SEC Could Hire More RIA Examiners With Budget Boost: Gensler
The number of registered investment advisors has “grown significantly in the last five years,” Gensler said, growing by 22% — to about 15,000, up from about 12,500 in 2017.
Related: RIA Growth Continues to Outpace SEC Exams Resources
“During the same period, the number of private funds increased by 50% to approximately 50,000,” Gensler testified. “This stretches thin the limited resources of the division.”
The SEC’s FY 2023 funding “for the first time brought the agency’s staffing back above where we were seven years ago,” Gensler testified. “The SEC now is approximately 3% larger than it was in FY 2016. Meanwhile, the demands on our talented staff have grown dramatically.”
Gensler reiterated that in FY 2022, the SEC conducted more than 3,000 exams across its “tens of thousands of registrants, from investment advisers to broker-dealers to exchanges, to ensure they are following their legal obligations to customers, including seniors and other vulnerable investors.”
In conjunction with the Financial Industry Regulatory Authority, “in each of the last five years, we jointly examined nearly half” of registered broker-dealers, Gensler said, “even as the number of daily transactions in the equity markets more than doubled.”
Additional exam resources “would strengthen the Division’s ability to protect American families by addressing risks in the crypto markets, cyber and information security, and the resiliency of critical market infrastructure,” Gensler said.
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