In testimony before the U.S. Senate Committee on Appropriations Subcommittee on Financial Services and General Government, SEC Chair Jay Clayton and CFTC Acting Chair J. Christopher Giancarlo defended their agencies' respective budget requests for fiscal year 2018.

The SEC requested a $1.602 billion budget, which Mr. Clayton characterized as "essentially the same as [the SEC's] FY 2017 appropriation." Mr. Clayton detailed the following budgetary goals:

  • Agency management: improving internal operations by evaluating staff management and data utilization.
  • Protecting investors: (i) providing adequate support for the enforcement division in order to prevent misconduct and hold bad actors accountable, and (ii) tightening the focus on examinations in order to evaluate the fitness and ability of market participants.
  • Capital formation: facilitating (i) access to markets for small and emerging companies and (ii) the diversification of both small and large company offerings available to investors.
  • Technology: staying current with technological innovations that affect market behaviors and functions, while also developing improved tools for data analytics.

The CFTC requested a budget increase from $250 million to $281.5 million. Reiterating his statement before the U.S. House of Representatives Committee on Appropriations Subcommittee on Agriculture, Rural Development and Related Agencies (see previous coverage), Mr. Giancarlo explained that the CFTC budget request was developed from a comprehensive review of the resources required to fulfill regulatory goals and responsibilities:

"The $31.5 million in additional funds [being requested by the CFTC] is not a formulaic or superficial number, but a thorough and informed assessment of what the CFTC needs to execute its mission in FY 2018."

Mr. Giancarlo argued that the CFTC needs increased funding partly because of FinTech developments, and identified designated clearing organizations ("DCOs") as another area that will require an additional amount of resources. He stressed that "increases in the number of DCOs, the volumes cleared, and the complexity of the products" require additional resources to be devoted to the oversight of clearing.

Mr. Giancarlo emphasized that the current number of CFTC staff members is insufficient to conduct the level of quantitative analysis that is necessitated by developing markets.

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