Efforts by Rep. Maxine Waters (D-Calif.) to charge advisors a special user fee to fund an increase in SEC examinations were rejected twice this week, first by the House Appropriations subcommittee with jurisdiction over the SEC’s budget, and subsequently by the full House of Representatives.
On July 14, Waters’ attempt to attach an amendment creating the user fee to an appropriations bill was ruled out of order on the grounds that it would change existing law — an action that is not within the scope of an appropriations bill. A separate amendment offered by Waters that would provide the SEC with the Obama administration’s full funding request was defeated by the full House on July 15 by a 235-184 vote.
The White House and SEC Chair Mary Jo White have sought budget increases as high as 33% to expand the agency’s advisor examination. Currently the SEC examines about 8% of advisors annually, a number that is significantly lower than the percentage of advisors examined by FINRA, an SRO. The SEC budget issue has drawn a veto threat from the White House.
