SEC Chair Jay Clayton thanked Congress for additional funding to improve information technology infrastructure and cybersecurity in FY2018. In testimony before the U.S. House Committee on Appropriations Subcommittee on Financial Services and General Government, Mr. Clayton described the priorities of the President's FY2019 budget request for $1.658 billion to fund SEC operations.

Mr. Clayton underlined SEC efforts to improve operations with respect to: technology and cybersecurity, risk management, capital formation, protections for "Main Street" and vulnerable investors, enforcement against manipulation and fraud within the regulated markets, regulatory oversight, and leasing efforts. He discussed the need to lift the "hiring freeze," which has been in effect since late FY2016. The budget request would reinstate 100 positions in areas that include retail investor protections and equity and fixed income markets oversight. In addition, Mr. Clayton appealed to the Committee to support the recent SEC proposed "Retail Best Interest" standard for broker-dealers (as previously covered).

Specifically, Mr. Clayton described several high budget priorities, including:

  • continuing to help companies seeking to raise capital through IPOs, follow-on or exempt offerings, and other capital formation initiatives;
  • improving the SEC's Investment Management monitoring and disclosure programs;
  • protecting retail investors through "rule-writing" initiatives, such as implementing "standards of conduct for investment professionals";
  • maintaining the new Fixed Income Market Structure Advisory Committee to help improve the "efficiency, transparency and effectiveness of fixed income markets";
  • engaging in the "General Services Administration's competitive procurement process for a successor lease for the SEC's New York Regional Office"; and
  • providing additional staff or restore crucial positions to support the areas and goals listed above.

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