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May 24 — House lawmakers May 24 proposed cutting the Securities and Exchange Commission's budget to $1.555 billion in fiscal 2017, a $50 million decrease from the $1.605 billion now funding the agency.
The White House had asked for $1.78 billion for the SEC in 2017, with an eye toward doubling the agency's funding by 2021 (27 SLD, 2/10/16).
“Cutting the SEC’s budget and the fund it uses for technology modernization would seriously harm our ability to monitor the markets and protect investors against fraudsters,” an SEC representative told Bloomberg BNA in an e-mail. “This funding is critical to further enhance our capabilities and to continue our robust enforcement, examinations and market oversight programs.”
The SEC had hoped to use a funding increase to bolster its examinations of registered investment advisers. The agency has begun shifting resources away from its broker-dealer exams to focus on IAs (48 SLD, 3/11/16).
The bill would let Congress “tightly hold the reins on the over-spending and overreach within federal bureaucracies,” Rep. Hal Rogers (R-Ky.) said in a news release. Rogers is chairman of the House Appropriations Committee, which released the bill. The committee will hold a May 25 hearing on the measure.
The SEC's funding is part of the financial services appropriations bill unveiled May 24. The bill would also prevent the agency from studying, developing or adopting a political spending disclosure rule, a broader prohibition than enacted for 2016.
The previous measure said the agency can't “finalize, issue, or implement” such a rule, but the new bill adds “study, develop, propose” to the prohibition. Senate Democrats have called for the agency to prepare the rule even though it can't formally adopt it (169 SLD, 9/1/15).
The 2017 bill would also create an Office of the Advocate for Small Business Capital Formation and a Small Business Capital Formation Advisory Committee at the agency. A bill to create both has already passed the House (21 SLD, 2/2/16).
Systemic risk regulators on the Financial Stability Oversight Council would also face additional hurdles to designating large nonbank financial institutions as “systemically important,” under the bill.
The measure would also overhaul how big banks could enter bankruptcy.
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