Last week, on April 28, 2010, SEC Chairman Mary Schapiro testified before the Senate’s Subcommittee on Financial Services and General Government in support of the President’s FY 2011 budget request of $1.258 billion for the Securities and Exchange Commission.

During her testimony, Chairman Schapiro discussed the SEC’s progress on various initiatives undertaken during the past year as well as the agency’s continuing work to further improve investor protections.

Chairman Schapiro opened by talking about the SEC’s new leadership, organizational structures and expertise, noting that

Without a doubt, the most critical element to success in improving the Commission’s operations is the agency’s talented and capable staff.

She also spoke about the SEC’s recent efforts to reinvigorate the enforcement program through a variety of initiatives, including the creation of Specialized Units, management restructuring, and the creation of the Office of Market Intelligence.

She went on to discuss the SEC’s efforts at strengthening examinations and oversight and the goal of improving agency systems and management.

Finally, she spoke at some length about the SEC’s recent and significant rule-making agenda, which has been largely focused on increasing investor protections.  Specifically, the SEC has adopted rules that enhance investor protections across a wide variety areas, including:

• Custody controls
• Proxy enhancements
• Discretionary voting by brokers for directors
• Short selling/fails-to-deliver
• Money market funds
• Central clearing of credit default swaps
• Credit rating agencies

In addition, there are a number of rules that the SEC has proposed, the final adoption of which is still pending, including rules that deal with:

• Asset-backed securities
• Proxy access
• Large trader reporting
• Flash orders
• Sponsored access
• Dark pools
• Pay-to-play
• Municipal securities disclosure

The President’s request for $1.258 billion for the SEC in FY 2011 represents a 12 percent increase over the FY 2010 funding level, which increase, according to Ms. Schapiro, would be would be fully offset by the fees the SEC will collect on transactions and registrations during 2011.

Of the total request, $24 million would be contingent upon the enactment of financial reform, such that if reform is passed, the SEC would have the resources needed to begin implementing its enhanced authorities.