On Thursday, July 21, 2011 (the first anniversary of the passage of the Dodd-Frank Act), SEC Chairman Mary Schapiro testified before the U.S. Senate Committee on Banking, Housing and Urban Affairs regarding the Commission's efforts to fulfill its responsibilities under the Act. During her testimony, she advised the Committee that "the new responsibilities assigned to the agency under the Dodd-Frank Act are so significant that they cannot be achieved solely by wringing efficiencies out of the existing budget without also severely hampering our ability to meet our existing responsibilities." Her prepared remarks during the testimony are available here.

In discussing the funding, Chairman Schapiro testified that, to date, the Commission has proceeded with implementing various elements of the Act, "without the necessary additional funding." While these activities have involved performing studies, analysis, and the writing of rules, it has "taken staff time from other responsibilities, and have been done almost entirely with existing staff and without sufficient investments in areas such as information technology."

Chairman Schapiro emphasized that full implementation of the Dodd-Frank Act will require funding for: approximately 770 new staff, including experts in derivatives, hedge funds, data analytics, and credit ratings; and investments in technology to capture and analyze data on new markets. She also emphasized a key fact in the budget debates: any appropriation to the SEC will be offset by transaction fees which the SEC collects and "will have no impact on the nation’s budget deficits."

However, she warned that:

If the SEC does not receive additional resources, many of the issues highlighted by the financial crisis and which the Dodd-Frank Act seeks to fix will not be adequately addressed, as the SEC will not be able to build out the technology and hire industry expertise and other staff desperately needed to oversee and police these new areas of responsibility.

Chairman Schapiro has previously addressed the Commission's budget needs in March 2011 (as discussed here) when seeking budget for Fiscal Year 2012 of $1.4 billion (an increase over the $1.2 billion sought Fiscal Year 2011).