In an appearance before a House of Representatives panel overseeing federal spending, SEC Chair Gary Gensler defended his agency's request for a 12% budget increase to respond to burgeoning growth in financial markets and the mounting risk of misconduct.

In his public statement, released March 29, SEC Chair Gary Gensler said that “We’ve seen tremendous growth and change in our markets. More people than ever are participating, trading and using tools and technologies that were unavailable even a few years ago. For example, from 2017 to 2022, the number of clients of registered investment advisers grew 60 per, cent from 34 million to 53 million. During that same period, average daily trading in the equity markets more than doubled from more than 30 million transactions to more than 77 million.”

Gensler added that “technology is rapidly transforming our markets and business models. These changes range from electronic trading and the cloud to artificial intelligence and predictive data analytics, just to name a few. There has been dynamic change in communications to and among investors, from Reddit forums to celebrity influencers. Further, we’ve seen the Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class.”

Such growth and rapid change, he said, also means more possibility for wrongdoing. “As the cop on the beat, we must be able to meet the match of bad actors. Thus, it makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets.”

Gensler added that he is proud of this agency. “I am proud of our dedicated staff. It has done remarkable work with limited resources. With funding to meet the scale of our mission, we can be an even stronger advocate for the American public – investors and issuers alike.”

Further, while recent market volatility raises many important issues for policymakers and the American public, it is also a reminder of the SEC’s need to be adequately resourced.

He concluded that “I am pleased to support the President’s FY 2024 request of $2.436 billion for the SEC, to put us on a better track for the future.”

Gensler concluded that “it’s for the investing public and issuers that our staff must continue to drive efficiencies, help protect for financial stability, and modernize our rulesets for today’s $100 trillion capital markets as well as today’s technologies, in a manner consistent with our Congressional authorities.”

For much more, see SEC.gov | Testimony at Hearing before the Subcommittee on Financial Services and General Government.