SEC, CFTC Funding Unchanged in Congressional Spending Plan

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By Andrew Ramonas and Richard Hill

The SEC would get $1.605 billion and the CFTC would receive $250 million for fiscal 2017 under a congressional spending proposal that would maintain their 2016 funding levels.

The agencies have been operating under those same funding levels since the last fiscal year ended Sept. 30 with no new budget enacted for fiscal 2017.

The budget plan would fund the Securities and Exchange Commission and Commodity Futures Trading Commission until Sept. 30. Lawmakers released funding details for federal agencies May 1 as they work to keep the government running past May 5, when short-term spending legislation is set to expire.

President Barack Obama requested $1.8 billion for the SEC and $330 million for the CFTC in his budget plan for fiscal 2017, which began Oct. 1. President Donald Trump has yet to release his budget request for fiscal 2018, but the agencies are bracing for cuts.

“This package of the remaining Appropriations bills is the result of over a year’s worth of careful and dedicated efforts to closely examine federal programs to make the best possible use of every tax dollar,” House Appropriations Chairman Rodney Frelinghuysen (R-N.J.) said in a statement.

An SEC spokesman declined to comment. A representative of the CFTC didn’t immediately respond to a request for comment.

SEC Budget

In addition to funding the SEC, the spending measure would continue to prohibit the agency from undertaking rulemaking that would require companies to disclose their political contributions in filings with the commission. Sen. Elizabeth Warren of Massachusetts and other Democratic lawmakers have pushed the SEC to move forward on the rulemaking, even though Congress in 2015 passed legislation that bars the commission from working on the matter.

The spending measure also would take away $25 million from an SEC reserve fund created under the Dodd-Frank Act. The legislation, however, wouldn’t stop the commission from working on rules concerning universal proxy ballots, conflict minerals and pay ratio disclosure--all regulations disfavored by the administration. The House Republicans’ Financial Choice Act (H.R. 10), which would overhaul Dodd-Frank, would have that power if it becomes law.

Facing possibly leaner times under Trump, the agency has removed dozens of contractors who helped with its investigations in recent months, while the Enforcement Division has operated under a hiring freeze, Bloomberg News reported. Acting SEC Chairman Michael Piwowar said in March the commission was “trying to get the most resources we can” through its budget talks with the White House and Congress.

CFTC Budget

Of the $250 million for the CFTC, which oversees futures and derivatives markets worth more than $300 trillion, $50 million would be targeted for information technology.

Previous CFTC administrations had complained that $250 million wasn’t enough to conduct necessary examinations, run an effective enforcement program and otherwise maintain oversight of financial markets under its purview. Acting Chairman J. Christopher Giancarlo said in March, however, that the agency has to “be realistic” about its funding options and “must run a tighter ship operationally.”

Under a CFTC reauthorization bill passed by the House in January, the CFTC would be authorized at $250 million in each of the five years following its enactment. The author of the legislation, Agriculture Committee Chairman Michael Conaway (R-Texas), said he wanted to put “financial stress” on the CFTC to check its growth and make it leaner.

The bill hasn’t been taken up by the Senate.

To contact the reporters on this story: Andrew Ramonas in Washington at aramonas@bna.com; Richard Hill in Washington at rhill@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com

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