Schapiro wants a self-funding SEC
The SEC could become a self-funded body to escape Congressional constraints
WASHINGTON, DC - US Securities and Exchange Commission (SEC) chairman Mary Schapiro has commented she believes the regulator should evolve into an industry-funded body, departing from its government-funded roots.
Such a move, which Schapiro recommended in an interview to UK newspaper the Financial Times, would shift the federal regulator more along the lines of Schapiro's former charge before she took over at the SEC - independent investment industry body the Financial Industry Regulatory Authority.
Schapiro said moving to a direct model for industry support would allow the SEC to tackle more complex investigations, and invest more in technology and talent to provide better results.
The SEC already takes more than $1 billion a year directly from regulated organisations and investors through registration and transaction fees, but unlike the other federal regulatory bodies is constrained by requiring congressional approval for spending this money through its annual budget.
Schapiro's logic is that the constraints of that system make it tough for the SEC to invest in technological projects, long-term staff investment or multi-year investigations because its strategy is wedded to a short-sighted annual basis.
"Self-funding has been discussed over the years but I think it might now well be the moment," said Schapiro. "Some stability in funding would be an enormous benefit because it would help with long-term planning in such areas as technology and staffing."
A move to self-funding would appeal to many, as the US myriad of regulators compete for their budgets as well as responsibilities under the reform proposals of the Obama administration.
Many financial regulators already operate on such a model. The UK Financial Services Authority (FSA), for example, has been independently funded since its 2000 inception - although it has also been accused of regulatory failure and been compelled to intensify its supervision and enforcement in recent months.
"Self-funding will help us to avoid periods of drought," said Schapiro. "Think about what the markets were doing in terms of growth and innovation at the same time the SEC was in a hiring freeze."
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
One year on, regulators still want a cure for bank runs
Broad support for higher outflow assumptions on uninsured deposits, but that won’t save insolvent banks
Watchlist and adverse media monitoring solutions 2024: market update and vendor landscape
This Chartis report updates Watchlist monitoring solutions 2022 and focuses on solutions for sanctions (name and transaction) screening and monitoring adverse media and its related elements
Basel Committee reviewing design of liquidity ratios
Focus on LCR and NSFR after Silicon Valley Bank and Credit Suisse, but assumptions may not change
Risk, portfolio margin, regulation: regtech to the rescue
A white paper outlining the complexity of setting the course for risk, margin and regulation
Prop shops recoil from EU’s ‘ill-fitting’ capital regime
Large proprietary trading firms complain they are subject to hand-me-down rules originally designed for banks
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Most read
- Basel Committee reviewing design of liquidity ratios
- Too soon to say good riddance to banks’ public enemy number one
- SG trader dismissals shine spotlight on intraday limit controls