SEC looks to boost staffing in key areas with 100 hires

The Securities and Exchange Commission has submitted a $1.6 billion budget request, a 3.5 percent increase over 2018, in order to restore positions lost since a hiring freeze and to add new positions.

Technology improvements, including cybersecurity, would also see additional personnel and funding, having been labelled a “top priority” for the agency in its Congressional Budget Justification Annual Performance Plan.

Despite the additional staff numbers requested, the SEC said the overall staffing level is declining and expected to drop to 4,528 positions by the end of 2018, compared with 4,628 positions today.

The regulator said the budget would restore approximately one-quarter of the positions lost since the early 2017 hiring freeze.

The most senior hire under the budget request would be a new chief risk officer, replacing Peter Driscoll, who held the role from its creation in March 2016 until October last year before becoming director of the agency’s Office of Compliance Inspections and Examinations. Reporting to chief operating officer Kenneth Johnson, the CRO is responsible for the agency’s internal controls over operations and coordinating the annual management assurance statements.

A total of 17 positions for the Division of Enforcement have been requested to support two new units: The Cyber Unit and the Retail Strategy Task Force. The Cyber Unit will be focused on bringing enforcement actions against cyber-related misconduct and the Retail Strategy Task Force on developing enforcement initiatives to identify misconduct that impacts retail investors including pension funds.

The National Examination Program, which focuses on retail investor protections, would see the largest number of hires, with the regulator looking to restore 24 positions. This would include six additional staff for its Technology Controls Program, which monitors securities market infrastructure for cyber events and outages.

The request would also restore seven staff positions within the Division of Investment Management. The SEC said the division has a particular need to recruit people with expertise in areas including private funds, cybersecurity, fund accounting, and quantitative analytics.

On internal cybersecurity, the funding would provide for four additional information system security officers to expand the SEC’s cybersecurity protections, particularly with regard to incident management and response.

The agency is establishing a new Office of the Advocate for Small Business Capital Formation, for which it will hire a lead and expand its staffing to a total of six.

The hiring requests reflect a shift in the regulator’s approach to protecting retail investors’ interests and a lessening of the focus on internal compliance matters for private funds, a shift that legal experts have previously forecast.

In January Hester Peirce and Robert Jackson were sworn in to the regulator’s bench, bringing it to its five-person capacity for the first time since 2015.