Durbin Holds Budget Hearing on Financial Market Oversight

SEC and CFTC Budgets Examined

[WASHINGTON, DC] – Assistant Senate Majority Leader Dick Durbin (D-IL) today chaired a hearing which reviewed the funding requests of the nation’s primary financial market regulators – the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Today’s hearing was held in Durbin’s Financial Services and General Government Appropriations Subcommittee. SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler were witnesses.


“After high profile cases of fraud, questionable reporting and unprecedented price volatility, investors need assurances that we are going to have strong and capable ‘cops on the beat’ when it comes to our financial markets,” Durbin said. “I look forward to working with Chairman Schapiro and Chairman Gensler to ensure the SEC and CFTC have the resources necessary to conduct rigorous and transparent oversight of the nation’s financial markets.”


The Securities and Exchange Commission


The SEC’s mission is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. It oversees more than 12,000 publicly traded companies; over 11,000 investment advisers; nearly 8,000 mutual funds with $9 trillion in assets; fund complexes; 5,500 broker dealers with over 174,000 branches; 10 credit rating agencies and nearly $44 trillion worth of trading conducted each year on America’s stock and option exchanges.


The SEC’s budget request for FY10 totals $1.02 billion, an 8.8% increase over FY09’s $943 million. SEC’s budget is offset by registration and transaction fees. Since becoming chairman of the Financial Services General Government subcommittee in 2007, Durbin has increased the SEC’s budget by $133.4 million. The proposed FY 2010 budget includes funding to add 40 full-time employees charged with enforcement and oversight activities.


Each year the SEC brings hundreds of civil enforcement actions for violations of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information.


The Commodity Futures Trading Commission

The CFTC is charged with protecting the public and markets users from manipulation, fraud, and abusive practices. It is also responsible for promoting open, competitive and financially sound markets for commodity futures. It regulates the activities of nearly 70,000 individuals including salesmen, advisors and floor traders. CFTC oversees $5 trillion of trades daily.


The CFTC’s budget request for FY10 total $160.6 million, a 10% increase over FY09’s $146 million. Since 2007, Durbin has increased the CFTC’s budget by $62.6 million.


In the past decade, futures trading volumes have increased more than ten-fold. Over 3.8 billion trades were completed on the U.S. futures exchange in 2008 alone. Despite the surge in activity, staffing levels have dropped 20 percent. This year’s budget request would allow for new staff to be hired and for the modernization of technology and operating infrastructure.


This was the first hearing of the Financial Services and General Government subcommittee this Congress. Senator Susan Collins (R-ME) now serves as the subcommittee’s Ranking Member.