Wall St Regulator Seeks Budget Boost, Cites Market Growth, Misconduct Risk

Wall Street's top regulator on Wednesday asked lawmakers to approve a 12% boost to his agency's budget, citing burgeoning growth in financial markets and the rising risk of wrongdoing.

U.S. Securities and Exchange Commission Chair Gary Gensler made the appeal before a panel of the House Appropriations Committee. It was his first appearance on Capitol Hill since Republican lawmakers, including some of his sharpest critics, took control of the lower chamber of Congress in November.

In the last seven years, average daily trading on stock markets has more than doubled to 77 million transactions while the $25 trillion of gross assets managed by private money managers now exceed the deposit base of the entire commercial banking industry, Gensler said in prepared remarks.

"Such rapid growth and change also means more possibility for wrongdoing," Gensler said. "As the cop on the beat, we must be able to meet the match of bad actors."

He also described cryptocurrency markets as a "wild West" that was "rife with non-compliance," justifying regulators' recent crackdown on the crypto industry.

But Gensler also portrayed the $2.46 billion request for fiscal 2024 as marking a recovery from relative dormancy under the administration of former President Donald Trump. At current levels, his agency's staffing is only 3% larger than it had been before Trump took office, he noted.

However, the budget request may bear little relation to the final outcome, which will be determined by a narrowly divided Congress deadlocked over raising the federal government's borrowing limits.

The SEC routinely tells lawmakers that its budget is "deficit neutral" since its spending is offset by transaction fees assessed from the market.

Republican lawmakers, lobbyists and conservative activists have cast Gensler as an interventionist regulator saddling markets with left-leaning social policies unrelated to making money.

Under Gensler, the commission's budget and staffing have expanded considerably, with hundreds of workers added, most notably to enforcement as well as to key divisions such as Economic Risk and Analysis that support the chairman's ambitious rule-making agenda.