On May 17, 2022, Chair Gary Gensler testified about the SEC’s budget request before the Subcommittee on Financial Services and General Government U.S. House Appropriations Committee.  His testimony contains several interesting statistics.  While SEC headcount has decreased in the last five years, the number of entities registered and subject to SEC oversight has increased by 12%.  In addition, the volume of data processed by the SEC has grown by 20% annually over the last two years.

His remarks about CorpFin are consistent with this trend:

“The Division of Corporation Finance has shrunk 19 percent since 2016. The FY23 budget request would still leave us 8 percent shy of the number of FTEs we had in FY16.

The Division oversees the disclosures of registered issuers so that investors have the material information they need to make informed investment decisions. Like other Divisions, their responsibilities have grown in recent years.

In FY16, Corporation Finance reviewed filings related to approximately 510 new registrants. That grew almost fourfold last year, to 1,960. Initial public offerings create new disclosures and ongoing streams of work for which SEC staff are responsible. Our role in protecting investors is heightened when a company is being introduced to public investors for the first time.

And yet, during that time, the staff of the Division fell. The Division’s ability to review filings of existing registrants is more limited given transaction volume and complexity of deals.”

As always, your thoughts and comments are welcome!