $31.5 million in additional funds is not a formulaic or superficial number, but a thorough and informed assessment of what the CFTC needs to execute its mission,” acting Chairman Chris Giancarlo said in prepared remarks.
Clayton, in his prepared testimony, planned to stress the importance of the reserve fund, a pool of money established by the 2010 Dodd-Frank law that the agency has used to help finance technological improvements that help it detect problems in the marketplace.
The White House proposal called for scrapping the $50 million reserve fund in 2019.
The SEC and White House are also requesting an additional $245 million on top of the $1.6 billion to help pay for upcoming leasing expenses on the agency’s headquarters.
Clayton also will announce plans to conduct a national recruitment effort to hire a small business capital formation advocate, a new position at the SEC required by legislation signed into law during the end of former president Barack Obama’s administration.
(Reporting by Sarah N. Lynch; Editing by Lisa Von Ahn)