SEC Chairwoman Mary Jo White should “resist the temptation to finalize any regulations” before she leaves in January, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, said Tuesday during a hearing on the Securities and Exchange Commission's fiscal year 2018 budget.
Ms. White, who was appointed by President Barack Obama, announced Monday she will leave when President-elect Donald J. Trump takes over.
The agency's preliminary $2.2 billion budget request for fiscal year 2018 includes placing “a high priority” on increasing exams of investment advisers, the fastest growing registrant population, Ms. White told the committee. Over the last decade, the number of advisers has grown to 12,500 managing more than $70 trillion from 9,000 managing $28 trillion, while the number of SEC examiners decreased to 8 from 17 per $1 trillion. Despite a record number of exams in fiscal 2016, the exam rate is still 11% of all advisers because of industry growth, she said.
Mr. Hensarling said that claims of SEC underfunding “are not supported by the facts since the SEC's budget has increased by a whopping 325% since the year 2000.”
Since becoming chairwoman in April 2013, the SEC “has pursued very consequential rulemaking and other measures designed to protect investors, strengthen the markets and open new avenues for capital raising,” Ms. White said, including adopting final rules for 67 of 86 rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Karen Barr, president and CEO of the Investment Adviser Association, said in a statement that Ms. White “has focused the agency in an unprecedented fashion on the asset management industry, building a comprehensive agenda to enhance regulation and improve the SEC's ability to monitor the industry through data and other measures.”
Ms. White's departure will leave the commission with two members, unless Congress acts on two of Mr. Obama's nominees, Republican Hester Pierce and Democrat Lisa Fairfax. The current Republican commissioner Michael Piwowar is likely to serve as acting chair until Mr. Trump names a replacement. The SEC head also serves as a member of the Financial Stability Oversight Council, which is expected to be scrutinized by the new administration.