![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
The standoff over separate account margining
CFTC issues sixth extension of no-action relief as long-awaited final rule stalls
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
EU banks lose relief on model test after FRTB delay
Deferment of new trading book regime to January 2025 eats into transition period for “erratic” P&L attribution test
Sunday night football and the Basel III endgame
Big banks, political advocates and housing organisations are unlikely allies in race to dropkick new capital regime
Futures exchanges seek clarity on China licensing regime
Hazy details on landmark Futures and Derivatives Law breeds legal uncertainty, unnerving operators
Some EU banks wanted option to start FRTB on time
Representatives of member states raised possibility with European Commission at July meeting discussing the delay
For US Treasury troubles, treat the cause not the symptom
Regulatory alarm about hidden risk in the Treasury futures market misses the point, fund association execs write
Iosco delays pre-hedging consultation to November
Review into controversial practice splits industry