Congress is preparing to cut the budgets of the SEC and the CFTC at a time when their roles as financial regulators are expanding.
Just this week, the Senate Appropriations Committee approved a 5% cut in the budgets for the remainder of the year. The House passed the same cuts last week and full Senate approval is expected in days.*
What is being billed as a 5 percent cut compared to the last fiscal year is actually double that since it applies the full annual cut to spending for the remainder of the year.
Ramifications could be far reaching. The lower budgets could become the starting point for negotiations over next year’s budgets for the regulators.
Granted, proposed budget cuts are “across the board” for government agencies, but very few agencies are facing as large an increase in mandated responsibilities as these two financial regulators, i.e. 2014 will mark the first full year of CFTC regulation of the derivatives industry, which is seven times larger than commodities, the agency’s traditional domain
For the SEC, fiscal 2014 will be the first full year of oversight over hedge fund and private fund companies. Additionally, JOBS Act rules could be finished and enforcement begun during that budget cycle.
*FA-mag.com, March 13, 2013