Institute Testifies in Support of SEC FY 2000 Budget

Washington, DC, March 31, 1999 - On March 25, the Senate Appropriations Subcommittee on Commerce, Justice, State, the Judiciary and Related Agencies held a hearing on the Administration's FY 2000 budget request for the Securities and Exchange Commission. SEC Chairman Arthur Levitt presented the SEC's budget; the Institute submitted testimony for the record.

Institute Supports Full SEC Funding
In its statement, the Institute supported an increased level of SEC funding for FY 2000, as requested by the Administration. The budget seeks a $360.8 million appropriation for the SEC, 5.7 percent more than the SEC FY 1999 budget. The Institute's statement noted that adequate financial resources are essential for the SEC to continue its effective regulatory oversight of the securities markets and to carry out important investor protection and awareness initiatives.

In addition, the Institute stated that the funding increase is necessary to support the expanded activities of the Division of Investment Management. For instance, the new SEC disclosure requirements, including the mandatory use of plain English in mutual fund prospectuses, revised and simplified disclosure in mutual fund prospectuses, and fund profiles, have significantly increased the workload of the Division of Investment Management.

Sufficient resources are also needed to finance special projects involving investor protection. Presently, the SEC is working to strengthen the current system of fund governance based on insight gained from the recent Director's Roundtable. The SEC has also been actively monitoring the securities industry's progress with Year 2000 compliance and has intensified its efforts during the past year. The Division of Investment Management has formed an independent task force to deal with Y2K disclosure, and the SEC plans to increase the frequency and quality of Y2K disclosure made by public and investment companies during 1999. Finally, adequate funding is essential for routine inspections of investment advisers and fund companies, and for the SEC's ongoing efforts to educate the nation's investors, such as the nationwide "Facts on Saving and Investing Campaign."

Senator Gregg Suggests SEC Increase Budget Request
At the hearing, discussion between Subcommittee Chairman Judd Gregg (R-NH) and Chairman Levitt focused primarily on whether the SEC had requested enough funding for FY 2000, particularly considering the increased responsibilities of the Commission in the current market. Chairman Gregg specifically noted the need for the SEC to respond to the dramatic growth in electronic commerce. Chairman Levitt stated that the SEC had not asked for all they believe would be necessary to fulfill their duties, at which point Senator Gregg instructed Chairman Levitt to review the Commission's current FY 2000 request and develop a new budget that reflects a realistic assessment of the SEC's expanded needs.