SEC Chairman Says Agency Needs a Bigger Budget

Securities and Exchange Commission Chairman Arthur Levitt Jr. urged lawmakers Thursday to beef up the agency’s budget so it can better police a wide range of burgeoning financial markets.

In testimony before a Senate appropriations subcommittee, Levitt requested $309.6 million for fiscal 1995, an increase of $37 million over the current budget.

The SEC chairman also asked for an additional 271 full-time employees.

“The resources requested in the budget are absolutely critical for the agency,” he said. “Without the increases, the agency cannot meet its mandate of protecting investors and enforcing the nation’s securities laws.”

He emphasized the need for more resources to monitor the booming mutual fund industry.

“Unfortunately, as investors are entrusting more and more of their savings . . . to mutual funds, the SEC’s resources to regulate and inspect those funds have lagged far behind,” Levitt said.

He noted that the agency generates far more in fees collected from the industry each year than it receives to fund its operations.

The SEC draws fees for stock exchange transactions and from parties filing registration statements and other documents. But the bulk of that money winds up at the U.S. Treasury to pay for other government programs.

The SEC has been pushing for legislation that would allow it to fund itself rather than relying on Congress to appropriate funds each year.

“The SEC is a profit center for the federal government,” Levitt said, adding that “the commission strongly supports the creation of a self-funding mechanism.”