Durbin Holds Budget Hearing on SEC and CFTC
Focus on Market Oversight and Gas Prices
[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). SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler were witnesses before Durbin’s Appropriations Financial Services and General Government Subcommittee.
“With our markets on the rebound, record high gas prices and vast new responsibilities after last year’s Wall Street reform bill, SEC and CFTC’s roles in protecting consumers and investors have never be more important,” Durbin said. “In order to protect our recovery, SEC and CFTC need to remain robust, responsive regulators, even as we face concerns over deficits and spending cuts.”
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 trillions of dollars in assets; fund complexes; more than 5,000 broker dealers with over 160,000 branches; 10 credit rating agencies and over $40 trillion worth of trading conducted each year on America’s stock and option exchanges.
The SEC’s budget request for FY12 totals $1.42 billion, a 20% increase over FY11’s $1.18 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 more than $200 million.
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.
With the enactment of the Dodd-Frank Act last July, SEC’s responsibilities grew considerably. Now the SEC is in the driver’s seat for issuing 100 new rules, creating five new offices, producing more than 20 studies and reports, overseeing the over-the-counter derivatives market and hedge fund advisers; registering municipal advisors and security-based swap market participants; enhanced supervising of NRSROs and clearing agencies; regulating asset-backed securities; and creating a new whistleblower program.
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. Adding to the challenge of CFTC’s mission is a significantly transformed, globalized, electronic, round-the-clock, and highly diversified marketplace.
With the enactment of Dodd-Frank financial regulatory reform, the CFTC’s mission was substantially expanded to embrace oversight of the swaps marketplace – the vast “once-in-the-shadows” world of over-the-counter (“OTC”) derivatives.
The CFTC’s budget request for FY12 totals $308 million, a 52% increase over FY11’s $203 million enacted level. Since 2007, Durbin has increased the CFTC’s budget by $207 million, a nearly 200% increase. When Durbin took over as Chairman of the subcommittee he learned CFTC was falling woefully behind in regulating a marketplace that was exploding in volume.
At a time of record high gas prices, CFTC also has a large role in overseeing and investigating speculation in the oil markets. Consumers around the country rely on the CFTC to ensure that they aren’t being taken advantage of at a time of uncertainty in the markets.
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