The demands on SEC staff have grown dramatically in recent years, Mr. Gensler said. From 2017 to 2022, the number of clients of registered investment advisers grew 60% to 53 million from 34 million, while the average daily trading in the equity markets jumped to more than 77 million transactions from more than 30 million, Mr. Gensler said in his written testimony.
With that in mind, the FY 2024 budget request seeks funding for an additional 170 positions to support a total of 5,139 full-time employees.
"Nearly two years into this role, I am grateful to work alongside this remarkable staff and my fellow commissioners to help maintain America's capital markets — I truly think the best in the world, but we want to keep it that way," Mr. Gensler said.
He also noted that the SEC's funding is deficit-neutral as appropriations are offset by transaction fees.
Besides the budget request, lawmakers also had plenty of questions about the SEC's proposed climate disclosure rule.
The much-discussed climate disclosure proposal was issued in March 2022 and is expected to be finalized this year. It has broad backing from institutional investors and asset managers, and would require public companies to disclose a host of climate-related information in their registration statements and periodic reports, including the oversight and governance of climate-related risks by the company's board and management, and how any identified climate-related risks have affected or are likely to affect the company's strategy, business model and outlook, among other requirements.
It also includes provisions on greenhouse gas emission disclosures that have received pushback from congressional Republicans and segments of the business community. Under the proposal, public companies would be required to disclose the greenhouse gas emissions they generate or purchase, and the indirect emissions generated from a company's supply chain, if material, though smaller companies would be exempt from the latter requirement, referred to as Scope 3.
"We've seen you sprint outside of your congressional jurisdiction, specifically when it comes to the climate disclosure rule," said Rep. Ashley Hinson, R-Iowa, during Wednesday's hearing. "I see it as a true weaponization of the department."
As he's done in the past, Mr. Gensler said the SEC will weigh the merits of the debate to bring some consistency to the disclosures.
"What's happening now is there's hundreds if not well over 1,000 companies today in the markets that are putting out disclosures about climate risk," he said. "And there (are) investors relying on those disclosures and all we're doing — with all respect, we are merit-neutral. … We're trying to bring consistency and comparability to those disclosures."
Separately, Rep. Mark Pocan, D-Wis., asked Mr. Gensler whether the agency currently has enough resources to adequately investigate emerging issues in the cryptocurrency market.
Mr. Gensler said the SEC is "stretched thin" and said the crypto market has a "significant amount of non-compliance in it."
He added that the SEC has increased its resources devoted to crypto, but "we could always use more."
