Last week, however, the House Appropriations Committee unanimously approved a larger spending bill that included $2.3 billion to fund the SEC, an amount that would allow the agency to continue operating at its current level. That bill is now under consideration in the full Senate.
Mr. Gensler thanked the committee for last week's unanimous vote but still made the case for additional funding. He noted that from 2017 to 2022, the number of clients of registered investment advisers grew nearly 70% to 57 million from 34 million. During that same period, average daily trading in the equity markets more than doubled to more than 77 million from more than 30 million transactions.
It makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets, Mr. Gensler said.
The SEC chairman was also asked about the agency's pace of rule-making and specifically about its proposed public company climate disclosure rule.
Like he has in the past, Mr. Gensler defended the rule-making pace, which has been criticized by industry stakeholders and lawmakers. He said the SEC during his tenure has finalized 19 rules and has about 55 total rule-making initiatives on its agenda. He noted that his predecessor at the SEC, Jay Clayton, finalized 64 rules over a four-year period.
Sen. Joe Manchin, D-W.Va., asked Mr. Gensler about the Scope 3 emissions requirements in the SEC's climate disclosure proposal, which was unveiled in March 2022 and would require public companies to disclose a host of climate-related information in their registration statements and periodic reports.
Notably, the proposal would require that public companies 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.
Mr. Manchin and others have said the requirement could hurt small businesses struggling to stay afloat.
Mr. Gensler said the proposal, which might be finalized this year, is aimed at bringing consistency and comparability to the market since a majority of the top public companies already disclose at least some climate-related information voluntarily.
As for Scope 3, Mr. Gensler said the SEC has heard the feedback to the tune of more than 15,000 public comments. "I assure you that (the) rule that we're trying to finalize (is) to bring comparability and consistency about the public companies," he said. "And a lot of comments came in about alternatives to ensure that … the reach of the rule doesn't go to non-public companies."