WASHINGTON: The White House proposed budget boosts for US market regulators , in what would be a boon to agencies months behind in implementing the Dodd-Frank legislation and under pressure to vigorously investigate financial crisis cases and the collapse of MF Global.
The Obama administration's fiscal 2013 budget, released on Monday, proposes giving the Securities and Exchange Commission an 18.5 percent funding increase to $1.566 billion up from 2012's budget of $1.321 billion.
The Commodity Futures Trading Commission would see a 50 percent spending jump to $308 million from $205 million in fiscal 2012. The president also called for legislation to fund the agency through user fees, bringing it in line with most other financial regulators.
The Obama administration, under fire for a dearth of significant prosecutions related to the 2007-2009 financial and housing market meltdown, also on Monday called for adding $55 million to the Justice Department's proposed budget to prosecute financial crimes.
That would bring the proposed budget for such prosecutions to over $700 million, which would fund more FBI agents, prosecutors and forensic accountants. The overall discretionary budget for the Justice Department would go down less than 0.5 percent to $27.1 billion.
The proposal comes shortly after the president announced the creation of a new working group to further investigate misconduct in the pooling and sale of home loans during the financial crisis.
The proposed budget hikes, however, are a long shot.
Republicans who now control the House of Representatives have questioned funding boosts for regulatory agencies as they look to cut government spending and seek to throttle the implementation of the 2010 Dodd-Frank law by starving regulators of additional funds.
Last year, both the SEC and CFTC received far less than what they had requested.
The proposed funding increase comes as the SEC and CFTC face a daunting to-do list.
In addition to facing major work on implementing new rules to oversee the over-the-counter derivatives market, the CFTC is also straining its limited resources to conduct an investigation into the October collapse of brokerage firm MF Global and the massive shortfall in customer money.
The SEC, meanwhile, is working on a series of reforms following the May 6, 2010, "flash crash," and it is also trying to develop proposals to help bolster capital formation for smaller businesses struggling to rebound from tough economic conditions.
Both agencies are seeking to boost their staffing levels and improve their technology amid the new regulatory responsibilities.
CFTC and SEC officials have warned that a lack of funding could hinder their ability to police the markets, implement new reforms and harm staffing levels.
The SEC is also still working to complete roughly 100 rules required under the Dodd-Frank Act. Those new regulations expand its authority to oversee over-the-counter derivatives markets as well as credit-rating agencies and hedge fund and municipal advisers.
In addition to the president's proposed SEC budget, Obama also on Monday called for obligating an additional $50 million into a special reserve fund created in the 2010 Dodd-Frank law that is financed with registration fees.
The money set aside in the reserve fund for 2013 would go toward modernizing the SEC's website and online database for corporate disclosure reports.
It would also be used to help the SEC develop a consolidated audit trail, or a system that would allow the agency to track all orders, messages and trades for the first time.
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